CCA Def - PRA Supporting Statement - 2018.10.19

SUPPORTING STATEMENT for the Paperwork Reduction Act Information Collection
Submission for Definition of “Covered Clearing Agency” under Rule 17Ad-22
This submission is being made pursuant to the Paperwork Reduction Act of 1995, 44 U.S.C.
3501 et seq.
A.

JUSTIFICATION
1. Necessity of Information Collection
Legal Requirements
i.

Exchange Act

Section 17A of the Securities Exchange Act of 1934 (“Exchange Act”) directs the Securities and
Exchange Commission (“Commission”) to facilitate the establishment of (i) a national system for
the prompt and accurate clearance and settlement of securities transactions and (ii) linked or
coordinated facilities for clearance and settlement of securities transactions. 1 In facilitating the
establishment of the national clearance and settlement system, the Commission must have due
regard for the public interest, the protection of investors, the safeguarding of securities and
funds, and maintenance of fair competition among brokers and dealers, clearing agencies, and
transfer agents. 2
Clearing agencies are broadly defined in the Exchange Act and undertake a variety of functions. 3
Under Section 17A of the Exchange Act and Rule 17Ab2-1 under the Exchange Act, an entity
that meets the definition of a clearing agency is required to register with the Commission or
obtain from the Commission an exemption from registration prior to performing the functions of
a clearing agency. 4 To grant registration to a clearing agency, the Exchange Act requires the
Commission to determine that the rules and operations of the applicant clearing agency meet the
standards set forth in Section 17A of the Exchange Act. 5 Specifically, Section 17A(b)(3)
1

See 15 U.S.C. 78q-1(a)(2); see also Report of the Senate Committee on Banking,
Housing & Urban Affairs, S. Rep. No. 94-75, at 4 (1975) (urging that “[t]he Committee believes
the banking and security industries must move quickly toward the establishment of a fully
integrated national system for the prompt and accurate processing and settlement of securities
transactions”).
2

See 15 U.S.C. 78q-1(a)(2)(A).

3

See 15 U.S.C. 78c(a)(23)(A) (providing the definition of “clearing agency”); see also
Exchange Act Release No. 34-71699 (Mar. 12, 2014), 79 FR 16865 (Mar. 26, 2014), corrected at
79 FR 29507, 29510–11 (May 22, 2014) (“2014 Proposing Release”); Exchange Act Release No.
34-68080 (Oct. 22, 2012), 77 FR 66219, 66221–22 (Nov. 2, 2012) (discussing the same) (“2012
Adopting Release”).
4

See 15 U.S.C. 78q-1; 17 CFR 240.17Ab2-1.

5

See 15 U.S.C. 78q-1(b)(3)(A) through(I) (identifying nine determinations that the

1

provides that a clearing agency shall not be registered unless the Commission determines that the
clearing agency’s rules are consistent with the Exchange Act. In so doing, the Commission must
determine that, among other things, (i) the clearing agency is so organized and has the capacity
to be able to facilitate the prompt and accurate clearance and settlement of securities transactions
and to safeguard securities or funds in its custody or control, (ii) the rules of the clearing agency
assure a fair representation of its members and participants in the selection of its directors and
administration of its affairs, (iii) the rules of the clearing agency provide for the equitable
allocation of reasonable dues and fees, and (iv) the rules of the clearing agency are designed to
promote the prompt and accurate clearance and settlement of securities transactions. 6
Following this registration process, the Commission supervises registered clearing agencies
using various tools. One of these tools is the rule filing process for self-regulatory organizations
(“SROs”), set forth in Section 19(b) of the Exchange Act and rules and regulations thereunder. 7
A registered clearing agency is required to file with the Commission any proposed rule or
proposed change in, addition to, or deletion from the registered clearing agency’s rules. 8 The
Commission publishes all proposed rule changes for comment and reviews them. Proposed rule
changes are generally required to be approved by the Commission prior to going into effect. 9
When reviewing a proposed rule change, the Commission considers the submissions of the
clearing agency together with any comments received on the proposed rule change in making a
determination of whether the proposed rule change is consistent with the requirements of the
Exchange Act. In addition, Section 17A of the Exchange Act further provides the Commission
with authority to adopt rules as necessary or appropriate in the public interest, for the protection
of investors, or otherwise in furtherance of the purposes of the Exchange Act and prohibits a
clearing agency from engaging in any activity in contravention of such rules and regulations. 10
Commission must make regarding the rules and structure of a clearing agency to grant
registration). In 1980, the Commission published a statement of the views and positions of
Commission staff regarding the requirements of Section 17A. See Exchange Act Release No.
16900 (June 17, 1980), 45 FR 41920 (June 23, 1980).
6

See 15 U.S.C. 78q-1(b)(3)(A), (C), (D), (F).

7

Upon registration, registered clearing agencies are SROs under Section 3(a)(26) of the
Exchange Act. See 15 U.S.C. 78c(a)(26).
8

An SRO must submit proposed rule changes to the Commission for review and approval
pursuant to Rule 19b-4 under the Exchange Act. A stated policy, practice, or interpretation of an
SRO, such as its written policies and procedures, would generally be deemed to be a proposed
rule change. See 15 U.S.C. 78s(b)(1); 17 CFR 240.19b-4.
9

See 15 U.S.C. 78s(b)(3)(A) (setting forth the types of proposed rule changes that take
effect upon filing with the Commission). The Commission may temporarily suspend those rule
changes within 60 days of filing and institute proceedings to determine whether to approve or
disapprove the rule changes. See 15 U.S.C. 78s(b)(3)(C).
10

See 15 U.S.C. 78q-1(d).

2

In addition, Commission staff conducts examinations of registered and exempt clearing agencies
to assess, among other things, existing and emerging risks, compliance with applicable statutory
and regulatory requirements (including any terms and conditions set forth in an order granting
registration or an exemption from registration), and a clearing agency’s oversight of compliance
by its participants with its rules. Section 21(a) of the Exchange Act provides the Commission
with authority to initiate and conduct investigations to determine if there have been violations of
the federal securities laws. 11 Section 19(h) of the Exchange Act also provides the Commission
with authority to institute civil actions seeking injunctive and other equitable remedies and/or
administrative proceedings arising out of such investigations. 12
ii.

Dodd-Frank Act

Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank
Act”) provides the Commission with authority to regulate certain over-the-counter (“OTC”)
derivatives. Specifically, Title VII added provisions to the Exchange Act that (i) require entities
performing the functions of a clearing agency with respect to security-based swaps (“securitybased swap clearing agencies”) to register with the Commission, and (ii) direct the Commission
to adopt rules with respect to security-based swap clearing agencies. 13
In addition, the Payment, Clearing, and Settlement Supervision Act of 2010 (“Clearing
Supervision Act”), enacted in Title VIII of the Dodd-Frank Act, provides for the enhanced
regulation of certain financial market utilities (“FMUs”). 14 FMUs include clearing agencies that
manage or operate a multilateral system for the purpose of transferring, clearing, or settling
payments, securities, or other financial transactions among financial institutions or between
financial institutions and the FMU. 15 The Financial Stability Oversight Council (“FSOC”) has

11

See 15 U.S.C. 78u(a).

12

See 15 U.S.C. 78s(h).

13

See 15 U.S.C. 78q-1(i), (j); Dodd-Frank Act, Sec. 763(b), 124 Stat. at 1768–69 (adding
paragraphs (i) and (j) to Section 17A of the Exchange Act).
14

The objectives and principles for the risk management standards prescribed under the
Clearing Supervision Act shall be to (i) promote robust risk management; (ii) promote safety and
soundness; (iii) reduce systemic risks; and (iv) support the stability of the broader financial
system. Further, the Clearing Supervision Act states that the standards may address areas such as
risk management policies and procedures; margin and collateral requirements; participant or
counterparty default policies and procedures; the ability to complete timely clearing and
settlement of financial transactions; capital and financial resources requirements for designated
FMUs; and other areas that are necessary to achieve the objectives and principles described
above. See 12 U.S.C. 5464(b), (c).
15

See 12 U.S.C. 5462(6). The definition of “financial market utility” in Section 803(6) of
the Clearing Supervision Act contains a number of exclusions that include, but are not limited to,
certain designated contract markets, registered futures associations, swap data repositories, swap

3

designated certain FMUs as systemically important or likely to become systemically important
(“SIFMUs”). 16 The Commission is the supervisory agency for four SIFMUs: DTC, FICC,
NSCC, and OCC. The Commission jointly regulates ICC and OCC with the Commodity Futures
Trading Commission (“CFTC”). The Commission also jointly regulates ICE Clear Europe and
LCH SA, which have not been designated as systemically important by FSOC, with various
other regulators, including the CFTC and the Bank of England.
SIFMUs are required to file 60-days advance notice of changes to rules, procedures, and
operations that could materially affect the nature or level of risk presented by the SIFMU
(“advance notice”). 17 The Clearing Supervision Act authorizes the Commission to object to
changes proposed in such an advance notice, which would prevent the clearing agency from
implementing the change. 18 The Clearing Supervision Act also provides for enhanced
coordination between the Commission and Board of Governors of the Federal Reserve System
(“FRB”) by allowing for regular on-site examinations and information sharing. 19 The Clearing
Supervision Act further provides that the Commission and CFTC shall coordinate with the FRB
to jointly develop risk management supervision programs for SIFMUs. 20 In addition, the
Clearing Supervision Act provides that the Commission and CFTC may each prescribe risk
management standards governing the operations related to payment, clearing, and settlement
activities of SIFMUs for which each is the supervisory agency, in consultation with the FSOC
execution facilities, national securities exchanges, national securities associations, alternative
trading systems, security-based swap data repositories, security-based swap execution facilities,
brokers, dealers, transfer agents, investment companies, and futures commission merchants. See
12 U.S.C. 5462(6)(B).
16

See 12 U.S.C. 5463. An FMU is systemically important if the failure of or a disruption to
the functioning of such FMU could create or increase the risk of significant liquidity or credit
problems spreading among financial institutions or markets and thereby threaten the stability of
the U.S. financial system. See 12 U.S.C. 5462(9). On July 18, 2012, the FSOC designated as
systemically important the following then-registered clearing agencies: CME Group (“CME”),
The Depository Trust Company (“DTC”), Fixed Income Clearing Corporation (“FICC”), ICE
Clear Credit (“ICC”), National Securities Clearing Corporation (“NSCC”), and The Options
Clearing Corporation (“OCC”).
17

See 12 U.S.C. 5465(e)(1)(A); 17 CFR 240.19b-4(n). The Commission published a final
rule concerning the filing of advance notices for designated clearing agencies in 2012. See
Exchange Act Release No. 34-67286 (June 28, 2012), 77 FR 41602 (July 13, 2012).
18

See 12 U.S.C. 5465(e).

