Document ID: SEC-2009-1575-0001
Agency: sec
Document Type: Notice
Title: Proposed Collection; Comment Request
Posted Date: 2009-11-09T05:00Z

[Federal Register: November 9, 2009 (Volume 74, Number 215)]
[Notices]               
[Page 57717-57718]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09no09-90]                         

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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-5, SEC File No. 270-531, OMB Control No. 3235-0590.

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 \1\ the Securities and Exchange Commission (``Commission'') 
intends to submit to the Office of Management and Budget a request 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-5.
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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 (15 
U.S.C. 78q) 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-5, 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 would 
be required to make and keep records, furnish copies thereof, and make 
such reports as the Commission may require by rule.\6\ Rule 17i-5 would 
require that an SIBHC make and keep current certain records relating to 
its business. In addition, it would require that an SIBHC preserve 
those and other records for certain prescribed time periods.
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    \6\ 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.
    In addition to the one firm currently supervised by the Commission 
as an SIBHC, we estimate that 2 IBHCs will file Notices of Intention 
with the Commission to be supervised by the Commission as SIBHCs; for a 
total of three firms. An SIBHC will generally require about 40 hours to 
create and document a contingency plan regarding funding and liquidity 
of the affiliate group at a cost of $9,200 per SIBHC.\7\ An SIBHC will 
require, on average, approximately 64 hours each quarter to create a 
record regarding stress tests, or approximately 256 hours each year and 
a cost of $49,920.\8\ 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 for a cost of $84,000.\9\ Finally, 
an SIBHC will generally require about 24 hours per year to maintain the 
specified records for a cost of $4,632.\10\
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    \7\ We believe that an SIBHC would have a Senior Treasury 
Manager create this record. According to the Securities Industry and 
Financial Markets Association (``SIFMA''), the hourly cost of a 
Senior Treasury Manager is $230, as reflected in the SIFMA's Report 
on Management and Professional Earnings for 2008 (``SIFMA's Report 
on Professional Earnings''), 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. ($230 x 40 hours) = $9,200.
    \8\ We believe that an SIBHC would have a Floor Supervisor, or 
equivalent, create this record with an hourly cost of $195, as 
reflected in SIFMA's Report on Professional Earnings''). ($195 x 
256) = $49,920.
    \9\ 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. We believe that an SIBHC would have an Intermediate 
Accountant create this record, which according to SIFMA's Report on 
Professional Earnings receives an hourly rate of $141. ($141 x (30 
minutes x 20 counterparties)) = $84,000.
    \10\ We believe that an SIBHC would have a Program Analyst 
perform this task and according to SIFMA's Report on Professional 
Earnings, a Programmer Analyst receives an hourly rate of $193. 
($193 x 24) = $4,632.
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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.
    Written comments are invited on: (a) Whether the collection of 
information is necessary for the proper performance of the functions of 
the agency, including

[[Page 57718]]

whether the information will have practical utility; (b) the accuracy 
of the agency's estimate of the burden of the collection of 
information; (c) ways to enhance the quality, utility, and clarity of 
the information 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: November 2, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-26884 Filed 11-6-09; 8:45 am]

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