Notice2022-20018
Submission for OMB Review; Comment Request; Extension: Rule 18a-1
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 15, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 178 (Thursday, September 15, 2022)</title>
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[Federal Register Volume 87, Number 178 (Thursday, September 15, 2022)]
[Notices]
[Pages 56734-56735]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-20018]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-649; OMB Control No. 3235-0701]
Submission for OMB Review; Comment Request; Extension: Rule 18a-1
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 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') has submitted to the Office of Management
and Budget
[[Page 56735]]
(``OMB'') a request for approval of extension of the previously
approved collection of information provided for in Rule 18a-1 (17 CFR
240.18a-1), under the Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.) (``Exchange Act'').
Rule 18a-1 establishes net capital requirements for nonbank
security-based swap dealers that are not also broker-dealers registered
with the Commission (``stand-alone SBSDs''). First, under paragraphs
(a)(2) and (d) of Rule 18a-1, a stand-alone SBSD may apply to the
Commission to be authorized to use internal value-at-risk (``VaR)
models to compute net capital and a stand-alone SBSD authorized to use
internal models must review and update the models it uses to compute
market and credit risk, as well as back-test the models. Second, under
paragraph (f) of Rule 18a-1, a stand-alone SBSD is required to comply
with certain requirements of Exchange Act Rule 15c3-4 (17 CFR 240.15c3-
4). Rule 15c3-4 requires OTC derivatives dealers and firms subject to
its provisions to establish, document, and maintain a system of
internal risk management controls to assist the firm in managing the
risks associated with business activities, including market, credit,
leverage, liquidity, legal, and operational risks. Third, for purposes
of calculating ``haircuts'' on credit default swaps, paragraph
(c)(1)(vi)(B)(1)(iii) of Rule 18a-1 requires stand-alone SBSDs that are
not using internal models to use an industry sector classification
system that is documented and reasonable in terms of grouping types of
companies with similar business activities and risk characteristics.
Fourth, under paragraph (h) of Rule 18a-1, stand-alone SBSDs are
required to provide the Commission with certain written notices with
respect to equity withdrawals. Fifth, under paragraph (c)(5) of
Appendix D to Rule 18a-1 (17 CFR 240.18a-1d), stand-alone SBSDs are
required to file with the Commission two copies of any proposed
subordinated loan agreement (including nonconforming subordinated loan
agreements) at least 30 days prior to the proposed execution date of
the agreement. Finally, under paragraph (c)(1)(ix)(C) of Rule 18a-1, a
nonbank SBSD may treat collateral held by a third-party custodian to
meet an initial margin requirement of a security-based swap or swap
customer as being held by the nonbank SBSD for purposes of the capital
in lieu of margin charge provisions of the rule if certain conditions
are met. In particular, the SBSD must execute an account control
agreement and must maintain written documentation of its analysis that
in the event of a legal challenge the account control agreement would
be held to be legal, valid, binding, and enforceable under the
applicable law.
The aggregate annual burden for all respondents is estimated to be
21,024 hours. The aggregate annual cost burden for all respondents is
estimated to be $ 2,598,500.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number.
The public may view background documentation for this information
collection at the following website: <a href="http://www.reginfo.gov">www.reginfo.gov</a>. Find this
particular information collection by selecting ``Currently under 30-day
Review--Open for Public Comments'' or by using the search function.
Written comments and recommendations for the proposed information
collection should be sent by October 17, 2022 to (i) <a href="http://www.reginfo.gov/public/do/PRAMain">www.reginfo.gov/public/do/PRAMain</a> and (ii) David Bottom, Director/Chief Information
Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F
Street NE, Washington, DC 20549, or by sending an email to:
<a href="/cdn-cgi/l/email-protection#28787a6977654941444a4750685b4d4b064f475e"><span class="__cf_email__" data-cfemail="59090b1806143830353b3621192a3c3a773e362f">[email protected]</span></a>.
Dated: September 12, 2022.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-20018 Filed 9-14-22; 8:45 am]
BILLING CODE 8011-01-P
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