19

See 12 U.S.C. 5466.

20

See 12 U.S.C. 5472; see also Risk Management Supervision of Designated Clearing
Entities (July 2011), https://www.federalreserve.gov/publications/other-reports/files/riskmanagement-supervision-report-201107.pdf (describing the joint supervisory framework of the
Commission, CFTC, and FRB).

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and FRB and taking into consideration relevant international standards and existing prudential
requirements. 21
iii.

Rule 17Ad-22

In 2012, the Commission adopted Rule 17Ad-22 under the Exchange Act to strengthen the
substantive regulation of clearing agencies, promote the safe and reliable operation of covered
clearing agencies, and improve efficiency, transparency, and access to covered clearing
agencies. 22 At that time, the Commission noted that the implementation of Rule 17Ad-22 would
be an important first step in developing the regulatory changes contemplated by Titles VII and
VIII of the Dodd-Frank Act. 23 In 2016, the Commission adopted Rule 17Ad-22(e), building on
the existing framework by establishing enhanced requirements for registered clearing agencies
that meet the definition of a “covered clearing agency.” 24 The Commission is now proposing to
amend the definition of “covered clearing agency” and certain other definitions under Rule
17Ad-22, so that it encompasses all registered clearing agencies performing the functions of a
central counterparty (“CCP”), central securities depository (“CSD”), or a securities settlement
system (“SSS”). 25
The Commission believes that the proposed amendment to the “covered clearing agency”
definition, which takes into account the specific functions performed by registered clearing
agencies, would lead to greater regulatory consistency among all registered clearing agencies
that perform these critical functions of a CCP, CSD, or SSS. Additionally, by focusing on these
functions, the proposed definition of “covered clearing agency” would ensure that all clearing
agencies performing these critical functions are subject to enhanced requirements that address
the particular services provided by and risks inherent in these critical functions.
The proposed amendments would change the number of respondents under Rule 17Ad-22(e),
and therefore the corresponding burdens and costs for paragraph (e), but would otherwise not
affect the information collection as described in previous supporting statements for this
information collection.
2. Purpose and Use of the Information Collection
As noted above, the proposed amendments would only affect the number of respondents under
Rule 17Ad-22(e), and therefore the proposed amendments would not change the purpose and use
21

See 12 U.S.C. 5464(a)(2).

22

See 17 CFR 240.17Ad-22; see also 2012 Adopting Release at 66225–26.

23

See 2012 Adopting Release at 66225–26.

24

See Standards for Covered Clearing Agencies, Final Rules; Exchange Act Release No.
78961 (Sept. 28, 2016), 81 Fr 70786 (Oct. 13, 2016) (“2016 Adopting Release”).
25

See Definition of Covered Clearing Agency, Proposed Rules; Exchange Act Release No.
78963 (Sept. 28, 2016), 81 FR 70744 (Oct. 13, 2016) (“2016 Proposing Release”).

5

of the information collection for Rule 17Ad-22 as described in previous PRA supporting
statements.
3. Consideration Given to Information Technology
As noted above, the proposed amendments would only affect the number of respondents under
Rule 17Ad-22(e), and therefore the use of information technology contemplated under this
information collection is unchanged. As a general matter, the collection of information
contemplated by Rule 17Ad-22 depends on the use of technologies and systems that a clearing
agency already maintains to conduct its business, including its risk management and
recordkeeping functions. Improvements to these technologies and systems may, over time,
reduce the burdens contemplated under Rule 17Ad-22.
4. Duplication
Rule 17Ad-22 does not duplicate information required to be collected by other Commission rules
or regulations.
5. Effect on Small Entities
For the purposes of Commission rulemaking and as applicable to Rule 17Ad-22, a small entity
includes, when used with reference to a clearing agency, a clearing agency that (i) compared,
cleared, and settled less than $500 million in securities transactions during the preceding fiscal
year, (ii) had less than $200 million of funds and securities in its custody or control at all times
during the preceding fiscal year (or at any time that it has been in business, if shorter), and (iii) is
not affiliated with any person (other than a natural person) that is not a small business or small
organization. 26
Based on the Commission’s existing information about the clearing agencies currently registered
with the Commission, the Commission believes that all such registered clearing agencies exceed
the thresholds defining “small entities” set out above. While other clearing agencies may emerge
and seek to register as clearing agencies with the Commission, the Commission does not believe
that any such entities would be “small entities” as defined in Exchange Act Rule 0-10.
6. Consequences of Not Conducting Collection
The Dodd-Frank Act enacted sweeping reforms in the financial system, including with respect to
FMUs such as clearing agencies. It also charged the Commission with significant duties to carry
out these reforms. The consequences of not conducting collections of information or any less
frequent collections of information pursuant to Rule 17Ad-22 would significantly impair the
Commission’s ability to carry out its statutory obligations under the Exchange Act as amended
by the Dodd-Frank Act.
7. Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)

26

See 17 CFR 240.0-10(d).

6

There are no special circumstances. This collection is consistent with the guidelines in 5 CFR
1320.5(d)(2).
8. Consultations Outside of the Agency
The Commission issued the 2016 Proposing Release to solicit comment on the amended
collection of information requirements and associated paperwork burdens. A copy of the release
is attached. 27
Comments on Commission releases are generally received from registrants, investors, and other
market participants. In addition, the Commission and staff participate in ongoing dialogue with
representatives of various market participants through public conferences, meetings, and
informal exchanges. Any comments received on this proposed rulemaking are posted on the
Commission’s public website, and made available through
http://www.sec.gov/rules/proposed.shtml. To date, the Commission has received seven
comments on the proposed amendments. None of the comments received have concerned the
Commission’s PRA analysis. The Commission will consider all comments received prior to
publishing the final rule, and will explain in any adopting release how the final rule responds to
such comments, in accordance with 5 C.F.R. 1320.11(f).
In addition, Section 712(a)(2) of the Dodd-Frank Act provides that, before commencing any
rulemaking regarding, among other things, clearing agencies for security-based swaps, the
Commission must consult and coordinate with the Commodity Futures Trading Commission
(“CFTC”) and other prudential regulators for the purposes of assuring regulatory consistency and
comparability, to the extent possible. The Commission staff and the CFTC staff have consulted
and coordinated with one another regarding their respective Commissions’ rules regarding
clearing agencies as mandated by the Dodd-Frank Act. The Commission staff has also consulted
and coordinated with the relevant prudential regulators, including FRB staff.
9. Payment or Gift
No payment or gift will be provided to any respondents.
10. Confidentiality
While the recordkeeping burdens under this information collection need not be submitted to the
Commission, the Commission may request that the records be provided, such as during an
inspection or examination of a respondent. When the Commission requests that records be
provided, a respondent can request confidential treatment pursuant to Section 24(b) of the
Exchange Act and 17 CFR 240.24b-2.
11. Sensitive Questions

27

Definition of Covered Clearing Agency, Proposed Rules; Exchange Act Release No.
78963 (Sept. 28, 2016), 81 FR 70744 (Oct. 13, 2016).

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Rule 17Ad-22 does not expressly require the collection of Personally Identifiable Information
(“PII”). While there may be instances when certain information (including, but not limited to, a
person’s name, email, phone number, or address) could be retained in response to one of the
collections of information, Commission staff cannot envision any circumstance in which a social
security number would be provided pursuant to any of the collections of information.
Furthermore, any information would not be collected or stored by the Commission, nor would it
be retrievable on a Commission system or database. As such, we believe that the treatment of
any PII with the collection of information associated with the proposed and adopted rules is not
likely to implicate the Federal Information Security Management Act of 2002 or the Privacy Act
of 1974.
12. Burden of Information Collection
As previously discussed, the proposed amendments would change the number of respondents
under Rule 17Ad-22(e), and therefore the corresponding burdens and costs for paragraph (e), but
otherwise not change the information collection for Rules 17Ad-22. Specifically, the number of
respondents for Rules 17Ad-22(b), (c), and (d) have not changed. The burden estimates for
Rules 17Ad-22(b), (c), 28 and (d) have only been changed because the initial three-year burden
period for these rules has elapsed, and therefore only the ongoing burdens remain. 29 In addition,

28

Additionally, Rule 17Ad-22(c)(1) requires four responses per year, one per quarter. The
prior PRA supporting statement indicated that the rule required only one response per year. The
burdens, however, have been calculated assuming four responses per year, so while the burdens
have not changed the number of responses per year has been corrected to indicate four responses.
29

The total burden per entity per year previously approved for Rule 17Ad-22(b)(1)–(3) was
19.67 hours, which included 9.67 hours of initial burden and 10 hours of ongoing burden.
Because the initial burden was calculated based upon an initial three-year burden period that
began in 2013 and has now run, those burdens have expired and the only remaining burden is the
ongoing burden. Accordingly, the total estimated industry burden is 90 hours.
The total burden per entity per year previously approved for Rule 17Ad-22(b)(4) was
163.33 hours, which included 103.33 hours of initial burden and 60 hours of ongoing burden.
Because the initial burden was calculated based upon an initial three-year burden period that
began in 2013 and has now run, those burdens have expired and the only remaining burden is the
ongoing burden. Accordingly, the total estimated industry burden is 540 hours.
The total burden per entity per year previously approved for Rule 17Ad-22(b)(5)–(7) was
130 hours, which included 70 hours of initial burden and 60 hours of ongoing burden. Because
the initial burden was calculated based upon an initial three-year burden period that began in
2013 and has now run, those burdens have expired and the only remaining burden is the ongoing
burden. Accordingly, the total estimated industry burden is 540 hours.
The total burden per entity per year previously approved for Rule 17Ad-22(c) was 160
hours, which included 100 hours of initial burden and 60 hours of ongoing burden. Because the

8

below is a summary of the burden estimates for Rule 17Ad-22(e), as modified by the proposed
amendments. Also below is the burden chart for Rules 17Ad-22(b), (c), and (d) reflecting the
end of the initial three-year burden period.
i.

