Federal Register / Vol. 87, No. 49 / Monday, March 14, 2022 / Notices 14305 

1 This estimate is based on the following 

calculation: 2 hours × $455 (hourly rate for internal 

counsel) = $910. See infra note 2 (discussing the 

methodology for estimating the hourly rate for 

internal counsel). 

2 SEC staff estimates that, of the 29 hours 

incurred to develop and obtain board approval of 

a Program and train the financial institution’s or 

creditor’s staff, 10 hours will be spent by internal 

counsel at an hourly rate of $455, 17 hours will be 

spent by administrative assistants at an hourly rate 

of $89, and 2 hours will be spent by the board of 

directors as a whole at an hourly rate of $4,770. 

Thus, the estimated $15,603 in additional costs is 

based on the following calculation: (10 hours × 

$455 = $4,550) + (17 hours × $89 = $1,513) + (2 

hours × $4,770 = $9,540) = $15,603. 

The cost estimate for internal counsel is derived 

from SIFMA’s Management & Professional Earnings 

in the Securities Industry 2013, modified to account 

for an 1800-hour work-year and multiplied by 5.35 

to account for bonuses, entity size, employee 

benefits, and overhead, and adjusted for inflation. 

The cost estimated for administrative assistants is 

derived from SIFMA’s Office Salaries in the 

Securities Industry 2013, modified to account for an 

1800-hour work-year and multiplied by 2.93 to 

account for bonuses, entity size, employee benefits 

and overhead, and adjusted for inflation. The cost 

estimate for the board of directors is derived from 

estimates made by SEC staff regarding typical board 

size and compensation that is based on information 

received from fund representatives and publicly 

available sources, and adjusted for inflation. 

3 Based on a review of new registrations typically 

filed with the SEC each year, SEC staff estimates 

that approximately 1,277 investment advisers, 109 

broker dealers, 34 investment companies, and 2 

ESCs typically apply for registration with the SEC 

or otherwise are newly formed each year, for a total 

of 1,422 entities that could be financial institutions 

or creditors. Of these, staff estimates that all of the 

investment companies, ESCs, and broker-dealers are 

likely to qualify as financial institutions or 

creditors, and 33% of investment advisers (or 426) 

are likely to qualify. See Identity Theft Red Flags, 

Investment Company Act Release No. 30456 (Apr. 

10, 2013) (‘‘Adopting Release’’) at n.190 (discussing 

the staff’s analysis supporting its estimate that 33% 

of investment advisers are likely to qualify as 

financial institutions or creditors). We therefore 

estimate that a total of 571 total financial 

institutions or creditors will bear the initial onetime burden of assessing covered accounts under 

Regulation S–ID. 

4 These estimates are based on the following 

calculations: 571 entities × 2 hours = 1,142 hours; 

571 entities × $910 = $519,610. 

5 In the Proposing Release, the SEC requested 

comment on the estimate that approximately 90% 

of all financial institutions and creditors maintain 

covered accounts; the SEC received no comments 

on this estimate. 

JoAnn M. Strasser, JoAnn.Strasser@

ThompsonHine.com. 

FOR FURTHER INFORMATION CONTACT: 

Steven I. Amchan, Senior Counsel, or 

Lisa Reid Ragen, Branch Chief, at (202) 

551–6825 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: For 

Applicants’ representations, legal 

analysis, and conditions, please refer to 

Applicants’ second amended and 

restated application, dated February 3, 

2022, which may be obtained via the 

Commission’s website by searching for 

the file number at the top of this 

document, or for an Applicant using the 

Company name search field, on the 

SEC’s EDGAR system. The SEC’s 

EDGAR system may be searched at, at 

http://www.sec.gov/edgar/searchedgar/ 

legacy/companysearch.html. You may 

also call the SEC’s Public Reference 

Room at (202) 551–8090. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Dated: March 9, 2022. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–05345 Filed 3–11–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–644, OMB Control No. 

3235–0692] 

Proposed Collection; Comment 

Request; Extension: Regulation S–ID 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736. 

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 (the 

‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

Regulation S–ID (17 CFR 248), 

including the information collection 

requirements thereunder, is designed to 

better protect investors from the risks of 

identity theft. Under Regulation S–ID, 

SEC-regulated entities are required to 

develop and implement reasonable 

policies and procedures to identify, 

detect, and respond to relevant red flags 

(the ‘‘Identity Theft Red Flags Rules’’) 

and, in the case of entities that issue 

credit or debit cards, to assess the 

validity of, and communicate with 

cardholders regarding, address changes. 

