1004 Federal Register / Vol. 75, No. 4 / Thursday, January 7, 2010 / Notices 

2Public Law 106–102, 113 Stat. 1338 (1999). 

3See 15 U.S.C. 78q(i). 

4See Exchange Act Release No. 49831 (Jun. 8, 

2004), 69 FR 34472 (Jun. 21, 2004). 

5See H.R. Conf. Rep. No. 106–434, 165 (1999). 

See also Exchange Act Release No. 49831, at 6 (Jun. 

8, 2004), 69 FR 34472, at 34473 (Jun. 21, 2004). 

6 17 CFR 240.15c3–4. 

7 (3,600 hours × 3 SIBHCs) = 10,800 hours. 8 (250 hours per year × 3 SIBHCs) = 750 hours per 

year. 9 (3,600 hours × 3 SIBHCs) + (250 hours per year 

× 3 SIBHCs). 

10 (250 hours per year × 3 SIBHCs). 11 17 CFR 240.17i–5(b)(5). 

12 5 U.S.C. 552(b)(3)(B). 

1 44 U.S.C. 3501 et seq. 

2Public Law 106–102, 113 Stat. 1338 (1999). 

previously approved collection of 

information discussed below. The Code 

of Federal Regulation citation to this 

collection of information is the 

following rule: 17 CFR 240.17i–4. 

Section 231 of the Gramm-LeachBliley Act of 1999 2 (the ‘‘GLBA’’) 

amended Section 17 of the Securities 

Exchange Act of 1934 (17 USC 78a et 

seq.) (‘‘Exchange Act’’) to create a 

regulatory framework under which a 

holding company of a broker-dealer 

(‘‘investment bank holding company’’ or 

‘‘IBHC’’) may voluntarily be supervised 

by the Commission as a supervised 

investment bank holding company (or 

‘‘SIBHC’’).3 In 2004, the Commission 

promulgated rules, including Rule 17i– 

4, to create a framework for the 

Commission to supervise SIBHCs.4 This 

framework includes qualification 

criteria for SIBHCs, as well as 

recordkeeping and reporting 

requirements. Among other things, this 

regulatory framework for SIBHCs is 

intended to provide a basis for non-U.S. 

financial regulators to treat the 

Commission as the principal U.S. 

consolidated home-country supervisor 

for SIBHCs and their affiliated brokerdealers.5

Rule 17i–4 requires an SIBHC to 

comply with present Exchange Act Rule 

15c3–4 6 as though it were a brokerdealer, which requires that the firm 

establish, document and maintain a 

system of internal risk management 

controls to assist it in managing the 

risks associated with its business 

activities (including market, credit, 

operational, funding, and legal risks). In 

addition, Rule 17i–4 requires that an 

SIBHC establish, document, and 

maintain procedures for the detection 

and prevention of money laundering 

and terrorist financing as part of its 

internal risk management control 

system. Finally, Rule 17i–4 requires that 

an SIBHC periodically review its 

internal risk management control 

system for integrity of the risk 

measurement, monitoring, and 

management process, and 

accountability, at the appropriate 

organizational level, for defining the 

permitted scope of activity and level of 

risk. 

The collection of information required 

pursuant to Rule 17i–4 is needed so that 

the Commission can adequately 

supervise the activities of these SIBHCs, 

and to allow the Commission to 

effectively determine whether 

supervision of an IBHC as an SIBHC is 

necessary or appropriate in furtherance 

of the purposes of Section 17 of the 

Exchange Act. Without this information, 

the Commission would be unable to 

adequately supervise the SIBHC as 

provided for under the Exchange Act. 

We estimate that three IBHCs will file 

Notices of Intention with the 

Commission to be supervised by the 

Commission as SIBHCs. An SIBHC will 

require, on average, about 3,600 hours to 

assess its present structure, businesses, 

and controls, and establish and 

document its risk management control 

system. In addition, an SIBHC will 

require, on average, approximately 250 

hours each year to maintain its risk 

management control system. 

Consequently, the total initial burden 

for all SIBHCs is approximately 10,800 

hours 7 and the continuing annual 

burden is about 750 hours.8 Thus, the 

total burden relating to Rule 17i–4 for 

all SIBHCs is approximately 11,550 

hours 9 in the first year, and 

approximately 750 hours each year 

thereafter.10

We believe that an IBHC likely will 

upgrade its information technology 

(‘‘IT’’) systems in order to more 

efficiently comply with certain of the 

SIBHC framework rules (including 

Rules 17i–4, 17i–5, 17i–6 and 17i–7), 

and that this would be a one-time cost. 