Number of Respondents for Rule 17Ad-22(e)

In the 2016 Adopting Release, the Commission estimated that Rule 17Ad-22(e) would generally
apply to seven respondent clearing agencies, of which (i) six would be CCPs and one would be a
CSD and (ii) two would be security-based swap clearing agencies. The Commission then further
clarified that Rule 17Ad–22(e)(6) would only have six respondents because it only applies to
CCPs, Rule 17Ad–22(e)(11) would only have one respondent because it only applies to CSDs,
and Rule 17Ad–22(e)(14) would only have two respondents because it only applies to securitybased swap clearing agencies. 30
In the 2016 Proposing Release, the Commission preliminarily estimated that, under the proposed
amendment to the definition of “covered clearing agency,” a majority of the requirements under
Rule 17Ad-22(e) would have eight (rather than seven) respondents, of which (i) seven (rather
than six) would be CCPs and one would be a CSD and (ii) two would be security-based swap
clearing agencies. The Commission also noted that, under the proposal, Rule 17Ad-22(e)(6)
would have seven (rather than six) respondents because it applies to CCPs, Rule 17Ad-22(e)(11)
would continue to only have one respondent because it applies to CSDs, and Rule 17Ad22(e)(14) would continue to only have two respondents because it applies to security-based swap
clearing agencies.
initial burden was calculated based upon an initial three-year burden period that begin in 2013
and has now run, those burdens have expired and the only remaining burden is the ongoing
burden. Accordingly, the total estimated industry burden is 600 hours.
The total burden per entity per year previously approved for Rule 17Ad-22(c)(1) was 20
hours, which included 0 hours of initial burden and 5 hours of ongoing burden. Because the
initial burden was calculated based upon an initial three-year burden period that began in 2013
and has now run, those burdens have expired and the only remaining burden is the ongoing
burden. Accordingly, the total estimated industry burden is 180 hours.
The total burden per entity per year previously approved for Rule 17Ad-22(c)(2) was
416.67 hours, which included 166.67 hours of initial burden and 250 hours of ongoing burden.
Because the initial burden was calculated based upon an initial three-year burden period that
began in 2013 and has now run, those burdens have expired and the only remaining burden is the
ongoing burden. Accordingly, the total estimated industry burden is 2,500 hours.
The total burden per entity per year previously approved for Rule 17Ad-22(d)(1)–(15)
was 98.67 hours, which included 48.67 initial burden and 50 hours of ongoing burden. Because
the initial burden was calculated based upon an initial three-year burden period that begin in
2013 and has now run, those burdens have expired and the only remaining burden is the ongoing
burden. Accordingly, the total estimated industry burden is 200 hours.
30

See 2016 Adopting Release at 70890.

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ii.

Source of Estimates, Annual Hour Burden, and Explanation of Estimates
for Rule 17Ad-22(e)

The Commission preliminarily expects that the sources of estimates and annual hour burdens for
Rule 17Ad-22(e) would not change as a result of the proposed amendments. However, for the
purposes of this PRA supporting statement, the estimates below have been modified to reflect
that approximately one year of the initial three-year period remains and therefore one-third of the
initial burden estimate should be included in the burden estimates for the seven original
respondents estimated for Rule 17Ad-22(e).
Requirements in Rule 17Ad-22(e)(1) that Impose a PRA Burden
Rule 17Ad-22(e)(1) imposes a recordkeeping PRA burden and, under the proposed amendments,
would apply to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
Rule 17Ad-22(e)(1) continues to require policies and procedures that provide for a well-founded,
clear, transparent, and enforceable legal basis substantially the same as Rule 17Ad-22(d)(1). As
a result, the Commission continues to expect that a respondent has in place written rules, policies
and procedures substantially similar to those required by Rule 17Ad-22(e)(1) and, therefore, the
PRA burden imposed by the rule continues to be minimal and likely limited to reviewing and
updating current policies and procedures, where appropriate, to ensure compliance.
Based on similar policies and procedures requirements and the corresponding burden estimates
for Rule 17Ad-22(d)(1), the Commission continues to estimate that the rule imposes on each new
respondent an initial burden of 8 hours in the first year and an ongoing burden of 3 hours per
year (including the first year). 31 This results in an estimated initial burden of 2.67 hours per new
respondent when annualized over three years, 32 or a total annual burden of 5.67 hours per year
per new respondent. 33
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 0.89 hours remaining per
respondent when annualized over three years, 34 or a total annual burden of 3.89 hours per year
per each of these respondents. 35

31

These figures were calculated as follows: Assistant General Counsel for 2 hours +
Compliance Attorney for 6 hours = 8 hours of initial burden; Compliance Attorney for 3 hours =
3 hours of ongoing burden.
32

8 hours of initial burden ÷ 3 years = 2.67 hours per year.

33

2.67 hours + 3 hours of ongoing burden per year = 5.67 hours.

34

2.67 hours ÷ 3 years = 0.89 hours per year.

35

0.89 hours + 3 hours of ongoing burden = 3.89 hours.

10

Accordingly, the total estimated annual burden for the new respondent is 5.67 hours, 36 and the
total estimated annual burden for the seven original respondents is 27.23 hours. 37
Requirements in Rule 17Ad-22(e)(2) that Impose a PRA Burden
Rule 17Ad-22(e)(2) imposes a recordkeeping PRA burden and, under the proposed amendment,
would apply to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
Rule 17Ad-22(e)(2) continues to contain some provisions that are similar to Rule 17Ad-22(d)(8)
while adding requirements that do not appear in Rules 17Ad-22(b), (c) or (d). As a result, a
respondent clearing agency already had some written rules, policies, and procedures substantially
similar to those required by Rule 17Ad-22(e)(2) and would have needed to establish and
implement a limited number of new policies and procedures. The PRA burden therefore
continues to include reviewing current policies and procedures and updating those policies and
procedures or establishing new policies and procedures, where appropriate, to ensure compliance
with the rule.
Based on similar policies and procedures requirements and the corresponding burden estimates
previously made by the Commission for Rule 17Ad-22(d)(8), the Commission continues to
estimate that the rule imposes on each new respondent an initial burden of 25 hours in the first
year and an ongoing burden of 5 hours per year (including the first year). 38 This results in an
estimated initial burden of 8.33 hours per new respondent when annualized over three years, 39 or
a total annual burden of 13.33 hours per year per new respondent. 40
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 2.78 hours remaining per
respondent when annualized over three years, 41 or a total annual burden of 7.78 hours per year
per each of these respondents. 42

36

5.67 hours x 1 new respondent = 5.67 hours.

37

3.89 hours x 7 respondents = 27.23 hours.

38

These figures were calculated as follows: Assistant General Counsel for 14 hours +
Compliance Attorney for 11 hours = 25 hours of initial burden; Compliance Attorney for 5 hours
= 5 hours of ongoing burden.
39

25 hours of initial burden ÷ 3 years = 8.33 hours per year.

40

8.33 hours + 5 hours of ongoing burden per year = 13.33 hours.

41

8.33 hours ÷ 3 years = 2.78 hours per year.

42

2.78 hours + 5 hours of ongoing burden = 7.78 hours.

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Accordingly, the total estimated annual burden for the new respondent is 13.33 hours, 43 and the
total estimated annual burden for the seven original respondents is 54.44 hours. 44
Requirements in Rule 17Ad-22(e)(3) that Impose a PRA Burden
Rule 17Ad-22(e)(3) imposes a recordkeeping PRA burden and, under the proposed amendments,
would apply to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
Rule 17Ad-22(e)(3) continues to require policies and procedures that provide for a sound risk
management framework. Under Rule 17Ad-22(d), registered clearing agencies were already
required to have policies and procedures to manage certain risks, but this rule requires a
comprehensive framework for risk management that requires risk management policies and
procedures be designed holistically, be consistent with each other, and work effectively together.
Accordingly, the rule continues to impose a PRA burden that requires respondent clearing
agencies to update current policies and procedures in order to develop a more comprehensive
framework that includes a periodic review thereof and a plan for orderly recovery and winddown of the covered clearing agency.
The Commission continues to estimate that the rule imposes on each new respondent an initial
burden of 57 hours in the first year and an ongoing burden of 49 hours per year (including the
first year). 45 This results in an estimated initial burden of 19 hours per new respondent when
annualized over three years, 46 or a total annual burden of 68 hours per year per new
respondent. 47
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 6.33 hours remaining per

43

13.33 hours x 1 new respondent = 13.33 hours.

44

7.78 hours x 7 respondents = 54.44 hours.

45

These figures were calculated as follows: Assistant General Counsel for 25 hours +
Compliance Attorney for 18 hours + (Senior Risk Management Specialist for 7 hours +
Computer Operations Manager for 7 hours = 57 hours of initial burden; Compliance Attorney for
8 hours + Administrative Assistant for 3 hours + Senior Business Analyst for 5 hours + Risk
Management Specialist for 33 hours = 49 hours of ongoing burden.
46

57 hours of initial burden ÷ 3 years = 19 hours per year.

47

19 hours + 49 hours of ongoing burden per year = 68 hours.

12

respondent when annualized over three years, 48 or a total annual burden of 55.33 hours per year
per each of these respondents. 49
Accordingly, the total estimated annual burden for the new respondent is 68 hours, 50 and the
total estimated annual burden for the seven original respondents is 387.33 hours. 51
Requirements in Rule 17Ad-22(e)(4) that Impose a PRA Burden
Rule 17Ad-22(e)(4) imposes a recordkeeping PRA burden and, under the proposed amendments,
would apply to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
The Commission continues to estimate that the PRA burdens for Rule 17Ad-22(e)(4) are
significant, as changes to existing policies and procedures for the rule involve more than
adjustments and may require a respondent to make substantial changes. In addition, Rule 17Ad22(e)(4) requires one-time systems adjustments related to the capability to test the sufficiency of
financial resources and to perform an annual conforming model validation.
The Commission continues to estimate that the rule imposes on each new respondent an initial
burden of 219 hours in the first year and an ongoing burden of 62 hours per year (including the
first year). 52 This results in an estimated initial burden of 73 hours per new respondent when

48

19 hours ÷ 3 years = 6.33 hours per year.

49

6.33 hours + 49 hours of ongoing burden = 55.33 hours.

50

68 hours x 1 new respondent = 68 hours.

51

55.33 hours x 7 respondents = 387.33 hours.

52

These figures were calculated as follows: Assistant General Counsel for 74 hours +
Compliance Attorney for 45 hours + Senior Risk Management Specialist for 30 hours +
Computer Operations Manager for 45 hours + Chief Compliance Officer for 15 hours + Senior
Programmer for 10 hours = 219 hours of initial burden; Compliance Attorney for 26 hours +
Administrative Assistant for 3 hours + Senior Business Analyst for 3 hours + Risk Management
Specialist for 30 hours = 62 hours of ongoing burden.
52

These figures were calculated as follows: Assistant General Counsel for 74 hours +
Compliance Attorney for 45 hours + Senior Risk Management Specialist for 30 hours +
Computer Operations Manager for 45 hours + Chief Compliance Officer for 15 hours + Senior
Programmer for 10 hours = 219 hours of initial burden; Compliance Attorney for 26 hours +
Administrative Assistant for 3 hours + Senior Business Analyst for 3 hours + Risk Management
Specialist for 30 hours = 62 hours of ongoing burden.

