Federal Register / Vol. 76, No. 53 / Friday, March 18, 2011 / Notices 15009 

1 17 CFR 240.15c3–3(o)(3)(i). 

2 In fact, the staff believes that most firms will 

have this process automated. To the extent that no 

person need be involved in the generation of this 

record, the burden will be very minimal. 

3 17 CFR 240.15c3–3(o)(2). 

4 17 CFR 240.15c3–3(o)(3)(ii). 

5Based on past conversations with industry 

representatives regarding other rule changes as 

adjusted to account for inflation and increased 

postage costs. 

and retain a written notification from 

each bank in which it has a Special 

Reserve Bank Account to evidence 

bank’s acknowledgement that assets 

deposited in the Account are being held 

by the bank for the exclusive benefit of 

the broker-dealer’s customers. As stated 

previously, 279 broker-dealers are 

presently fully-subject to Rule 15c3–3. 

In addition, 120 broker-dealers operate 

in accordance with the exemption 

provided in paragraph (k)(2)(i) which 

also requires that a broker-dealer 

maintain a Special Reserve Bank 

Account. The staff estimates that of the 

total broker-dealers that must comply 

with this rule, only 25%, or 100 ((279 

+ 120) × .25) must obtain 1 new letter 

each year (either because the brokerdealer changed the type of business it 

does and became subject to either 

paragraph (e)(3) or (k)(2)(i) or simply 

because the broker-dealer established a 

new Special Reserve Bank Account). 

The staff estimates that it would take a 

broker-dealer approximately 1 hour to 

obtain this written notification from a 

bank regarding a Special Reserve Bank 

Account because the language in these 

letters is largely standardized. 

Therefore, Commission staff estimates 

that broker-dealers will spend 

approximately 100 hours each year to 

obtain these written notifications. 

In addition, a broker-dealer must 

immediately notify the Commission and 

its designated examining authority if it 

fails to make a required deposit to its 

Special Reserve Bank Account. 

Commission staff estimates that brokerdealers file approximately 33 such 

notices per year. Broker-dealers would 

require approximately 30 minutes, on 

average, to file such a notice. Therefore, 

Commission staff estimates that brokerdealers would spend a total of 

approximately 17 hours each year to 

comply with the notice requirement of 

Rule 15c3–3. 

Finally, a broker-dealer that effects 

transactions in SFPs for customers also 

will have paperwork burdens associated 

with the requirement in paragraph (o) of 

Rule 15c3–3 to make a record of each 

change in account type.1 More 

specifically, a broker-dealer that 

changes the type of account in which a 

customer’s SFPs are held must create a 

record of each change in account type 

that includes the name of the customer, 

the account number, the date the brokerdealer received the customer’s request 

to change the account type, and the date 

the change in account type took place. 

As of December 31, 2009, broker-dealers 

that were also registered as futures 

commission merchants reported that 

they maintained 35,242,468 customer 

accounts. The staff estimates that 8% of 

these customers may engage in SFP 

transactions (35,242,468 accounts × 8% 

= 2,819,397). Further, the staff estimates 

that 20% per year may change account 

type. Thus, broker-dealers may be 

required to create this record for up to 

563,879 accounts (2,819,397 accounts × 

20%). The staff believes that it will take 

approximately 3 minutes to create each 

record.2 Thus, the total annual burden 

associated with creating a record of 

change of account type will be 28,194 

hours (563,879 accounts × (3min/ 

60min)). 

Consequently, the staff estimates that 

the total annual burden hours associated 

with Rule 15c3–3 would be 

approximately 65,091 hours (36,780 

hours + 100 hours + 17 hours + 28,194 

hours). 

In addition, a broker-dealer that 

effects transactions in SFPs for 

customers also will have an annualized 

cost burden associated with the 

requirements in paragraph (o) of Rule 

15c3–3 to (1) provide each customer 

that plans to effect SFP transactions 

with a disclosure document containing 

certain information,3 and (2) send each 

SFP customer notification of any change 

of account type.4 Approximately 8% of 

the accounts held by broker-dealers that 

are also registered as FCMs, or 2,819,397 

accounts, may engage in SFP 

transactions. The staff estimates that the 

cost of printing and sending each 

disclosure document will be 

approximately $.15 per document sent.5

Thus, the staff estimates that the cost of 

printing and sending disclosure 

documents would be approximately 

$422,910 (2,819,397 accounts × $.15). In 

addition, approximately 563,879 

accounts (2,819,397 accounts × 20%) 

may change account type per year 

requiring that broker-dealers provide 

notification to those customers. The 

staff estimates that the cost of sending 

this notification to customers will be 

about $84,582 (563,879 accounts × $.15). 