Depending on the state of development 

of the IBHC’s IT systems, it would cost 

an IBHC between $1 million and $10 

million to upgrade its IT systems to 

comply with the SIBHC framework of 

rules. Thus, on average, it would cost 

each of the three IBHCs about $5.5 

million to upgrade their IT systems, or 

approximately $16.5 million in total. It 

is impossible to determine what 

percentage of the IT systems costs 

would be attributable to each Rule, so 

we allocated the total estimated upgrade 

costs equally (at 25% for each of the 

above-mentioned Rules), with 

$4,125,000 attributable to Rule 17i–4. 

The records required to be created 

pursuant to Rule 17i–4 must be 

preserved for a period of not less than 

three years.11 The collection of 

information is mandatory and the 

information required to be provided to 

the Commission pursuant to this Rule is 

deemed confidential pursuant to 

Section 17(j) of the Exchange Act and 

Section 552(b)(3)(B) of the Freedom of 

Information Act,12 notwithstanding any 

other provision of law. 

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. 

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@comb.eop.gov; and 

(ii) Charles Boucher, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Shirley 

Martinson, 6432 General Green Way, 

Alexandria, Virginia 22312 or send an email to PRA_Mailbox@sec.gov. 

Comments must be submitted to OMB 

within 30 days of this notice. 

Dated: December 30, 2009. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–4 Filed 1–6–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: US Securities and Exchange 

Commission, Office of Investor 

Education and Advocacy, 

Washington, DC 20549–0213. 

E×tension: Rule 17i–6, SEC File No. 270–532, 

OMB Control No. 3235–0588. 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 

1995 1 the Securities and Exchange 

Commission (‘‘Commission’’) has 

submitted to the Office of Management 

and Budget request for extension of the 

previously approved collection of 

information discussed below. The Code 

of Federal Regulation citation to this 

collection of information is the 

following rule: 17 CFR 240.17i–6. 

Section 231 of the Gramm-LeachBliley Act of 1999 2 (the ‘‘GLBA’’) 

amended Section 17 of the Securities 

Exchange Act of 1934 (17 USC 78a et 

seq.) (the ‘‘Exchange Act’’) to create a 

regulatory framework under which a 

holding company of a broker-dealer 

(‘‘investment bank holding company’’ or 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES

Federal Register / Vol. 75, No. 4 / Thursday, January 7, 2010 / Notices 1005 

3See 15 U.S.C. 78q(i). 

4See Exchange Act Release No. 49831 (Jun. 8, 

2004), 69 FR 34472 (Jun. 21, 2004). 

5See H.R. Conf. Rep. No. 106–434, 165 (1999). 

See also Exchange Act Release No. 49831, at 6 (Jun. 

8, 2004), 69 FR 34472, at 34473 (Jun. 21, 2004). 

6 15 U.S.C. 78q(i)(3)(A). 

7The SIBHC must file with the Commission a 

monthly report within 30 calendar days after the 

end of each month that does not coincide with a 

fiscal quarter end. Consequently, the SIBHC must 

file a monthly report 8 times each year. (8 hours × 

8 months) = 64 hours/year. 

8 (16 hours × 4 quarters in a year) = 64 hours/year. 

9 (64 hours per year to prepare and file monthly 

reports + 64 hours each year to prepare and file 

quarterly reports + 200 hours each year to prepare 

and file annual audit reports) × 3 SIBHCs = 984 

hours. 

10We believe that an SIBHC would have a Senior 

Accountant prepare and file these reports. 

According to the Securities Industry Financial 

Management Association (or ‘‘SIFMA’’), the hourly 

cost of a Senior Accountant is $178, as reflected in 

the SIFMA’s Report on Management and 

Professional Earnings for 2008, and 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. ($178 × 8 hours) = $1,424. 

($1,424 × 8 months) = $11,392. 

11We believe that an SIBHC would have a Senior 

Accountant prepare and file these reports. The 

hourly cost of a Senior Accountant is $178. ($178 

× 16 hours) = $2,842. ($2,848 × 4 quarters) = 

$11,392. 

12We believe that an SIBHC would have a Senior 

Internal Auditor work with accountants to prepare 

and file these reports. According to the SIFMA, the 

hourly cost of a Senior Internal Auditor is $202, as 

reflected in its Report on Management and 

Professional Earnings for 2008, and 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. ($202 × 200 hours) = 

$40,400. 

13 (($11,392 +$11,392 + $40,400) × 3 SIBHCs) = 

$189,552. 

14 17 CFR 240.17i–5(b)(3). 

15 15 U.S.C. 78q(j) 

16 5 U.S.C. 552(b)(3)(B). 