13

annualized over three years, 53 or a total annual burden of 135 hours per year per new
respondent. 54
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only year of initial burden remaining. For these respondents, the rule would
impose on each respondent an estimated initial burden of 24.33 hours remaining per respondent
when annualized over three years, 55 or a total annual burden of 86.33 hours per year per each of
these respondents. 56
Accordingly, the total estimated annual burden for the new respondent is 135 hours, 57 and the
total estimated annual burden for the seven original respondents is 604.33 hours. 58
Requirements in Rule 17Ad-22(e)(5) that Impose a PRA Burden
Rule 17Ad-22(e)(5) imposes a recordkeeping PRA burden and, under the proposed amendments,
would apply to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
The Commission continues to expect that respondent clearing agencies subject to Rule 17Ad22(e)(5) would already have some written policies and procedures designed to address the
collateral risks borne by these entities. As a result, the Commission continues to believe that a
respondent clearing agency would have needed to review and update existing policies and
procedures as necessary and would have needed to adopt new policies and procedures with
respect to an annual review of the sufficiency of collateral haircuts and concentration limits.
Based on the similar policies and procedures requirements in and the Commission’s previous
corresponding burden estimates for Rule 17Ad-22(d)(3), the Commission continues to estimate
that the rule imposes on each new respondent an initial burden of 42 hours in the first year and
an ongoing burden of 36 hours per year (including the first year). 59 This results in an estimated

53

219 hours of initial burden ÷ 3 years = 73 hours per year.

54

73 hours + 62 hours of ongoing burden per year = 135 hours.

55

73 hours ÷ 3 years = 24.33 hours per year.

56

24.33 hours + 62 hours of ongoing burden = 86.33 hours.

57

135 hours x 1 new respondent = 135 hours.

58

86.33 hours x 7 new respondents = 604.33 hours.

59

These figures were calculated as follows: Assistant General Counsel for 16 hours +
Compliance Attorney for 12 hours + Senior Risk Management Specialist for 7 hours + Computer
Operations Manager for 7 hours = 42 hours of initial burden; Compliance Attorney for 6 hours +
Risk Management Specialist for 30 hours = 36 hours of ongoing burden.

14

initial burden of 14 hours per new respondent when annualized over three years, 60 or a total
annual burden of 50 hours per year per new respondent. 61
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 4.67 hours remaining per
respondent when annualized over three years, 62 or a total annual burden of 40.67 hours per year
per each of these respondents. 63
Accordingly, the total estimated annual burden for the new respondent is 50 hours, 64 and the
total estimated annual burden for the seven original respondents is 284.67 hours. 65
Requirements in Rule 17Ad-22(e)(6) that Impose a PRA Burden
Rule 17Ad-22(e)(6) imposes a recordkeeping PRA burden and, under the proposed amendments,
would apply to seven respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
The Commission continues to expect that the PRA burdens for Rule 17Ad-22(e)(6) are more
significant and would require a respondent clearing agency to make substantial changes to its
policies and procedures. In addition, Rule 17Ad-22(e)(6) continues to require one-time systems
adjustments related to the capability to perform daily backtesting and monthly (or more frequent
than monthly) sensitivity analyses.
The Commission continues to estimate that the rule imposes on each new respondent an initial
burden of 180 hours in the first year and an ongoing burden of 60 hours per year (including the
first year). 66 This results in an estimated initial burden of 60 hours per new respondent when

60

42 hours of initial burden ÷ 3 years = 14 hours per year.

61

14 hours + 36 hours of ongoing burden per year = 50 hours.

62

14 hours ÷ 3 years = 4.67 hours per year.

63

4.67 hours + 36 hours of ongoing burden = 40.67 hours.

64

50 hours x 1 new respondent = 50 hours.

65

40.67 hours x 7 respondents = 284.67 hours.

66

These figures were calculated as follows: Assistant General Counsel for 50 hours +
Compliance Attorney for 40 hours + Senior Risk Management Specialist for 25 hours +
Computer Operations Manager for 40 hours + Chief Compliance Officer for 15 hours + Senior
Programmer for 10 hours = 180 hours of initial burden; Compliance Attorney for 24 hours +
Administrative Assistant for 3 hours + Senior Business Analyst for 3 hours + Risk Management
Specialist for 30 hours = 60 hours of ongoing burden.

15

annualized over three years, 67 or a total annual burden of 120 hours per year per new
respondent. 68
The six original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 20 hours remaining per
respondent when annualized over three years, 69 or a total annual burden of 80 hours per year per
each of these respondents. 70
Accordingly, the total estimated annual burden for the new respondent is 120 hours, 71 and the
total estimated annual burden for the six original respondents is 480 hours. 72
Requirements in Rule 17Ad-22(e)(7) that Impose a PRA Burden
Rule 17Ad-22(e)(7) imposes a recordkeeping PRA burden and, under the proposed amendments,
would appliy to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
The Commission continues to expect that the PRA burdens for Rule 17Ad-22(e)(7) are more
significant and would require a respondent clearing agency to make substantial changes to its
policies and procedures. In addition, Rule 17Ad-22(e)(7) continues to require one-time systems
adjustments related to the capability to perform an annual conforming model validation, the
testing of sufficiency of liquid resources and the testing of access to liquidity providers.
The Commission continues to estimate that the rule imposes on each new respondent an initial
burden of 330 hours in the first year and an ongoing burden of 128 hours per year (including the
first year). 73 This results in an estimated initial burden of 110 hours per new respondent when

67

180 hours of initial burden ÷ 3 years = 60 hours.

68

60 hours + 60 hours of ongoing burden per year = 120 hours.

69

60 hours ÷ 3 years = 20 hours per year.

70

20 hours + 60 hours of ongoing burden = 80 hours.

71

120 hours x 1 new respondent = 120 hours.

72

80 hours x 6 respondents = 480 hours.

73

These figures were calculated as follows: Assistant General Counsel for 95 hours +
Compliance Attorney for 85 hours + Senior Risk Management Specialist for 45 hours +
Computer Operations Manager for 60 hours + Chief Compliance Officer for 30 hours + Senior
Programmer for 15 hours = 330 hours of initial burden; Compliance Attorney for 48 hours +
Administrative Assistant for 5 hours + Senior Business Analyst for 5 hours + Risk Management
Specialist for 60 hours + Senior Risk Management Specialist for 10 hours = 128 hours of
ongoing burden.

16

annualized over three years, 74 or a total annual burden of 238 hours per year per new
respondent. 75
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 36.67 hours remaining per
respondent when annualized over three years, 76 or a total annual burden of 164.67 hours per year
per each of these respondents. 77
Accordingly, the total estimated annual burden for the new respondent is 238 hours, 78 and the
total estimated annual burden for the seven original respondents is 1,152.67 hours. 79
Requirements in Rule 17Ad-22(e)(8) that Impose a PRA Burden
Rule 17Ad-22(e)(8) imposes a recordkeeping PRA burden and, under the proposed amendments,
would apply to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
Rule 17Ad-22(e)(8) continues to contain substantially similar provisions to Rule 17Ad22(d)(12). As a result, the Commission continues to expect that a respondent clearing agency
would already have written rules, policies, and procedures substantially similar to those required
by Rule 17Ad-22(e)(8). The Commission continues to believe that respondent clearing agencies
would incur only the incremental burdens of reviewing and updating existing policies and
procedures as necessary.
Based on the similar policies and procedures requirements and the corresponding burden
estimates previously made by the Commission for Rule 17Ad-22(d)(12), the Commission
continues to estimate that the rule imposes on each new respondent an initial burden of 12 hours
in the first year and an ongoing burden of 5 hours per year (including the first year). 80 This

74

330 hours of initial burden ÷ 3 years = 110 hours per year.

75

110 hours + 128 hours of ongoing burden per year = 238 hours.

76

110 hours ÷ 3 years = 36.67 hours per year.

77

36.67 hours + 128 hours of ongoing burden = 164.67 hours.

78

238 hours x 1 new respondent = 238 hours.

79

164.67 hours x 7 respondents = 1,152.67 hours.

80

These figures were calculated as follows: Assistant General Counsel for 2 hours +
Compliance Attorney for 6 hours + Senior Business Analyst for 2 hours + Computer Operations
Manager for 2 hours = 12 hours of initial burden; Compliance Attorney for 5 hours = 5 hours of
ongoing burden.

17

results in an estimated initial burden of 4 hours per new respondent when annualized over three
years, 81 or a total annual burden of 9 hours per year per new respondent. 82
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 1.33 hours remaining per
respondent when annualized over three years, 83 or a total annual burden of 6.33 hours per year
per each of these respondents. 84
Accordingly, the total estimated annual burden for the new respondent is 9 hours, 85 and the total
estimated annual burden for the seven original respondents is 44.33 hours. 86
Requirements in Rule 17Ad-22(e)(9) that Impose a PRA Burden
Rule 17Ad-22(e)(9) imposes a recordkeeping PRA burden and, under the proposed amendments,
would apply to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
Rule 17Ad-22(e)(9) continues to contain substantially similar provisions to Rule 17Ad-22(d)(5).
As a result, the Commission continues to expect that a respondent clearing agency already has
written rules, policies, and procedures substantially similar to those required by Rule 17Ad229(e)(9). Therefore, the Commission continues to believe that respondent clearing agencies
would incur incremental burdens of reviewing and updating existing policies and procedures as
necessary.
Based on the similar policies and procedures requirements and the corresponding burden
estimates previously made by the Commission for Rule 17Ad-22(d)(5), the Commission
continues to estimate that the rule imposes on each new respondent an initial burden of 12 hours
in the first year and an ongoing burden of 5 hours per year (including the first year). 87 This

81

12 hours in the first year ÷3 years = 4 hours per year.

82

4 hours + 5 hours of ongoing burden per year = 9 hours.

83

4 hours ÷ 3 years = 1.33 hours per year.

84

1.33 hours + 5 hours of ongoing burden = 6.33 hours.

85

9 hours x 1 new respondent = 9 hours.

86

6.33 hours x 7 respondents = 44.33 hours.

87

These figures were calculated as follows: Assistant General Counsel for 2 hours +
Compliance Attorney for 6 hours + Senior Business Analyst for 2 hours + Computer Operations
Manager for 2 hours = 12 hours of initial burden; Compliance Attorney for 5 hours = 5 hours of
ongoing burden.