Consequently, the staff estimates that 

the total annual cost associated with 

Rule 15c3–3 would be $507,492 

($422,910 + $84,583). 

Records required to be created and 

notices required to be filed with the 

Commission pursuant to Rule 15c3–3 

must be maintained in accordance with 

Rule 17a–4 (17 CFR 240.17a–4). The 

collection of information is mandatory 

and the information required to be 

provided to the Commission pursuant to 

these Rules are deemed confidential, 

notwithstanding any other provision of 

law under Section 24(b) of the 

Securities Exchange Act of 1934 (15 

U.S.C. 78x(b)) and Section 552(b)(3)(B) 

of the Freedom of Information Act (5 

U.S.C. 552(b)(3)(B)). 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid 

control number. 

The public may view the background 

documentation for this information 

collection at the following Web site, 

http://www.reginfo.gov. Comments 

should be directed to: (i) Desk Officer 

for the Securities and Exchange 

Commission, Office of Information and 

Regulatory Affairs, Office of 

Management and Budget, Room 10102, 

New Executive Office Building, 

Washington, DC 20503, or by sending an 

e-mail to: 

Shagufta_Ahmed@omb.eop.gov; and (ii) 

Thomas Bayer, Chief Information 

Officer, Securities and Exchange 

Commission, c/o Remi Pavlik-Simon, 

6432 General Green Way, Alexandria, 

VA 22312 or send an e-mail to: 

PRA_Mailbox@sec.gov. Comments must 

be submitted to OMB within 30 days of 

this notice. 

Dated: March 14, 2011. 

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–6316 Filed 3–17–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investor 

Education and Advocacy, 

Washington, DC 20549. 

Extension: 

Rule 17a–4; SEC File No. 270–198; 

OMB Control No. 3235–0279. 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collection of information 

discussed below. 


Emcdonald on DSK2BSOYB1PROD with NOTICES
15010 Federal Register / Vol. 76, No. 53 / Friday, March 18, 2011 / Notices 

1This figure is based on SIFMA’s Office Salaries 

in the Securities Industry 2010, modified by 

Commission staff to account for an 1,800-hour 

work-year multiplied by 2.93 to account for 

bonuses, firm size, employee benefits, and 

overhead. 

Rule 17a–4 requires approximately 

5,057 active, registered exchange 

members, brokers and dealers (‘‘brokerdealers’’) to preserve for prescribed 

periods of time certain records required 

to be made by Rule 17a–3 and other 

Commission rules, and other kinds of 

records which firms make or receive in 

the ordinary course of business. Rule 

17a–4 also permits broker-dealers to 

employ, under certain conditions, 

electronic storage media to maintain 

these required records. The records 

required to be maintained under Rule 

17a–4 are used by examiners and other 

representatives of the Commission to 

determine whether broker-dealers are in 

compliance with, and to enforce their 

compliance with, the Commission’s 

rules. 

The staff estimates that the average 

number of hours necessary for each 

broker-dealer to comply with Rule 17a– 

4 is 254 hours annually. Thus, the total 

burden for broker-dealers is 1,284,478 

hours annually. The staff believes that 

compliance personnel would be charged 

with ensuring compliance with 

Commission regulation, including Rule 

17a–4. The staff estimates that the 

hourly salary of a Compliance Clerk is 

$67 per hour.1 Based upon these 

numbers, the total cost of compliance 

for 5,057 respondents is the dollar cost 

of approximately $86.1 million 

(1,284,478 yearly hours × $67). The total 

burden hour decrease of 468,122 results 

from the decrease in the number of 

respondents from 6,900 to 5,057. 

Based on conversations with members 

of the securities industry and based on 

the Commission’s experience in the 

area, the staff estimates that the average 

broker-dealer spends approximately 

$5,000 each year to store documents 

required to be retained under Rule 17a– 

4. Costs include the cost of physical 

space, computer hardware and software, 

etc., which vary widely depending on 

the size of the broker-dealer and the 

type of storage media employed. The 

Commission estimates that the annual 

reporting and record-keeping cost 

burden is $25,285,000. This cost is 

calculated by the number of active, 

registered broker-dealers multiplied by 

the reporting and record-keeping cost 

for each respondent (5,057 active, 

registered broker-dealers × $5,000). 

