[Federal Register Volume 75, Number 210 (Monday, November 1, 2010)]
[Notices]
[Pages 67150-67152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-27468]
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SECURITIES AND EXCHANGE COMMISSION
Proposed Collection; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Filings and Information Services, Washington, DC
20549.
Extension:
Rule 301 and Forms ATS and ATS-R; SEC File No. 270-451; OMB
Control No. 3235-0509.
Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the collection of
information summarized below. The Commission plans to submit this
existing collection of information to the Office of Management and
Budget for extension and approval.
Regulation ATS provides a regulatory structure for alternative
trading systems. Regulation ATS allows an alternative trading system to
choose between registering as a broker-dealer and complying with
Regulation ATS, or registering as a national securities exchange.
Regulation ATS provides the regulatory framework for those alternative
trading systems that choose to be regulated as broker-dealers. Rule 301
of Regulation ATS contains certain notice and reporting requirements,
as well as additional obligations that apply only to alternative
trading systems with significant volume. Rule 301 describes the
conditions with which an alternative trading system must comply to be
registered as a broker-dealer. The
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Rule requires all alternative trading systems that wish to comply with
Regulation ATS to file an initial operation report on Form ATS. The
initial operation report requires information regarding operation of
the system including the method of operation, access criteria and the
types of securities traded. Alternative trading systems are also
required to supply updates on Form ATS to the Commission, describing
material changes to the system, and quarterly transaction reports on
Form ATS-R. Alternative trading systems are also required to file
cessation of operations reports on Form ATS.
An alternative trading system with significant volume is required
to comply with requirements for fair access and systems capacity,
integrity and security. Under Rule 301, such alternative trading system
is also required to establish standards for granting access to trading
on its system. In addition, upon a decision to deny or limit an
investor's access to the system, an alternative trading system is
required to provide notice to a user of the denial or limitation and
its right to an appeal to the Commission. Regulation ATS requires
alternative trading systems to preserve any records made in the process
of complying with the systems' capacity, integrity and security
requirements. In addition, such alternative trading systems are
required to notify Commission staff of material systems outages and
significant systems changes.
The Commission uses the information provided pursuant to the Rule
to monitor the growth and development of alternative trading systems,
and to monitor whether the systems promote fair and orderly securities
markets and operate in a manner that is consistent with the federal
securities laws. In particular, the information collected and reported
to the Commission by alternative trading systems enables the Commission
to evaluate the operation of alternative trading systems with regard to
national market system goals, and monitor the competitive effects of
these systems to ascertain whether the regulatory framework remains
appropriate to the operation of such systems. Without the information
provided on Forms ATS and ATS-R, the Commission would not have readily
available information on a regular basis in a format that would allow
it to determine whether such systems have adequate safeguards.
Respondents consist of alternative trading systems that choose to
register as broker-dealers and comply with the requirements of
Regulation ATS. The Commission estimates that there are currently
approximately 80 respondents.
An estimated 80 respondents will file an average total of 552
responses per year, which corresponds to an estimated aggregated annual
response burden of 1,792.5 hours (comprised of 1,356 hours professional
labor and 436.5 hours para-professional labor). At an average cost per
burden hour of approximately $316 for professional labor and $59 for
para-professional labor, with an additional 35% of labor costs added to
account for overhead costs such as printing, copying, and postage, the
resultant total related cost of compliance for these respondents is
$613,236.82 per year ((1,356 professional burden hours multiplied by
$316) plus (436.5 para-professional burden hours multiplied by $59)
equals $454,249.50; plus 35% for overhead costs ($158,987.32) equals
$613,236.82; figures may vary slightly due to arithmetic rounding).
An estimated 5 respondents will commence operations as an ATS each
year, necessitating the filing of an initial operation report on Form
ATS. The Commission estimates that the average compliance burden for
each respondent would be 20 hours, comprising 13 hours of in-house
professional work and 7 hours of clerical work. Thus, the total
compliance burden per year is 100 hours (5 responses x 20 hours = 100
hours). The total cost of compliance for the annual burden is $22,605
($316 x 13 hours per response + $59 x 7 hours per response = $4,521 per
response; $4,521 x 5 responses = $22,605). In addition, estimated
overhead costs for printing, copying, and postage equal to 35% of the
value of labor costs amount to $1,582.35 per respondent ($4,521 times
35%). Thus, the Commission estimates the total annualized cost burden
would be $7,911.75 ($1,582.35 x 5 respondents).
An estimated 80 respondents will file an estimated two periodic
amendments to their initial operation report on Form ATS each year, an
estimated total of 160 responses. The Commission estimates that the
average compliance burden for each response would be 2 hours,
comprising 1.5 hours of in-house professional work and 0.5 hours of
clerical work. Thus, the total compliance burden per year is 320 hours
(160 responses x 2 hours = 320 hours). The total cost of compliance for
the annual burden is $1,007 ($316 x 1.5 hours per response + $59 x 0.5
hours per response = $503.50 per response; $503.50 x 160 responses =
$80,560). In addition, estimated overhead costs for printing, copying,
and postage equal to 35% of the value of labor costs amount to $176.23
per response ($503.50 times 35%). Thus, the Commission estimates the
annualized cost burden for each respondent would be $352.46 ($176.23 x
2 responses per respondent) and the total annualized cost burden for
all respondents would be $28,196.80 ($176.23 x 80 respondents x 2
responses per respondent).
An estimated 80 respondents will file four quarterly reports on
Form ATS-R each year for an estimated total of 320 responses. The
Commission estimates that that the average compliance burden for each
response would be 4 hours, comprising 3 hours of in-house professional
work and 1 hour of clerical work. Thus, the total compliance burden per
year is 1,280 hours (320 responses x 4 hours = 1,280 hours). The total
cost of compliance for the annual burden is $322,240 ($316 x 3 hours
per response + $59 x 1 hours per response = $1,007 per response; $1,007
x 320 responses = $322,240). In addition, estimated overhead costs for
printing, copying, and postage equal to 35% of the value of labor costs
amount to $352.45 per response ($1,007 times 35%). Thus, the Commission
estimates the annualized cost burden for each respondent would be
$1409.80 ($352.45 x 4 responses per respondent) and the total
annualized cost burden for all respondents would be $112,784 ($352.45 x
80 respondents x 4 responses per respondent).
An estimated three respondents will be required to file a cessation
of operations report on Form ATS each year. The Commission estimates
that the average compliance burden for each response would be 2 hours,
comprising 1.5 hours of in-house professional work and 0.5 hours of
clerical work. Thus, the total compliance burden per year is 6 hours (3
responses x 2 hours = 6 hours). The total cost of compliance for the
annual burden is $1,510.50 ($316 x 1.5 hours per response + $59 x 0.5
hours per response = $503.50 per response; $503.50 x 3 responses =
$1,510.50). In addition, estimated overhead costs for printing,
copying, and postage equal to 35% of the value of labor costs amount to
$176.23 per respondent ($503.5 x 35%). Thus, the Commission estimates
the total annualized cost burden would be $528.69 ($176.23 x 3
respondents).
An estimated two respondents will meet certain volume thresholds
requiring them to establish standards for granting access on its
trading system. The Commission estimates that the average compliance
burden for each response would be 5 hours of in-house professional work
at $316 per hour. Thus, the total compliance burden per year is 10
hours (2 responses x 5 hours
[[Page 67152]]
= 10 hours). The total cost of compliance for the annual burden is
$3,160 ($316 x 5 hours per response x 2 responses = $3,160). In
addition, estimated overhead costs for printing, copying, and postage
equal to 35% of the value of labor costs amount to $553 per response
($1,580 x 35%). Thus, the Commission estimates the total annualized
cost burden would be $1,106 ($553 x 2 respondents).
An estimated two respondents will meet certain volume thresholds
requiring them to provide notice to any user upon any decision to deny
or limit that user's access to the system, and these notice obligations
will be triggered an estimated 27 x per year for each respondent. The
Commission estimates that the average compliance burden for each
response would be 1 hour of in-house professional work at $316 per
hour. Thus, the total compliance burden per year is 54 hours (2
respondents x 27 responses each x 1 hour = 54 hours). The total cost of
compliance for the annual burden is $17,064 ($316 x 1 hour per response
x 54 responses = $17,064). In addition, estimated overhead costs for
printing, copying, and postage equal to 35% of the value of labor costs
amount to $110.60 per response ($316 x 35%). Thus, the Commission
estimates the annualized cost burden for each respondent would be
$2986.20 ($110.60 x 27 responses per respondent) and the total
annualized cost burden for all respondents would be $5972.40 ($110.60 x
2 respondents x 27 responses per respondent).
An estimated two respondents will meet certain volume thresholds
requiring them to keep records relating to any steps taken to comply
with systems capacity, integrity, and security requirements under Rule
301. The Commission estimates that the average compliance burden for
each response would be 10 hours of in-house professional work at $316
per hour. Thus, the total compliance burden per year is 20 hours (2
respondents x 10 hours = 20 hours). The total cost of compliance for
the annual burden is $6,320 ($316 x 20 hours = $6,320). In addition,
estimated overhead costs for printing, copying, and postage equal to
35% of the value of labor costs amount to $1,106 per response ($3,160 x
35%). Thus, the Commission estimates the total annualized cost burden
would be $2,212 ($1,106 x 2 respondents).
An estimated two respondents will meet certain volume thresholds
requiring them to provide a notice to the Commission to report any
systems outages, and these notice obligations will be triggered an
estimated 5 times per year for each respondent. The Commission
estimates that the average compliance burden for each response would be
.25 hours of in-house professional work at $316 per hour. Thus, the
total compliance burden per year is 2.5 hours (2 respondents x 5
responses each x .25 hours = 2.5 hours). The total cost of compliance
for the annual burden is $790 ($316 x .25 hours per response x 10
responses = $790). In addition, estimated overhead costs for printing,
copying, and postage equal to 35% of the value of labor costs amount to
$27.65 per response ($79 x 35%). Thus, the Commission estimates the
annualized cost burden for each respondent would be $138.25 ($27.65 x 5
responses per respondent) and the total annualized cost burden for all
respondents would be $276.50 ($27.65 x 2 respondents x 5 responses per
respondent).
Written comments are invited on (a) Whether the proposed collection
of information is necessary for the proper performance of the functions
of the agency, including whether the information shall have practical
utility; (b) the accuracy of the agency's estimate of the burden of the
proposed collection of information; (c) ways to enhance the quality,
utility, and clarity of the information collected; and (d) ways to
minimize the burden of the collection of information on respondents,
including through the use of automated collection techniques or other
forms of information technology. Consideration will be given to
comments and suggestions submitted in writing within 60 days of this
publication.
Please direct your written comments to: Jeffrey Heslop, Acting
Chief Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 6432 General Green Way, Alexandria, Virginia 22312 or
send an e-mail to: [email protected].
Dated: October 25,2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-27468 Filed 10-29-10; 8:45 am]
BILLING CODE 8011-01-P