18

results in an estimated initial burden of 4 hours per new respondent when annualized over three
years, 88 or a total annual burden of 9 hours per year per new respondent. 89
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 1.33 hours remaining per
respondent when annualized over three years, 90 or a total annual burden of 6.33 hours per year
per each of these respondents. 91
Accordingly, the total estimated annual burden for the new respondent is 9 hours, 92 and the total
estimated annual burden for the seven original respondents is 44.33 hours. 93
Requirements in Rule 17Ad-22(e)(10) that Impose a PRA Burden
Rule 17Ad-22(e)(10) imposes a recordkeeping PRA burden and, under the proposed
amendments, would apply to eight respondent clearing agencies. The Commission continues to
estimate that the rule requires one response per entity annually.
Rule 17Ad-22(e)(10) continues to contain substantially similar provisions to Rule 17Ad22(d)(15). As a result, the Commission continues to expect that a respondent clearing agency
would already have written rules, policies, and procedures substantially similar to those required
by Rule 17Ad-22(e)(10). The Commission continues to believe that a respondent clearing
agency would incur the incremental burdens of reviewing and updating existing policies and
procedures as necessary.
Based on the similar policies and procedures requirements and the corresponding burden
estimates previously made by the Commission for Rule 17Ad-22(d)(15), the Commission
continues to estimate that the rule imposes on each new respondent an initial burden of 12 hours
in the first year and an ongoing burden of 5 hours per year (including the first year). 94 This

88

12 hours in the first year ÷3 years = 4 hours per year.

89

4 hours + 5 hours of ongoing burden per year = 9 hours.

90

4 hours ÷ 3 years = 1.33 hours per year.

91

1.33 hours + 5 hours of ongoing burden = 6.33 hours.

92

9 hours x 1 new respondent = 9 hours.

93

6.33 hours x 7 respondents = 44.33 hours.

94

These figures were calculated as follows: Assistant General Counsel for 2 hours +
Compliance Attorney for 6 hours + Senior Business Analyst for 2 hours + Computer Operations
Manager for 2 hours = 12 hours of initial burden; Compliance Attorney for 5 hours = 5 hours of
ongoing burden.

19

results in an estimated initial burden of 4 hours per new respondent when annualized over three
years, 95 or a total annual burden of 9 hours per year per new respondent. 96
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 1.33 hours remaining per
respondent when annualized over three years, 97 or a total annual burden of 6.33 hours per year
per each of these respondents. 98
Accordingly, the total estimated annual burden for the new respondent is 9 hours, 99 and the total
estimated annual burden for the seven original respondents is 44.33 hours. 100
Requirements in Rule 17Ad-22(e)(11) that Impose a PRA Burden
Rule 17Ad-22(e)(11) imposes a recordkeeping PRA burden and, under the proposed
amendments, would continue to apply to one respondent clearing agency. The Commission
continues to estimate that the rule requires one response per entity annually.
Rule 17Ad-22(e)(11) continues to contain similar provisions to Rule 17Ad-22(d)(10). As a
result, the Commission continues to expect that a respondent clearing agency providing CSD
services would already have written rules, policies, and procedures similar to those required by
Rule 17Ad-22(e)(11). Rule 17Ad-22(e)(10) also continues to impose requirements that do not
appear in Rule 17Ad-22(d)(10). Accordingly, the Commission continues to expect that a
covered clearing agency providing CSD services may need to update or amend existing policies
and procedures, as necessary, to satisfy the requirements and may also need to create new
policies and procedures.
Based on the similar policies and procedures requirements and the corresponding burden
estimates previously made by the Commission for Rule 17Ad-22(d)(10), the Commission
continues to estimate that the rule imposes on each new respondent an initial burden of 55 hours
in the first year and an ongoing burden of 8 hours per year (including the first year). 101 This
95

12 hours in the first year ÷3 years = 4 hours per year.

96

4 hours + 5 hours of ongoing burden per year = 9 hours.

97

4 hours ÷ 3 years = 1.33 hours per year.

98

1.33 hours + 5 hours of ongoing burden = 6.33 hours.

99

9 hours x 1 new respondent = 9 hours.

100

6.33 hours x 7 respondents = 44.33 hours.

101

These figures were calculated as follows: Assistant General Counsel for 20 hours +
Compliance Attorney for 10 hours + Intermediate Accountant for 15 hours + Senior Business
Analyst for 5 hours + Computer Operations Manager for 5 hours = 55 hours of initial burden;
Compliance Attorney for 8 hours = 8 hours of ongoing burden.

20

results in an estimated initial burden of 18.33 hours per new respondent when annualized over
three years, 102 or a total annual burden of 26.33 hours per year per new respondent. 103
The only respondent, however, is approximately two years into the initial three-year burden
period, so it has only one year of initial burden remaining. Accordingly, the rule would continue
to impose on this respondent an estimated initial burden of 6.11 hours remaining when
annualized over three years, 104 or a total annual burden of 14.11 hours per year. 105
Requirements in Rule 17Ad-22(e)(12) that Impose a PRA Burden
Rule 17Ad-22(e)(12) imposes a recordkeeping PRA burden and, under the proposed
amendments, would apply to eight respondent clearing agencies. The Commission continues to
estimate that the rule requires one response per entity annually.
Rule 17Ad-22(e)(12) continues to contain substantially similar provisions to Rule 17Ad22(d)(13). As a result, the Commission continues to expect that a respondent clearing agency
would already have written rules, policies, and procedures substantially similar to those required
by Rule 17Ad-22(e)(12). The Commission continues to believe that a respondent clearing
agency would incur the incremental burdens of reviewing and updating existing policies and
procedures as necessary.
Based on the similar policies and procedures requirements and the corresponding burden
estimates previously made by the Commission for Rule 17Ad-22(d)(13), the Commission
continues to estimate that the rule imposes on each new respondent an initial burden of 12 hours
in the first year and an ongoing burden of 5 hours per year (including the first year). 106 This
results in an estimated initial burden of 4 hours per new respondent when annualized over three
years, 107 or a total annual burden of 9 hours per year per new respondent. 108
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule

102

55 hours of initial burden ÷ 3 years = 18.33 hours per year.

103

18.33 hours + 8 hours of ongoing burden per year = 26.33 hours.

104

18.33 hours ÷ 3 years = 6.11 hours per year.

105

6.11 hours + 8 hours of ongoing burden = 14.11 hours.

106

These figures were calculated as follows: Assistant General Counsel for 2 hours +
Compliance Attorney for 6 hours + Senior Business Analyst for 2 hours + Computer Operations
Manager for 2 hours = 12 hours of initial burden; Compliance Attorney for 5 hours = 5 hours of
ongoing burden.
107

12 hours in the first year ÷3 years = 4 hours per year.

108

4 hours + 5 hours of ongoing burden per year = 9 hours.

21

would impose on each respondent an estimated initial burden of 1.33 hours remaining per
respondent when annualized over three years, 109 or a total annual burden of 6.33 hours per year
per each of these respondents. 110
Accordingly, the total estimated annual burden for the new respondent is 9 hours, 111 and the total
estimated annual burden for the seven original respondents is 44.33 hours. 112
Requirements in Rule 17Ad-22(e)(13) that Impose a PRA Burden
Rule 17Ad-22(e)(13) imposes a recordkeeping PRA burden and, under the proposed
amendments, would apply to eight respondent clearing agencies. The Commission continues to
estimate that the rule requires one response per entity annually.
Rule 17Ad-22(e)(13) continues to contain similar provisions to Rule 17Ad-22(d)(11) but would
also impose additional requirements that do not appear in Rule 17Ad-22(d)(11). As a result, the
Commission continues to believe that a respondent clearing agency would incur burdens of
reviewing and updating existing policies and procedures in order to comply with the provisions
of Rule 17Ad-22(e)(13) and, in some cases, would need to create new policies and procedures.
Based on the similar policies and procedures requirements and the corresponding burden
estimates previously made by the Commission for Rule 17Ad-22(d)(11), the Commission
continues to estimate that the rule imposes on each new respondent an initial burden of 41 hours
in the first year and an ongoing burden of 7 hours per year (including the first year). 113 This
results in an estimated initial burden of 13.67 hours per new respondent when annualized over
three years, 114 or a total annual burden of 20.67 hours per year per new respondent. 115
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 4.56 hours remaining per

109

4 hours ÷ 3 years = 1.33 hours per year.

110

1.33 hours + 5 hours of ongoing burden = 6.33 hours.

111

9 hours x 1 new respondent = 9 hours.

112

6.33 hours x 7 respondents = 44.33 hours.

113

These figures were calculated as follows: Assistant General Counsel for 6 hours +
Compliance Attorney for 11 hours + Senior Business Analyst for 12 hours + Computer
Operations Manager for 12 hours = 41 hours of initial burden; Compliance Attorney for 7 hours
= 7 hours of ongoing burden.
114

41 hours of initial burden ÷ 3 years = 13.67 hours per year.

115

13.67 hours + 7 hours of ongoing burden per year = 20.67 hours per year.

22

respondent when annualized over three years, 116 or a total annual burden of 11.56 hours per year
per each of these respondents. 117
Accordingly, the total estimated annual burden for the new respondent is 20.67 hours, 118 and the
total estimated annual burden for the seven original respondents is 80.9 hours. 119
Requirements in Rule 17Ad-22(e)(14) that Impose a PRA Burden
Rule 17Ad-22(e)(14) imposes a recordkeeping PRA burden and, under the proposed amendment,
would continue to apply to two respondent clearing agencies. The Commission continues to
estimate that the rule requires one response per entity annually.
Though not required by Rules 17Ad-22(b), (c), or (d), respondent clearing agencies that provide
CCP services for security-based swaps generally have written policies and procedures regarding
the segregation and portability of customer positions and collateral as a result of other
regulations. 120 Consequently, the Commission continues to expect that respondent clearing
agencies providing CCP services for security-based swaps would incur the burdens of reviewing
and updating existing policies and procedures as necessary in order to comply with Rule 17Ad22(e)(14).
The Commission continues to estimate that the rule imposes on each respondent an initial burden
of 36 hours in the first year and an ongoing burden of 6 hours per year (including the first
year). 121 This results in an estimated initial burden of 12 hours per new respondent when
annualized over three years, 122 or a total annual burden of 18 hours per year per new
respondent. 123

116

13.67 hours ÷ 3 years = 4.56 hours per year.

117

4.56 hours + 7 hours of ongoing burden = 11.56 hours.

118

20.67 hours x 1 new respondent = 20.67 hours.

119

11.56 hours x 7 respondents = 80.9 hours.

120

See, e.g., 77 FR 6336 (Feb. 7, 2012) (CFTC adopting rules imposing a legal separation
with operational commingling (“LSOC”) model on DCOs for cleared swaps).
121

These figures were calculated as follows: Assistant General Counsel for 12 hours +
Compliance Attorney for 10 hours + Computer Operations Manager for 7 hours + Senior
Business Analyst for 7 hours = 36 hours of initial burden; Compliance Attorney for 6 hours = 6
hours of ongoing burden.
122

36 hours of initial burden ÷ 3 years = 12 hours per year.

123

12 hours + 6 hours of ongoing burden per year = 18 hours.

