Document ID: SEC-2006-1431-0001
Agency: sec
Document Type: Notice
Title: Agency information collection activities; proposals, submissions, and approvals
Posted Date: 2006-11-08T05:00Z

[Federal Register: November 8, 2006 (Volume 71, Number 216)]
[Notices]               
[Page 65550-65551]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08no06-122]                         

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SECURITIES AND EXCHANGE COMMISSION

 
Submission for OMB Review; Comment Request

Upon written request, copies available from: Securities and Exchange 
Commission, Office of Filings and Information Services, Washington, DC 
20549.

Extension:
    Rule 17i-5; SEC File No. 270-531; OMB Control No. 3235-0590.

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.) the Securities

[[Page 65551]]

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.
    Section 231 of the Gramm-Leach-Bliley Act of 1999 \1\ (the 
``GLBA'') amended Section 17 of the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.) (the ``Exchange Act'' or the ``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'').\2\ In 2004, the Commission promulgated rules, 
including Rule 17i-5, (17 CFR 240.17i-5) to create a framework for the 
Commission to supervise SIBHCs.\3\ 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.\4\
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    \1\ Pub. L. No. 106-102, 113 Stat. 1338 (1999).
    \2\ See 15 U.S.C. 78q(i).
    \3\ See Exchange Act Release No. 49831 (Jun. 8, 2004), 69 FR 
34472 (Jun. 21, 2004).
    \4\ 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 would 
be required to make and keep records, furnish copies thereof, and make 
such reports as the Commission may require by rule.\5\ Rule 17i-5 
requires that an SIBHC make and keep current certain records relating 
to its business. In addition, it requires that an SIBHC preserve those 
and other records for at least three years.
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    \5\ 15 U.S.C. 78q(i)(3)(A).
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    The collections of information required pursuant to Rule 17i-5 are 
necessary so that the Commission can adequately supervise the 
activities of these SIBHCs. In addition, these collections of 
information are needed 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 Act. Rule 17i-5 
also enhances the Commission's supervision of the SIBHCs' subsidiary 
broker-dealers through collection of additional information and 
inspections of affiliates of those broker-dealers. Without this 
information and documentation, 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, on average, approximately 64 hours each quarter to create 
a record regarding stress tests, or approximately 256 hours each year. 
In addition, an SIBHC will generally require about 40 hours to create 
and document a contingency plan regarding funding and liquidity of the 
affiliate group. Further, an SIBHC will establish approximately 20 new 
counterparty arrangements each year, and will take, on average, about 
30 minutes to create a record regarding the basis for credit risk 
weights for each such counterparty.\6\ Finally, an SIBHC will generally 
require about 24 hours per year to maintain the specified records.
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    \6\ On average, each firm presently maintains relationships with 
approximately 1,000 counterparties. Further, firms generally already 
maintain documentation regarding their credit decisions, including 
their determination of credit risk weights, for those 
counterparties.
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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-5.
    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,\7\ 
notwithstanding any other provision of law.
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    \7\ 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: 
David_Rostker@omb.eop.gov; and (ii) R. Corey Booth, Director/Chief 

Information Officer, Securities and Exchange Commission, c/o Shirley 
Martinson, 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: October 23, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6-18803 Filed 11-7-06; 8:45 am]

BILLING CODE 8011-01-P