Section 248.201 of Regulation S–ID 

includes the following information 

collection requirements for each SECregulated entity that qualifies as a 

‘‘financial institution’’ or ‘‘creditor’’ 

under Regulation S–ID and that offers or 

maintains covered accounts: (i) Creation 

and periodic updating of an identity 

theft prevention program (‘‘Program’’) 

that is approved by the board of 

directors, an appropriate committee 

thereof, or a designated senior 

management employee; (ii) periodic 

staff reporting to the board of directors 

on compliance with the Identity Theft 

Red Flags Rules and related guidelines; 

and (iii) training of staff to implement 

the Program. Section 248.202 of 

Regulation S–ID includes the following 

information collection requirements for 

each SEC-regulated entity that is a credit 

or debit card issuer: (i) Establishment of 

policies and procedures that assess the 

validity of a change of address 

notification if a request for an additional 

or replacement card on the account 

follows soon after the address change; 

and (ii) notification of a cardholder, 

before issuance of an additional or 

replacement card, at the previous 

address or through some other 

previously agreed-upon form of 

communication, or alternatively, 

assessment of the validity of the address 

change request through the entity’s 

established policies and procedures. 

SEC staff estimates of the hour 

burdens associated with section 248.201 

under Regulation S–ID include the onetime burden of complying with this 

section for newly-formed SEC-regulated 

entities, as well as the ongoing costs of 

compliance for all SEC-regulated 

entities. 

All newly-formed financial 

institutions and creditors would be 

required to conduct an initial 

assessment of covered accounts, which 

SEC staff estimates would entail a onetime burden of 2 hours. Staff estimates 

that this burden would result in a cost 

of $910 to each newly-formed financial 

institution or creditor.1 To the extent a 

financial institution or creditor offers or 

maintains covered accounts, SEC staff 

estimates that the financial institution 

or creditor would also incur a one-time 

burden of 25 hours to develop and 

obtain board approval of a Program, and 

a one-time burden of 4 hours to train the 

financial institution’s or creditor’s staff, 

for a total of 29 additional burden hours. 

Staff estimates that these burdens would 

result in additional costs of $15,603 for 

each financial institution or creditor 

that offers or maintains covered 

accounts.2

SEC staff estimates that approximately 

571 SEC-regulated financial institutions 

and creditors are newly formed each 

year.3 Each of these 571 entities will 

need to conduct an initial assessment of 

covered accounts, for a total of 1,142 

hours at a total cost of $519,610.4 Of 

these 571 entities, staff estimates that 

approximately 90% (or 514) maintain 

covered accounts.5 Accordingly, staff 

estimates that the additional initial 

burden for SEC-regulated entities that 

are likely to qualify as financial 

institutions or creditors and maintain 

covered accounts is 14,906 hours at an 


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14306 Federal Register / Vol. 87, No. 49 / Monday, March 14, 2022 / Notices 

6 These estimates are based on the following 

calculations: 514 financial institutions and creditors 

that maintain covered accounts × 29 hours = 14,906 

hours; 514 financial institutions and creditors that 

maintain covered accounts × $15,603 = $8,019,942. 

7 These estimates are based on the following 

calculations: 1,142 hours + 14,906 hours = 16,048 

hours; $519,610 + $8,019,942 = $8,539,552. 

8 This estimate is based on the following 

calculation: 1 hour × $455 (hourly rate for internal 

counsel) = $455. See supra note 2 (discussing the 

methodology for estimating the hourly rate for 

internal counsel). 

9 Staff estimates that, of the 9.5 hours incurred 

to prepare and present the annual report to the 

board and periodically review and update the 

Program, 8.5 hours will be spent by internal counsel 

at an hourly rate of $455, and 1 hour will be spent 

by the board of directors as a whole at an hourly 

rate of $4,770. Thus, the estimated $7,874 in 

additional annual costs is based on the following 

calculation: (8.5 hours × $455 = $3,868) + (1 hour 

× $4,770 = $4,770) = $8,638. See supra note 2 

(discussing the methodology for estimating the 

hourly rate for internal counsel and the board of 

directors). 

10 Based on a review of entities that the SEC 

regulates, SEC staff estimates that, as of September 

30, 2021, there are approximately 14,705 

investment advisers, 3,533 broker-dealers, 1,380 

active open-end investment companies, and 100 

ESCs. Of these, staff estimates that all of the brokerdealers, open-end investment companies and ESCs 

are likely to qualify as financial institutions or 

creditors. We also estimate that approximately 33% 

of investment advisers, or 4,902 investment 

advisers, are likely to qualify. See Adopting 

Release, supra note 3, at n.190 (discussing the 

staff’s analysis supporting its estimate that 33% of 

investment advisers are likely to qualify as financial 

institutions or creditors). We therefore estimate that 

a total of 9,915 financial institutions or creditors 

will bear the ongoing burden of assessing covered 

accounts under Regulation S–ID. (The SEC staff 

estimates that the other types of entities that are 

covered by the scope of the SEC’s rules will not be 

financial institutions or creditors and therefore will 

not be subject to the rules’ requirements.) 