23

The two original respondents, however, are approximately two years into the initial three-year
burden period, so they have only one year of initial burden remaining. For these respondents, the
rule would impose on each respondent an estimated initial burden of 4 hours remaining per
respondent when annualized over three years, 124 or a total annual burden of 10 hours per year per
each of these respondents. 125
Accordingly, the total estimated annual burden for the two original respondents is 20 hours. 126
Requirements in Rule 17Ad-22(e)(15) that Impose a PRA Burden
Rule 17Ad-22(e)(15) imposes a recordkeeping PRA burden and, under the proposed amendment,
would apply to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
Rule 17Ad-22(e)(15) continues to require policies and procedures that identify and manage
general business risks borne by the clearing agency. Policies and procedures governing the
identification and mitigation of general business risk were not required under Rule 17Ad-22(b),
(c), or (d), and, as a result, the Commission continues to believe that the estimated PRA burdens
associated with Rule 17Ad-22(e)(15) were significant and would require a respondent clearing
agency to make substantial changes to its policies and procedures.
The Commission continues to estimate that the rule imposes on each new respondent an initial
burden of 210 hours in the first year and an ongoing burden of 48 hours per year (including the
first year). 127 This results in an estimated initial burden of 70 hours per respondent when
annualized over three years, 128 or a total annual burden of 118 hours per year per new
respondent. 129
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 23.3 hours remaining per

124

12 hours ÷ 3 years = 4 hours per year.

125

4 hours + 6 hours of ongoing burden = 10 hours.

126

10 hours x 2 respondents = 20 hours.

127

These figures were calculated as follows: Assistant General Counsel for 40 hours +
Compliance Attorney for 30 hours + Computer Operations Manager for 10 hours + Senior
Business Analyst for 10 hours + Financial Analyst for 70 hours + Chief Financial Officer for 50
hours = 210 hours of initial burden; Compliance Attorney for 42 hours + Administrative
Assistant for 3 hours + Senior Business Analyst for 3 hours = 48 hours of ongoing burden.
128

210 hours of initial burden ÷ 3 years = 70 hours per year.

129

70 hours + 48 hours of ongoing burden per year = 118 hours per year.

24

respondent when annualized over three years, 130 or a total annual burden of 71.33 hours per year
per each of these respondents. 131
Accordingly, the total estimated annual burden for the new respondent is 118 hours, 132 and the
total estimated annual burden for the seven original respondents is 499.33 hours. 133
Requirements in Rule 17Ad-22(e)(16) that Impose a PRA Burden
Rule 17Ad-22(e)(16) imposes a recordkeeping PRA burden and, under the proposed
amendments, would apply to eight respondent clearing agencies. The Commission continues to
estimate that the rule requires one response per entity annually.
Respondent clearing agencies were already required to have written policies and procedures
reasonably designed to address the safeguarding of the assets of the clearing agency and its
participants. As a result, the Commission continues to expect that a respondent clearing agency
would need to conduct a review of, and update as necessary, current policies and procedures in
order to ensure compliance with the rule.
Based on similar policies and procedures requirements and the corresponding burden estimates
previously made by the Commission for Rule 17Ad-22(d)(3), the Commission continues to
estimate that the rule imposes on each new respondent an initial burden of 20 hours in the first
year and an ongoing burden of 6 hours per year (including the first year). 134 This results in an
estimated initial burden of 6.67 hours per new respondent when annualized over three years, 135
or a total annual burden of 12.67 hours per year per new respondent. 136
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 2.22 hours remaining per

130

70 hours ÷ 3 years = 23.3 hours per year.

131

23.3 hours + 48 hours of ongoing burden = 71.33 hours.

132

118 hours x 1 new respondent = 118 hours.

133

71.33 hours x 7 respondents = 499.33 hours.

134

These figures were calculated as follows: Assistant General Counsel for 4 hours +
Compliance Attorney for 8 hours + Senior Business Analyst for 4 hours + Computer Operations
Manager for 4 hours = 20 hours of initial burden; Compliance Attorney for 6 hours = 6 hours of
ongoing burden.
135

20 hours of initial burden ÷ 3 years = 6.67 hours per year.

136

6.67 hours + 6 hours of ongoing burden per year = 12.67 hours per year.

25

respondent when annualized over three years, 137 or a total annual burden of 8.22 hours per year
per each of these respondents. 138
Accordingly, the total estimated annual burden for the new respondent is 12.67 hours, 139 and the
total estimated annual burden for the seven original respondents is 57.56 hours. 140
Requirements in Rule 17Ad-22(e)(17) that Impose a PRA Burden
Rule 17Ad-22(e)(17) imposes a recordkeeping PRA burden and, under the proposed amendment,
would apply to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
Rule 17Ad-22(e)(17) continues to contain similar requirements to those in Rule 17Ad-22(d)(4)
but would also impose additional requirements that do not appear in Rule 17Ad-22(d)(4). As a
result, the Commission continues to expect that a respondent clearing agency would already have
some written rules, policies, and procedures required by the rule, but it would also need to
review and update existing policies and procedures, where necessary, and would need to create
policies and procedures to address the additional requirements.
Based on the similar policies and procedures requirements and the corresponding burden
estimates previously made by the Commission for Rule 17Ad-22(d)(4), the Commission
continues to estimate that the rule imposes on each new respondent an initial burden of 28 hours
in the first year and an ongoing burden of 6 hours per year (including the first year). 141 This
results in an initial estimated burden of 9.33 hours per new respondent when annualized over
three years, 142 or a total burden of 15.33 hours per year per new respondent. 143
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 3.11 hours remaining per

137

6.67 hours ÷ 3 years = 2.22 hours per year.

138

2.22 hours + 6 hours of ongoing burden = 8.22 hours.

139

12.67 hours x 1 new respondent = 12.67 hours.

140

8.22 hours x 7 respondents = 57.56 hours.

141

These figures were calculated as follows: Assistant General Counsel for 4 hours +
Compliance Attorney for 8 hours + Computer Operations Manager for 6 hours + Senior Business
Analyst for 4 hours + Chief Compliance Officer for 4 hours + Senior Programmer for 2 hours =
28 hours of initial burden; Compliance Attorney for 6 hours = 6 hours of ongoing burden.
142

28 hours of initial burden ÷ 3 years = 9.33 hours per year.

143

9.33 hours + 6 hours of ongoing burden per year = 15.33 hours per year.

26

respondent when annualized over three years, 144 or a total annual burden of 9.11 hours per year
per each of these respondents. 145
Accordingly, the total estimated annual burden for the new respondent is 15.33 hours, 146 and the
total estimated annual burden for the seven original respondents is 63.77 hours. 147
Requirements in Rule 17Ad-22(e)(18) that Impose a PRA Burden
Rule 17Ad-22(e)(18) imposes a recordkeeping PRA burden and, under the proposed amendment,
would apply to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
Rule 17Ad-22(e)(18) continues to contain similar requirements to those in Rules 17Ad-22(b)(5)
through (7) and (d)(2). As a result, the Commission continues to expect that a respondent
clearing agency would already have written rules, policies, and procedures containing provisions
similar to those required by the rule. Rule 17Ad-22(e)(18) also continues to impose additional
requirements that do not appear in Rules 17Ad-22(b) or (d), however, necessitating the creation
of new policies and procedures to address these additional requirements.
Based on the similar policies and procedures requirements and the corresponding burden
estimates previously made by the Commission for Rules 17Ad-22(b)(5) through (7) and (d)(2),
the Commission continues to estimate that the rule imposes on each new respondent an initial
burden of 44 hours in the first year and an ongoing burden of 7 hours per year (including the first
year). 148 This results in an initial estimated burden of 14.67 hours per new respondent when
annualized over three years, 149 or a total annual burden of 21.67 hours per year per new
respondent. 150
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule

144

9.33 hours ÷ 3 years = 3.11 hours per year.

145

3.11 hours + 6 hours of ongoing burden = 9.11 hours.

146

15.33 hours x 1 new respondent = 15.33 hours.

147

9.11 hours x 7 respondents = 63.77 hours.

148

These figures were calculated as follows: Assistant General Counsel for 10 hours +
Compliance Attorney for 7 hours + Computer Operations Manager for 15 hours + Senior
Business Analyst for 5 hours + Chief Compliance Officer for 5 hours + Senior Programmer for 2
hours = 44 hours of initial burden; Compliance Attorney for 7 hours = 7 hours of ongoing
burden.
149

44 hours of initial burden ÷ 3 years = 14.67 hours per year.

150

14.67 hours + 7 hours of ongoing burden per year = 21.67 hours per year.

27

would impose on each respondent an estimated initial burden of 4.89 hours remaining per
respondent when annualized over three years, 151 or a total annual burden of 11.89 hours per year
per each of these respondents. 152
Accordingly, the total estimated annual burden for the new respondent is 21.67 hours, 153 and the
total estimated annual burden for the seven original respondents is 83.23 hours. 154
Requirements in Rule 17Ad-22(e)(19) that Impose a PRA Burden
Rule 17Ad-22(e)(19) imposes a recordkeeping PRA burden and, under the proposed amendment,
would apply to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
Rule 17Ad-22(e)(19) continues to include requirements that have not been previously included in
Rules 17Ad-22(b), (c) or (d), and therefore the Commission continues to expect that a respondent
clearing agency would need to create new policies and procedures to address the requirements of
Rule 17Ad-22(e)(19).
The Commission estimates that the rule imposes on each new respondent an initial burden of 44
hours in the first year and an ongoing burden of 7 hours per year (including the first year). 155
This results in an initial estimated burden of 14.67 hours per new respondent when annualized
over three years, 156 or a total annual burden of 21.67 hours per year per new respondent. 157
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 4.89 hours remaining per

151

14.67 hours ÷ 3 years = 4.89 hours per year.

152

4.89 hours + 7 hours of ongoing burden = 11.89 hours.

153

21.67 hours x 1 new respondent = 21.67 hours.

154

11.89 hours x 7 respondents = 83.23 hours.

155

These figures were calculated as follows: Assistant General Counsel for 10 hours +
Compliance Attorney for 7 hours + Computer Operations Manager for 15 hours + Senior
Business Analyst for 5 hours + Chief Compliance Officer for 5 hours + Senior Programmer for 2
hours = 44 hours of initial burden; Compliance Attorney for 7 hours = 7 hours of ongoing
burden.
156

44 hours of initial burden ÷ 3 years = 14.67 hours per year.

157

14.67 hours + 7 hours of ongoing burden per year = 21.67 hours per year.

