15008 Federal Register / Vol. 76, No. 53 / Friday, March 18, 2011 / Notices 

1As of February 4, 2011, three SBICs were 

registered with the Commission. 

2This estimate of hours is based on past 

conversations with representatives of SBICs and 

accountants that have filed the form. 

3Commission staff estimates that the annual 

burden would be incurred by a senior accountant 

with an average hourly wage rate of $198 per hour. 

See Securities Industry and Financial Markets 

Association, Report on Management and 

Professional Earnings in the Securities Industry 

2010, modified to account for an 1,800-hour work 

year and multiplied by 5.35 to account for bonuses, 

firm size, employee benefits and overhead. 

Commission. Paragraph (d)(3) of the rule 

provides an exemption from this 

requirement for any loan or advance of 

credit to, or acquisition of securities or 

other property of, a small business 

concern, or any agreement to do any of 

the foregoing (‘‘investments’’) made by a 

small business investment company 

(‘‘SBIC’’) and an affiliated bank, 

provided that reports about the 

investments are made on forms the 

Commission may prescribe. Rule 17d–2 

(17 CFR 270.17d–2) designates Form N– 

17D–1 (17 CFR 274.00) (‘‘form’’) as the 

form for reports required by rule 17d– 

1. 

SBICs and their affiliated banks use 

form N–17D–1 to report any 

contemporaneous investments in a 

small business concern. The form 

provides shareholders and persons 

seeking to make an informed decision 

about investing in an SBIC an 

opportunity to learn about transactions 

of the SBIC that have the potential for 

self dealing and other forms of 

overreaching by affiliated persons at the 

expense of shareholders. 

Form N–17D–1 requires SBICs and 

their affiliated banks to report 

identifying information about the small 

business concern and the affiliated 

bank. The report must include, among 

other things, the SBIC’s and affiliated 

bank’s outstanding investments in the 

small business concern, the use of the 

proceeds of the investments made 

during the reporting period, any 

changes in the nature and amount of the 

affiliated bank’s investment, the name of 

any affiliated person of the SBIC or the 

affiliated bank (or any affiliated person 

of the affiliated person of the SBIC or 

the affiliated bank) who has any interest 

in the transactions, the basis of the 

affiliation, the nature of the interest, and 

the consideration the affiliated person 

has received or will receive. 

Up to three SBICs may file the form 

in any year.1 The Commission estimates 

the burden of filling out the form is 

approximately one hour per response 

and would likely be completed by an 

accountant or other professional. Based 

on past filings, the Commission 

estimates that no more than one SBIC is 

likely to use the form each year. Most 

of the information requested on the form 

should be readily available to the SBIC 

or the affiliated bank in records kept in 

the ordinary course of business, or with 

respect to the SBIC, pursuant to the 

recordkeeping requirements under the 

Act. Commission staff estimates that it 

should take approximately one hour for 

an accountant or other professional to 

complete the form.2 The estimated total 

annual burden of filling out the form is 

1 hour, at an estimated total annual cost 

of $198.3 The Commission will not keep 

responses on Form N–17D–1 

confidential. 

The estimate of average burden hours 

is made solely for the purposes of the 

Paperwork Reduction Act, and is not 

derived from a comprehensive or even 

a representative survey or study of the 

costs of Commission rules. 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 OMB control 

number. 

Written comments are invited on: (a) 

Whether the collection of information is 

necessary for the proper performance of 

the functions of the Commission, 

including whether the information has 

practical utility; (b) the accuracy of the 

Commission’s estimate of the burden of 

the collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information collected; and (d) 

ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days of this 

publication. 

Please direct your written comments 

to 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. 

Dated: March 15, 2011. 

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–6362 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 15c3–3; SEC File No. 270–087; 

OMB Control No. 3235–0078. 

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 approval of extension of the 

previously approved collection of 

information provided for in Rule 15c3– 

3 (17 CFR 240.15c3–3), under the 

Securities Exchange Act of 1934 (15 

U.S.C. 78a et seq.). 

Rule 15c3–3 requires that a brokerdealer that hold customer securities 

obtain and maintain possession and 

control of fully-paid and excess margin 

securities they hold for customers. In 

addition, the Rule requires that a brokerdealer that holds customer funds make 

either a weekly or monthly computation 

to determine whether certain customer 

funds need to be segregated in a special 

reserve bank account for the exclusive 

benefit of the firm’s customers. It also 

requires that a broker-dealer maintain a 

written notification from each bank 

where a Special Reserve Bank Account 

is held acknowledging that all assets in 

the account are for the exclusive benefit 

of the broker-dealer’s customers, and to 

provide written notification to the 

Commission (and its designated 

examining authority) under certain, 

specified circumstances. Finally, 

paragraph (o) of Rule 15c3–3, which 

only applies to broker-dealers that sell 

securities futures products (‘‘SFP’’) to 

customers, requires that such brokerdealers provide certain notifications to 

customers, and to make a record of any 

changes of account type. 

There are approximately 279 brokerdealers fully subject to the Rule (i.e., 

broker-dealers that cannot claim any of 

the exemptions enumerated at 

paragraph (k)), of which approximately 

13 make daily, 210 make weekly, and 56 

make monthly, reserve computations. 

On average, each of these respondents 

require approximately 2.5 hours to 

complete a computation. Accordingly, 

Commission staff estimates that the 

resulting burden totals 36,780 hours 

annually ((2.5 hours × 240 computations 

× 13 respondents that calculate daily) + 

(2.5 hours × 52 computations × 210 

respondents that calculate weekly) + 

(2.5 hours × 12 computations × 56 

respondents that calculate monthly)). 

A broker-dealer required to maintain 

the Special Reserve Bank Account 

prescribed by Rule 15c3–3 must obtain 


Emcdonald on DSK2BSOYB1PROD with NOTICES
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