The estimates of 9,915 hours and $3,784,800 are 

based on the following calculations: 9,915 financial 

institutions and creditors × 1 hour = 9,915 hours; 

9,915 financial institutions and creditors × $455 = 

$4,511,325. 

11 See supra note 5 and accompanying text. If a 

financial institution or creditor does not maintain 

covered accounts, there would be no ongoing 

annual burden for purposes of the PRA. 

12 These estimates are based on the following 

calculations: 8,924 financial institutions and 

creditors that maintain covered accounts × 9.5 

hours = 84,778 hours; 8,924 financial institutions 

and creditors that maintain covered accounts × 

$8,638 = $77,085,512. 

13 These estimates are based on the following 

calculations: 9,915 hours + 84,778 hours = 94,693 

hours; $4,511,325 + $77,085,512 = $81,596,837. 

14 § 248.202(a). 

additional cost of $8,019,942.6 Thus, the 

total initial estimated burden for all 

newly-formed SEC-regulated entities is 

16,048 hours at a total estimated cost of 

$8,539,552.7

Each financial institution and creditor 

would be required to conduct periodic 

assessments to determine if the entity 

offers or maintains covered accounts, 

which SEC staff estimates would entail 

an annual burden of 1 hour per entity. 

Staff estimates that this burden would 

result in an annual cost of $455 to each 

financial institution or creditor.8 To the 

extent a financial institution or creditor 

offers or maintains covered accounts, 

staff estimates that the financial 

institution or creditor also would incur 

an annual burden of 2.5 hours to 

prepare and present an annual report to 

the board, and an annual burden of 7 

hours to periodically review and update 

the Program (including review and 

preservation of contracts with service 

providers, as well as review and 

preservation of any documentation 

received from service providers). Staff 

estimates that these burdens would 

result in additional annual costs of 

$8,638 for each financial institution or 

creditor that offers or maintains covered 

accounts.9

SEC staff estimates that there are 

9,915 SEC-regulated entities that are 

either financial institutions or creditors, 

and that all of these will be required to 

periodically review their accounts to 

determine if they offer or maintain 

covered accounts, for a total of 9,915 

hours for these entities at a total cost of 

$4,511,325.10 Of these 9,915 entities, 

staff estimates that approximately 90 

percent, or 8,924, maintain covered 

accounts, and thus will need the 

additional burdens related to complying 

with the rules.11 Accordingly, staff 

estimates that the additional annual 

burden for SEC-regulated entities that 

qualify as financial institutions or 

creditors and maintain covered accounts 

is 84,778 hours at an additional cost of 

$77,085,512.12 Thus, the total estimated 

ongoing annual burden for all SECregulated entities is 94,693 hours at a 

total estimated annual cost of 

$81,596,837.13

The collections of information 

required by section 248.202 will apply 

only to SEC-regulated entities that issue 

credit or debit cards.14 SEC staff 

understands that SEC-regulated entities 

generally do not issue credit or debit 

cards, but instead partner with other 

entities, such as banks, that issue cards 

on their behalf. These other entities, 

which are not regulated by the SEC, are 

already subject to substantially similar 

change of address obligations pursuant 

to the Agencies’ identity theft red flags 

rules. Therefore, staff does not expect 

that any SEC-regulated entities will be 

subject to the information collection 

requirements of section 248.202, and 

accordingly, staff estimates that there is 

no hour or cost burden for SECregulated entities related to section 

248.202. 

In total, SEC staff estimates that the 

aggregate annual information collection 

burden of Regulation S–ID is 110,741 

hours (16,048 hours + 94,693 hours). 

This estimate of burden hours is made 

solely for the purposes of the Paperwork 

Reduction Act and is not derived from 

a quantitative, comprehensive, or even 

representative survey or study of the 

burdens associated with Commission 

rules and forms. Compliance with 

Regulation S–ID, including compliance 

with the information collection 

requirements thereunder, is mandatory 

for each SEC-regulated entity that 

qualifies as a ‘‘financial institution’’ or 

‘‘creditor’’ under Regulation S–ID (as 

discussed above, certain collections of 

information under Regulation S–ID are 

mandatory only for financial 

institutions or creditors that offer or 

maintain covered accounts). Responses 

will not be kept confidential. 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. 

Written comments are invited on: (i) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(ii) the accuracy of the agency’s estimate 

of the burden of the collection of 

information; (iii) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (iv) 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 May 13, 2022. 

Please direct your written comments 

to David Bottom, Director/Chief 

Information Officer, Securities and 

Exchange Commission, C/O John R. 

Pezzullo, 100 F Street NE, Washington, 

DC 20549; or send an email to: PRA_

Mailbox@sec.gov. 

Dated: March 9, 2022. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–05350 Filed 3–11–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: 2:00 p.m. on Thursday, 

March 17, 2022. 

PLACE: The meeting will be held via 

remote means and/or at the 

Commission’s headquarters, 100 F 

Street NE, Washington, DC 20549. 


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