28

respondent when annualized over three years, 158 or a total annual burden of 11.89 hours per year
per each of these respondents. 159
Accordingly, the total estimated annual burden for the new respondent is 21.67 hours, 160 and the
total estimated annual burden for the seven original respondents is 83.23 hours. 161
Requirements in Rule 17Ad-22(e)(20) that Impose a PRA Burden
Rule 17Ad-22(e)(20) imposes a recordkeeping PRA burden and, under the proposed amendment,
would apply to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
Under Rule 17Ad-22(d)(7), registered clearing agencies were already required to have written
policies and procedures similar to the requirements of Rule 17Ad-22(e)(20). As a result, the
Commission continues to expect that a respondent clearing agency would need to review and
update existing policies and procedures, as necessary, to satisfy the requirements of Rule 17Ad22(e)(20).
Based on the similar policies and procedures requirements and the corresponding burden
estimates previously made by the Commission for Rule 17Ad-22(d)(7), the Commission
continues to estimate that the rule imposes on each new respondent an initial burden of 44 hours
in the first year and an ongoing burden of 7 hours per year (including the first year). 162 This
results in an initial estimated burden of 14.67 hours per new respondent when annualized over
three years, 163 or a total annual burden of 21.67 hours per year per new respondent. 164
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 4.89 hours remaining per

158

14.67 hours ÷ 3 years = 4.89 hours per year.

159

4.89 hours + 7 hours of ongoing burden = 11.89 hours.

160

21.67 hours x 1 new respondent = 21.67 hours.

161

11.89 hours x 7 respondents = 83.23 hours.

162

These figures were calculated as follows: Assistant General Counsel for 10 hours +
Compliance Attorney for 7 hours + Computer Operations Manager for 15 hours + Senior
Business Analyst for 5 hours + Chief Compliance Officer for 5 hours + Senior Programmer for 2
hours = 44 hours of initial burden; Compliance Attorney for 7 hours = 7 hours of ongoing
burden.
163

44 hours of initial burden ÷ 3 years = 14.67 hours per year.

164

14.67 hours + 7 hours of ongoing burden per year = 21.67 hours per year.

29

respondent when annualized over three years, 165 or a total annual burden of 11.89 hours per year
per each of these respondents. 166
Accordingly, the total estimated annual burden for the new respondent is 21.67 hours, 167 and the
total estimated annual burden for the seven original respondents is 83.23 hours. 168
Requirements in Rule 17Ad-22(e)(21) that Impose a PRA Burden
Rule 17Ad-22(e)(21) imposes a recordkeeping PRA burden and, under the proposed amendment,
would apply to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
Rule 17Ad-22(e)(21) continues to contain requirements similar to those in Rule 17Ad-22(d)(6)
but also imposes new requirements. As a result, the Commission continues to expect that a
respondent clearing agency is likely to incur the burdens of reviewing and updating existing
policies and procedures and would need to create new policies and procedures to satisfy the rule,
as necessary.
Based on the similar policies and procedures requirements and the corresponding burden
estimates previously made by the Commission for Rule 17Ad-22(d)(6), the Commission
continues to estimate that the rule imposes on each new respondent an initial burden of 32 hours
in the first year and an ongoing burden of 11 hours per year (including the first year). 169 This
results in an estimated burden of 10.67 hours per new respondent when annualized over three
years, 170 or a total annual burden of 21.67 hours per year per new respondent. 171
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 3.56 hours remaining per

165

14.67 hours ÷ 3 years = 4.89 hours per year.

166

4.89 hours + 7 hours of ongoing burden = 11.89 hours.

167

21.67 hours x 1 new respondent = 21.67 hours.

168

11.89 hours x 7 respondents = 83.23 hours.

169

These figures were calculated as follows: Assistant General Counsel for 10 hours +
Compliance Attorney for 7 hours + Computer Operations Manager for 15 hours + Senior
Business Analyst for 5 hours + Chief Compliance Officer for 5 hours + Senior Programmer for 2
hours = 32 hours of initial burden; Compliance Attorney for 11 hours = 11 hours of ongoing
burden.

170

32 hours of initial burden ÷ 3 years = 10.67 hours per year.

171

10.67 hours + 11hours of ongoing burden = 21.67 hours per year.

30

respondent when annualized over three years, 172 or a total annual burden of 14.56 hours per year
per each of these respondents. 173
Accordingly, the total estimated annual burden for the new respondent is 21.67 hours, 174 and the
total estimated annual burden for the seven original respondents is 101.9 hours. 175
Requirements in Rule 17Ad-22(e)(22) that Impose a PRA Burden
Rule 17Ad-22(e)(22) imposes a recordkeeping PRA burden and, under the proposed amendment,
would apply to eight respondent clearing agencies. The Commission continues to estimate that
the rule requires one response per entity annually.
Rule 17Ad-22(e)(22) continues to require a respondent clearing agency to have written policies
and procedures regarding the use of relevant internationally accepted communication procedures
and standards. While respondent clearing agencies are not subject to similar requirements under
Rules 17Ad-22(b), (c) or (d), the Commission understands that respondent clearing agencies
already use the relevant internationally accepted communication procedures and standards and
continues to expect a respondent clearing agency would need to make only limited changes to
satisfy the requirements under the Rule 17Ad-22(e)(22).
The Commission continues to estimate that the rule imposes on each new respondent an initial
burden of 24 hours in the first year and an ongoing burden of 5 hours per year (including the first
year). 176 This results in an estimated initial burden of 8 hours per new respondent when
annualized over three years, 177 or a total annual burden of 13 hours per year per new
respondent. 178
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 2.67 hours remaining per

172

10.67 hours ÷ 3 years = 3.56 hours per year.

173

3.56 hours + 11 hours of ongoing burden = 14.56 hours.

174

21.67 hours x 1 new respondent = 21.67 hours.

175

14.56 hours x 7 respondents = 101.9 hours.

176

These figures were calculated as follows: Assistant General Counsel for 2 hours +
Compliance Attorney for 6 hours + Computer Operations Manager for 7 hours + Senior Business
Analyst for 2 hours + Chief Compliance Officer for 5 hours + Senior Programmer for 2 hours =
24 hours of initial burden; Compliance Attorney for 5 hours = 5 hours of ongoing burden.
177

24 hours of initial burden ÷ 3 years = 8 hours per year.

178

8 hours + 5 hours of ongoing burden per year = 13 hours per year.

31

respondent when annualized over three years, 179 or a total annual burden of 7.67 hours per year
per each of these respondents. 180
Accordingly, the total estimated annual burden for the new respondent is 13 hours, 181 and the
total estimated annual burden for the seven original respondents is 53.67 hours. 182
Requirements in Rule 17Ad-22(e)(23) that Impose a PRA Burden
Rule 17Ad-22(e)(23) imposes a third-party reporting PRA burden and, under the proposed
amendment, would apply to eight respondent clearing agencies. The Commission continues to
estimate that the rule requires one response per entity annually.
Rule 17Ad-22(e)(23) continues to contain similar requirements to Rule 17Ad-22(d)(9) but also
continues to impose substantial new requirements. As a result, although a respondent clearing
agency has been required to have written rules, policies and procedures containing provisions
similar to some of the requirements in Rule 17Ad-22(e)(23), a respondent clearing agency would
also need to establish new policies and procedures to address additional requirements.
Based on the similar policies and procedures requirements and the corresponding burden
estimates previously made by the Commission for Rule 17Ad-22(d)(9), the Commission
continues to estimate that the rule imposes on each new respondent an initial burden of 138 hours
in the first year and an ongoing burden of 34 hours per year (including the first year). 183 This
results in an estimated initial burden of 46 hours per new respondent when annualized over three
years, 184 or a total annual burden of 80 hours per year per new respondent. 185
The seven original respondents are approximately two years into the initial three-year burden
period, so they have only one year of initial burden remaining. For these respondents, the rule
would impose on each respondent an estimated initial burden of 15.33 hours remaining per

179

8 hours ÷ 3 years = 2.67 hours per year.

180

2.67 hours + 5 hours of ongoing burden = 7.67 hours.

181

13 hours x 1 new respondent = 13 hours.

182

7.67 hours x 7 respondents = 53.67 hours.

183

These figures were calculated as follows: Assistant General Counsel for 38 hours +
Compliance Attorney for 24 hours + Computer Operations Manager for 32 hours + Senior
Business Analyst for 18 hours + Chief Compliance Officer for 18 hours + Senior Programmer
for 8 hours = 138 hours of initial burden; Compliance Attorney for 34 hours = 34 hours of
ongoing burden.
184

138 hours of initial burden ÷ 3 years = 46 hours per year.

185

46 hours + 34 hours of ongoing burden per year = 80 hours.

32

respondent when annualized over three years, 186 or a total annual burden of 49.33 hours per year
per each of these respondents. 187
Accordingly, the total estimated annual burden for the new respondent is 80 hours, 188 and the
total estimated annual burden for the seven original respondents is 345.33 hours. 189
iii.

Table Summary of Hourly Burdens for Rule 17Ad-22(e)

The table below summarizes the Commission’s estimates of the total hourly reporting burden for
all respondents under Rules 17Ad-22(e)(1)–(23).

Name of
Informatio
n
Collection

Type of
Burden

17Ad22(e)(1)
17Ad22(e)(1)
17Ad22(e)(2)
17Ad22(e)(2)
17Ad22(e)(3)
17Ad22(e)(3)
17Ad22(e)(4)
17Ad22(e)(4)

Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping

17Ad-

Recordkee

Initial
Ongoin
Initial Burden
Annual
Numbe
g
Burden Annual
Burden Total
r of
Annual
Burden
Total
Per
ized
Per
Annual
Entitie Respon
Per
Industr
Entity
per
Entity Burde
s
ses Per
Entity
y
Per
Entity
Per
n Per
Impact Entity
Per
Burden
Respon
Per
Respon Entity
ed
Respon
se
Respon
se
se
se

Small
Busine
ss
Entitie
s
Affecte
d

1

1

8

2.67

3

5.67

5.67

5.67

0

7

1

2.67

0.89

3

3.89

3.89

27.23

0

1

1

25

8.33

5

13.33

13.33

13.33

0

7

1

8.33

2.78

5

7.78

7.78

54.44

0

1

1

57

19

49

68

68

68

0

7

1

19

6.33

49

55.33

55.33

387.33

0

1

1

219

73

62

135

135

135

0

7

1

73

24.33

62

86.33

86.33

604.33

0

1

1

42

14

36

50

50

50

0

186

46 hours ÷ 3 years = 15.33 hours per year.

187

15.33 hours + 34 hours of ongoing burden = 49.33 hours.

188

80 hours x 1 new respondent = 80 hours.

189

49.33 hours x 7 respondents = 345.33 hours.

33

Name of
Informatio
n
Collection

Type of
Burden

22(e)(5)

ping

17Ad22(e)(5)
17Ad22(e)(6)
17Ad22(e)(6)
17Ad22(e)(7)
17Ad22(e)(7)
17Ad22(e)(8)
17Ad22(e)(8)
17Ad22(e)(9)
17Ad22(e)(9)
17Ad22(e)(10)
17Ad22(e)(10)
17Ad22(e)(11)
17Ad22(e)(12)
17Ad22(e)(12)
17Ad22(e)(13)
17Ad22(e)(13)
17Ad22(e)(14)

Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping

17Ad-

Recordkee

Initial
Ongoin
Initial Burden
Annual
Numbe
g
Burden Annual
Burden Total
r of
Annual
Burden
Total
Per
ized
Per
Annual
Entitie Respon
Per
Industr
Entity
per
Entity Burde
s
ses Per
Entity
y
Per
Entity
Per
n Per
Impact Entity
Per
Burden
Respon
Per
Respon Entity
ed
Respon
se
Respon
se
se
se

Small
Busine
ss
Entitie
s
Affecte
d

7

1

14

4.67

36

40.67

40.67

284.67

0

1

1

180

60

60

120

120

120

0

6

1

60

20

60

80

80

480

0

1

1

330

110

128

238

238

238

0

7

1

110

36.67

128

164.67

164.67

1152.67

0

1

1

12

4

5

9

9

9

0

7

1

4

1.33

5

6.33

6.33

44.33

0

1

1

12

4

5

9

9

9

0

7

1

4

1.33

5

6.33

6.33

44.33

0

1

1

12

4

5

9

9

9

0

7

1

4

1.33

5

6.33

6.33

44.33

0

1

1

18.33

6.11

8

14.11

14.11

14.11

0

1

1

12

4

5

9

9

9

0

7

1

4

1.33

5

6.33

6.33

44.33

0

1

1

41

13.67

7

20.67

20.67

20.67

0

7

1

13.67

4.56

7

11.56

11.56

80.9

0

2

1

12

4

6

10

10

20

0

1

1

210

70

48

118

118

118

0

34

Name of
Informatio
n
Collection

Type of
Burden

22(e)(15)

ping

17Ad22(e)(15)
17Ad22(e)(16)
17Ad22(e)(16)
17Ad22(e)(17)
17Ad22(e)(17)
17Ad22(e)(18)
17Ad22(e)(18)
17Ad22(e)(19)
17Ad22(e)(19)
17Ad22(e)(20)
17Ad22(e)(20)
17Ad22(e)(21)
17Ad22(e)(21)
17Ad22(e)(22)
17Ad22(e)(22)
17Ad22(e)(23)
17Ad22(e)(23)

Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping

Initial
Ongoin
Initial Burden
Annual
Numbe
g
Burden Annual
Burden Total
r of
Annual
Burden
Total
Per
ized
Per
Annual
Entitie Respon
Per
Industr
Entity
per
Entity Burde
s
ses Per
Entity
y
Per
Entity
Per
n Per
Impact Entity
Per
Burden
Respon
Per
Respon Entity
ed
Respon
se
Respon
se
se
se

Small
Busine
ss
Entitie
s
Affecte
d

7

1

70

23.3

48

71.33

71.33

499.33

0

1

1

20

6.67

6

12.67

12.67

12.67

0

7

1

6.67

2.22

6

8.22

8.22

57.56

0

1

1

28

9.33

6

15.33

15.33

15.33

0

7

1

9.33

3.11

6

9.11

9.11

63.77

0

1

1

44

14.67

7

21.67

21.67

21.67

0

7

1

14.67

4.89

7

11.89

11.89

83.23

0

1

1

44

14.67

7

21.67

21.67

21.67

0

7

1

14.67

4.89

7

11.89

11.89

83.23

0

1

1

44

14.67

7

21.67

21.67

21.67

0

7

1

14.67

4.89

7

11.89

11.89

83.23

0

1

1

32

10.67

11

21.67

21.67

21.67

0

7

1

10.67

3.56

11

14.56

14.56

101.9

0

1

1

24

8

5

13

13

13

0

7

1

8

2.67

5

7.67

7.67

53.67

0

Third-Party

1

1

138

46

34

80

80

80

0

Third-Party

7

1

46

15.33

34

49.33

49.33

345.33

0

Total Burden Hours for All Respondents
35

5,666.6

iv.

Table Summary of Hourly Burdens for Rules 17Ad-22(b), (c), and (d)

The table below summarizes the Commission’s estimates of the total hourly reporting burden for
all respondents under Rules 17Ad-22(b), (c) and (d). As noted above, the table reflects that the
initial three-year burden period has passed and, therefore, no initial burdens remain.

Name of
Information
Collection

17Ad22(b)(1)–(3)
17Ad22(b)(4)
17Ad22(b)(5)–(7)
17Ad-22(c)
17Ad22(c)(1)
17Ad22(c)(2)
17Ad22(d)(1)–
(15)

Type of
Burden

Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
Recordkee
ping
ThirdParty
Recordkee
ping

Initial
Burde Ongoin
Initial
Annual
Numbe
n
g
Burde
Burde
Total
r of
Annual
Annual Burde
n Per
n Per Annual
Entitie Respon
ized
n Per
Entity
Entity Burde
s
ses Per
per
Entity
Per
Per
n Per
Impact Entity
Entity
Per
Respon
Respon Entity
ed
Per
Respon
se
se
Respon
se
se

Total
Indust
ry
Burde
n

Small
Busine
ss
Entitie
s
Affecte
d

9

1

0

0

10

10

10

90

0

9

1

0

0

60

60

60

540

0

9

1

0

0

60

60

60

540

0

10

1

0

0

60

60

60

600

0

9

4

0

0

5

5

20

180

0

10

1

0

0

250

250

250

2,500

0

4

1

0

0

50

50

50

200

0

Total Burden for All Respondents

4,650

13. Costs to Respondents
Because the proposed amendments would add one respondent under Rule 17Ad-22(e), Rules
17Ad-22(e)(4) and (7) would have eight, rather than seven, respondents.
Rules 17Ad-22(e)(4) and (7) include requirements for covered clearing agencies to have policies
and procedures reasonably designed to test and validate models related to measuring financial
risks. Based on its supervisory experience and discussions with industry participants, the
Commission expected that covered clearing agencies may choose to hire external consultants for
the purposes of performing ongoing model validation required under Rules 17Ad-22(e)(4) and
(e)(7). If each covered clearing agency chose to hire external consultants, the Commission

36

estimates that the ongoing cost associated with hiring such consultants is $322,080 per
respondent. 190 The total estimated burden associated with Rules 17Ad-22(e)(4) and (7) would
therefore be $ 2,254,560 per rule, 191 as reflected in the chart below.
In addition, the costs to respondents under Rules 17Ad-22(b) and (c) remain unchanged, as
reflected in the chart below.
Table of Total Costs for Covered Clearing Agencies (costs in thousands of dollars)

Name of
Informati
on
Collection

Type of
Burden

17Ad22(e)(4)
17Ad22(e)(7)

Recordkee
ping
Recordkee
ping

Numb Annua
er of
l
Entitie Respo
s
nses
Impac
Per
ted
Entity

Initial
Cost
Per
Entity
Per
Respo
nse

Initial
Cost
Annua
lized
per
Entity
Per
Respo
nse

Ongoi
ng
Cost
Per
Entity
Per
Respo
nse

Annua
l Cost Total
Per
Annua
Entity l Cost
Per
Per
Respo Entity
nse

8

1

0

0

322.08

322.08

322.08

8

1

0

0

322.08

322.08

322.08

Total
Indust
ry
Cost

Small
Busine
ss
Entitie
s
Affect
ed

2,576.
64
2,576.
64

Total Cost for All Respondents (in thousands of dollars)

0
0

5,153.28

Table of Costs for Registered Clearing Agencies (costs in thousands of dollars)
Name of
Informati
on
Collection

Type of
Burden

Numb Annua
er of
l
Entitie Respo
s
nses
Impac
Per
ted
Entity

Initial
Cost
Per
Entity
Per
Respo
nse

Initial
Cost
Annua
lized
per
Entity
Per

Ongoi
ng
Cost
Per
Entity
Per
Respo

Annua
l Cost Total
Per
Annua
Entity l Cost
Per
Per
Respo Entity
nse

Total
Indust
ry
Cost

190

Small
Busine
ss
Entitie
s
Affect
ed

This figure was calculated as follows: 2 Consultants for 40 hours per week at $671 per
hour = $53,680 x 12 weeks = $644,160 per respondent ÷ 2 (Rules 17Ad-22(e)(4) and (e)(7)) =
$322,080. The $671 per hour figure for a consultant was calculated using www.payscale.com,
modified by Commission staff to account for an 1800-hour work-year and multiplied by 5.35 to
account for bonuses, firm size, employee benefits, and overhead. For the purposes of estimating
a PRA cost on a per-rule basis, we have divided the total cost for Rules 17Ad-22(e)(4) and (e)(7)
evenly between the two rules.
191

This figure was calculated as follows: $322,080 annual cost per entity x 8 respondents =
$2,576,640 total industry cost.

37

17Ad22(b)(4)
17Ad22(c)(2)

Recordkee
ping
ThirdParty

Respo
nse

nse

9

1

0

0

432

432

432

3,888

0

10

1

0

0

500

500

500

5,000

0

Total Cost for All Respondents (in thousands of dollars)

8,888

14. Cost to Federal Government
No cost to the federal government is anticipated.
15. Changes in Burden
As previously discussed, the Commission would expect a change in the number of respondents
for Rule 17Ad-22(e) if the proposed amendments were adopted, and therefore the corresponding
burdens and costs for paragraph (e), but otherwise not change the information collection for
Rules 17Ad-22. Specifically, in the 2016 Proposing Release, the Commission preliminarily
estimated that, under the proposed amendment to the definition of “covered clearing agency,” a
majority of the requirements under Rule 17Ad-22(e) would have eight (rather than seven)
respondents, of which (i) seven (rather than six) would be CCPs and one would be a CSD and
(ii) two would be security-based swap clearing agencies. The Commission also noted that, under
the proposal, Rule 17Ad-22(e)(6) would have seven (rather than six) respondents because it
applies to CCPs, Rule 17Ad-22(e)(11) would continue to only have one respondent because it
applies to CSDs, and Rule 17Ad-22(e)(14) would continue to only have two respondents because
it applies to security-based swap clearing agencies.
Separately, also as previously discussed, the number of respondents for Rules 17Ad-22(b), (c),
and (d) has not changed but, because the initial three-year burden period for these rules has
elapsed, the burden estimates for these rules have been reduced to reflect that only the ongoing
burdens remain. 192 The Commission anticipates no other changes in burden under Rule 17Ad-22
as a result of the proposed amendments.
16. Information Collection Planned for Statistical Purposes
This is not an information collection planned for statistical purposes.
17. OMB Expiration Date Display Approval

192

See supra note 29 (explaining the remaining burdens for Rules 17Ad-22(b), (c), and (d)).

38

The Commission is not seeking approval to not display the OMB approval expiration date.
18. Exceptions to Certification for Paperwork Reduction Act Submissions
This collection complies with the requirements in 5 CFR 1320.9.
B.

COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS

This collection of information does not involve statistical methods.

39