The public may view the background 

documentation for this information 

collection at the following Web site, 

http://www.reginfo.gov. Comments 

should be directed to (i) Desk Officer for 

the Securities and Exchange 

Commission, Office of Information and 

Regulatory Affairs, Office of 

Management and Budget, Room 10102, 

New Executive Office Building, 

Washington, DC 20503, or by sending an 

e-mail to: 

Shagufta_Ahmed@omb.eop.gov; and (ii) 

Thomas Bayer, Chief Information 

Officer, Securities and Exchange 

Commission, c/o Remi Pavlik-Simon, 

6432 General Green Way, Alexandria, 

VA 22312 or send an e-mail to: 

PRA_Mailbox@sec.gov. Comments must 

be submitted to OMB within 30 days of 

this notice. 

Dated: March 14, 2011. 

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–6317 Filed 3–17–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investor 

Education and Advocacy, 

Washington, DC 20549–0213. 

Extension: 

Rule 206(4)–6; SEC File No. 270–513; 

OMB Control No. 3235–0571. 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.) the Securities 

and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget 

(‘‘OMB’’) a request for extension of the 

previously approved collection of 

information discussed below. 

The title for the collection of 

information is ‘‘Rule 206(4)–6’’ under 

the Investment Advisers Act of 1940 (15 

U.S.C. 80b–1 et seq.) (‘‘Advisers Act’’) 

and the collection has been approved 

under OMB Control No. 3235–0571. The 

Commission adopted rule 206(4)–6 (17 

CFR 275.206(4)–6), the proxy voting 

rule, to address an investment adviser’s 

fiduciary obligation to clients who have 

given the adviser authority to vote their 

securities. Under the rule, an 

investment adviser that exercises voting 

authority over client securities is 

required to: (i) Adopt and implement 

policies and procedures that are 

reasonably designed to ensure that the 

adviser votes securities in the best 

interest of clients, including procedures 

to address any material conflict that 

may arise between the interest of the 

adviser and the client; (ii) disclose to 

clients how they may obtain 

information on how the adviser has 

voted with respect to their securities; 

and (iii) describe to clients the adviser’s 

proxy voting policies and procedures 

and, on request, furnish a copy of the 

policies and procedures to the 

requesting client. The rule is designed 

to assure that advisers that vote proxies 

for their clients vote those proxies in 

their clients’ best interest and provide 

clients with information about how 

their proxies were voted. 

Rule 206(4)–6 contains ‘‘collection of 

information’’ requirements within the 

meaning of the Paperwork Reduction 

Act. An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid 

control number. The collection is 

mandatory and responses to the 

disclosure requirement are not kept 

confidential. 

The respondents are investment 

advisers registered with the Commission 

that vote proxies with respect to clients’ 

securities. Advisory clients of these 

investment advisers use the information 

required by the rule to assess 

investment advisers’ proxy voting 

policies and procedures and to monitor 

the advisers’ performance of their proxy 

voting activities. The information 

required by Rule 206(4)–6 also is used 

by the Commission staff in its 

examination and oversight program. 

Without the information collected under 

the rule, advisory clients would not 

have information they need to assess the 

adviser’s services and monitor the 

adviser’s handling of their accounts, and 

the Commission would be less efficient 

and effective in its programs. 

The estimated number of investment 

advisers subject to the collection of 

information requirements under the rule 

is 10,207. It is estimated that each of 

these advisers is required to spend on 

average 10 hours annually documenting 

its proxy voting procedures under the 

requirements of the rule, for a total 

burden of 102,070 hours. We further 

estimate that on average, approximately 

121 clients of each adviser would 

request copies of the underlying policies 

and procedures. We estimate that it 

would take these advisers 0.1 hours per 

client to deliver copies of the policies 

and procedures, for a total burden of 

123,505 hours. Accordingly, we 

estimate that rule 206(4)–6 results in an 

annual aggregate burden of collection 

for SEC-registered investment advisers 

of a total of 225,575 hours. 

Records related to an adviser’s proxy 

voting policies and procedures and 

proxy voting history are separately 


Emcdonald on DSK2BSOYB1PROD with NOTICES