‘‘IBHC’’) may voluntarily be supervised 

by the Commission as a supervised 

investment bank holding company (or 

‘‘SIBHC’’).3 In 2004, the Commission 

promulgated rules, including Rule 17i– 

6, to create a framework for the 

Commission to supervise SIBHCs.4 This 

framework includes qualification 

criteria for SIBHCs, as well as 

recordkeeping and reporting 

requirements. Among other things, this 

regulatory framework for SIBHCs is 

intended to provide a basis for non-U.S. 

financial regulators to treat the 

Commission as the principal U.S. 

consolidated home-country supervisor 

for SIBHCs and their affiliated brokerdealers.5

Pursuant to Section 17(i)(3)(A) of the 

Exchange Act, an SIBHC must make and 

keep records, furnish copies thereof, 

and make such reports as the 

Commission may require by rule.6 Rule 

17i–6 requires that an SIBHC file with 

the Commission certain monthly and 

quarterly reports and an annual audit 

report. 

The collections of information 

required by Rule 17i–6 are necessary to 

allow the Commission to adequately to 

supervise the activities of these SIBHCs 

and to effectively determine whether 

supervision of an IBHC as an SIBHC is 

necessary or appropriate in furtherance 

of the purposes of Section 17 of the Act. 

Rule 17i–6s also enhances the 

Commission’s supervision of a SIBHCs’ 

subsidiary broker-dealers through 

collection of additional information and 

inspections of affiliates of those brokerdealers. Without these reports, the 

Commission would be unable to 

adequately supervise an SIBHC, nor 

would it be able to determine whether 

continued supervision of an IBHC as an 

SIBHC were necessary and appropriate 

in furtherance of the purposes of 

Section 17 of the Act. 

We estimate that three IBHCs will file 

Notices of Intention with the 

Commission to be supervised by the 

Commission as SIBHCs. An SIBHC will 

require about 8 hours to prepare and file 

each monthly report required by this 

rule (or approximately 64 hours per 

year).7 On average, it will take an SIBHC 

about 16 hours each quarter (or 64 hours 

each year) 8 to prepare and file the 

quarterly reports required by this rule. 

An SIBHC will require about 200 hours 

to prepare and file the annual audit 

reports required by this rule. 

Consequently, the total annual burden 

of Rule 17i–6 on all SIBHCs is 

approximately 984 hours.9

Rule 17i–6 requires that an SIBHC file 

certain monthly and quarterly reports 

with the Commission, as well as an 

annual audit report. The average cost for 

an SIBHC to prepare and file the 

monthly reports is about $1,424 per 

month, and thus approximately $11,392 

per year.10 On average, an SIBHC will 

incur a quarterly cost of $2,848 to 

prepare and file the required quarterly 

reports, and thus will incur an annual 

cost of $11,392 to file these reports.11

Finally, an SIBHC, on average, will 

incur an annual cost of $40,400 to 

prepare and file an annual audit.12

Thus, the total dollar cost of the ongoing 

paperwork burden associated with Rule 

17i–6 is approximately $189,552 13

We believe that an IBHC likely will 

upgrade its information technology 

(‘‘IT’’) systems in order to more 

efficiently comply with certain of the 

SIBHC framework rules (including 

Rules 17i–4, 17i–5, 17i–6 and 17i–7), 

and that this would be a one-time cost. 

Depending on the state of development 

of the IBHC’s IT systems, it would cost 

an IBHC between $1 million and $10 

million to upgrade its IT systems to 

comply with the SIBHC framework of 

rules. Thus, on average, it would cost 

each of the three IBHCs about $5.5 

million to upgrade their IT systems, or 

approximately $16.5 million in total. It 

is impossible to determine what 

percentage of the IT systems costs 

would be attributable to each Rule, so 

we allocated the total estimated upgrade 

costs equally (at 25% for each of the 

above-mentioned Rules), with 

$4,125,000 attributable to Rule 17i–6. 

The reports and notices required to be 

filed pursuant to Rule 17i–6 must be 

preserved for a period of not less than 

three years.14 The collection of 

information is mandatory and the 

information required to be provided to 

the Commission pursuant to this Rule is 

deemed confidential pursuant to 

Section 17(j) of the Securities Exchange 

Act of 1934 15 and Section 552(b)(3)(B) 

of the Freedom of Information Act,16

notwithstanding any other provision of 

law. In addition, paragraph 17i–6(h) 

specifies that all reports and statements 

filed by an SIBHC in accordance with 

Rule 17i–6 shall be accorded 

confidential treatment. 

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. 

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@comb.eop.gov; and 

(ii) Charles Boucher, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Shirley 

Martinson, 6432 General Green Way, 

Alexandria, Virginia 22312 or send an email to PRA_Mailbox@sec.gov. 

Comments must be submitted to OMB 

within 30 days of this notice. 

Dated: December 30, 2009. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–5 Filed 1–6–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission of OMB Review; Comment 

Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investor 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES