[Federal Register Volume 75, Number 43 (Friday, March 5, 2010)]
[Notices]
[Pages 10330-10331]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-4660]
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SECURITIES AND EXCHANGE COMMISSION
Proposed Extension of Existing Collection; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0123.
Extension:
Rule 605 of Regulation NMS; SEC File No 270-488; OMB Control No.
3235-0542; Rule 606 of Regulation NMS; SEC File No. 270-489; OMB
Control No. 3235-0541.
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 existing
collections of information summarized below.
Rule 605 of Regulation NMS (``Rule 605'') (17 CFR 242.605),\1\
formerly known as Rule 11Ac1-5, requires market centers to make
available to the public monthly order execution reports in electronic
form. The Commission believes that many market centers retain most, if
not all, the underlying raw data necessary to generate these reports in
electronic format. Once the necessary
[[Page 10331]]
data is collected, market centers could either program their systems to
generate the statistics and reports, or transfer the data to a service
provider (such as an independent company in the business of preparing
such reports or a self-regulatory organization (``SRO'') that would
generate the statistics and reports.
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\1\ Regulation NMS, adopted by the Commission in June 2005,
redesignated the national market system rules previously adopted
under Section 11A of the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.) (``Exchange Act''). Rule 11Ac1-5 under the Exchange Act
was redesignated Rule 605 of Regulation NMS, and Rule 11Ac1-6 under
the Exchange Act was redesignated Rule 606 of Regulation NMS. No
substantive amendments were made to Rule 605 and Rule 606 of
Regulation NMS. See Securities Exchange Act Release No. 51808 (June
9, 2005), 70 FR 37496 (June 29, 2005).
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The collection of information obligations of Rule 605 apply to all
market centers that receive covered orders in national market system
securities. The Commission estimates that approximately 408 market
centers are subject to the collection of information obligations of
Rule 605. Each of these respondents is required to respond to the
collection of information on a monthly basis.
The Commission staff estimates that, on average, Rule 605 causes
respondents to spend 6 hours per month in additional time to collect
the data necessary to generate the reports, or 72 hours per year. With
an estimated 408 market centers subject to Rule 605, the total data
collection cost to comply with the monthly reporting requirement is
estimated to be 29,376 hours per year.
Rule 606 of Regulation NMS (``Rule 606'') (17 CFR 242.606),
formerly known as Rule 11Ac1-6, requires broker-dealers to prepare and
disseminate quarterly order routing reports. Much of the information
needed to generate these reports already should be collected by broker-
dealers in connection with their periodic evaluations of their order
routing practices. Broker-dealers must conduct such evaluations to
fulfill the duty of best execution that they owe their customers.
The collection of information obligations of Rule 606 apply to
broker-dealers that route non-directed customer orders in covered
securities. The Commission estimates that out of the currently 5178
broker-dealers that are subject to the collection of information
obligations of Rule 606, clearing brokers bear a substantial portion of
the burden of complying with the reporting and recordkeeping
requirements of Rule 606 on behalf of small to mid-sized introducing
firms. There currently are approximately 527 clearing brokers. In
addition, there are approximately 2426 introducing brokers that receive
funds or securities from their customers. Because at least some of
these firms also may have greater involvement in determining where
customer orders are routed for execution, they have been included,
along with clearing brokers, in estimating the total burden of Rule
606.
The Commission staff estimates that each firm significantly
involved in order routing practices incurs an average burden of 40
hours to prepare and disseminate a quarterly report required by Rule
606, or a burden of 160 hours per year. With an estimated 2953 \2\
broker-dealers significantly involved in order routing practices, the
total burden per year to comply with the quarterly reporting
requirement in Rule 606 is estimated to be 472,480 hours.
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\2\ 527 clearing brokers + 2426 introducing brokers = 2953.
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Rule 606 also requires broker-dealers to respond to individual
customer requests for information on orders handled by the broker-
dealer for that customer. Clearing brokers generally bear the burden of
responding to these requests. The Commission staff estimates that an
average clearing broker incurs an annual burden of 400 hours (2000
responses x 0.2 hours/response) to prepare, disseminate, and retain
responses to customers required by Rule 606. With an estimated 527
clearing brokers subject to Rule 606, the total burden per year to
comply with the customer response requirement in Rule 606 is estimated
to be 210,800 hours.
Written comments are invited on: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission, including whether the information will
have practical utility; (b) the accuracy of the Commission's estimate
of the burden of the collection of information; (c) ways to enhance the
quality, utility, and clarity of the information collected; and (d)
ways to minimize the burden of the collection of information on
respondents, including through the use of automated collection
techniques or other forms of information technology. Consideration will
be given to comments and suggestions submitted in writing within 60
days of this publication.
Comments should be directed to Charles Boucher, Director/Chief
Information Officer, Securities and Exchange Commission, c/c Shirley
Martinson, 6432 General Green Way, Alexandria, Virginia 22312 or send
an e-mail to: [email protected].
Dated: March 1, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-4660 Filed 3-4-10; 8:45 am]
BILLING CODE 8011-01-P