Document ID: SEC-2010-0020-0001
Agency: sec
Document Type: Notice
Title: Submission for OMB Review; Comment Request
Posted Date: 2010-01-07T05:00Z

[Federal Register Volume 75, Number 4 (Thursday, January 7, 2010)]
[Notices]
[Pages 1004-1005]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: X10-330107]

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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.

Extension: 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.
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    \1\ 44 U.S.C. 3501 et seq.
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    Section 231 of the Gramm-Leach-Bliley 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

[[Page 1005]]

``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 
broker-dealers.\5\
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    \2\ Public Law 106-102, 113 Stat. 1338 (1999).
    \3\ See 15 U.S.C. 78q(i).
    \4\ See Exchange Act Release No. 49831 (Jun. 8, 2004), 69 FR 
34472 (Jun. 21, 2004).
    \5\ See 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).
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    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.
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    \6\ 15 U.S.C. 78q(i)(3)(A).
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    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 broker-dealers. 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\
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    \7\ The 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 x 8 months) = 64 
hours/year.
    \8\ (16 hours x 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) x 3 SIBHCs = 984 
hours.
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    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\
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    \10\ We 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 x 8 hours) = $1,424. ($1,424 x 8 months) = $11,392.
    \11\ We believe that an SIBHC would have a Senior Accountant 
prepare and file these reports. The hourly cost of a Senior 
Accountant is $178. ($178 x 16 hours) = $2,842. ($2,848 x 4 
quarters) = $11,392.
    \12\ We 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 x 200 hours) = $40,400.
    \13\ (($11,392 +$11,392 + $40,400) x 3 SIBHCs) = $189,552.
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    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.
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    \14\ 17 CFR 240.17i-5(b)(3).
    \15\ 15 U.S.C. 78q(j)
    \16\ 5 U.S.C. 552(b)(3)(B).
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    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 e-mail 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