Document ID: SEC-2009-1509-0001
Agency: sec
Document Type: Notice
Title: Agency Information Collection Activities; Proposals, Submissions, and Approvals
Posted Date: 2009-10-23T04:00Z

[Federal Register: October 23, 2009 (Volume 74, Number 204)]
[
Notices]               
[Page 54864-54865]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23oc09-88]                         

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SECURITIES AND EXCHANGE COMMISSION

 
Proposed Collection; Comment Request

Upon Written Request, Copies Available From: U.S. 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 requests for extension 

of the previously approved collections of information discussed below. 

The Code of Federal Regulations citation to this collection of 

information is the following: 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 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-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\ Pub. L. No. 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. 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.\7\

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

    \7\ 17 CFR 240.17i-5(b)(3).

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    The collections of information required by Rule 17i-6 are necessary 

to allow the Commission 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-6 also enhances the Commission's 

supervision of an SIBHC's 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 96 hours per year).\8\ On 

average, it will take an SIBHC about 16 hours each quarter (or 64 hours 

each year) \9\ 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.\10\

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    \8\ 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.

    \9\ (16 hours x 4 quarters in a year) = 64 hours/year.

    \10\ (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

[[Page 54865]]

per year.\11\ 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.\12\ 

Finally, an SIBHC, on average, will incur an annual cost of $40,400 to 

prepare and file an annual audit.\13\ Thus, the total dollar cost of 

the ongoing paperwork burden associated with Rule 17i-6 is 

approximately $189,552.\14\

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    \11\ 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.

    \12\ 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) = $2,848. ($2,848 x 4 

quarters) = $11,392.

    \13\ 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.

    \14\ (($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.

    Written comments are invited on: (a) Whether the proposed 

collection of information is necessary for the proper performance of 

the functions of the agency, including whether the information shall 

have practical utility; (b) the accuracy of the agency's estimate of 

the burden of the proposed collection of information; (c) ways to 

enhance the quality, utility, and clarity of the information to be 

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.

    Comments should be directed to 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.

    Dated: October 19, 2009.

Florence E. Harmon,

Deputy Secretary.

[FR Doc. E9-25486 Filed 10-22-09; 8:45 am]

BILLING CODE 8011-01-P