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Rule 12a-5, Form 26, SEC File No. 270-85, OMB Control No. 3235-0079
Rule 12f-1, SEC File No. 270-139, OMB Control No. 3235-0128
Rule 12f-3, SEC File No. 270-141, OMB Control No. 3235-0249
Rule 15Ajensp;1, Forms X-15AJ-1 and X-15AJ-2 SEC File No. 270-25, OMB Control No. 3235-0044
Rule 15c2-1 SEC File No. 270-418, OMB Control No. 3235-0485
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”) has submitted to the Office of Management and Budget requests for extension of the previously approved collections of information discussed below.
Rule 12a-5 of the Securities Exchange Act of 1934 (the “Act”) generally makes it unlawful for any security to be traded on a national securities exchange unless such security is registered on the exchange in accordance with the Start Printed Page 3502provisions of the Act and the rules and regulations thereunder.
Rule 12a-5 under the Act and Form 26 were adopted by the Commission in 1936 and 1955, respectively, pursuant to Sections 3(a)(12), 10(b), and 23(a) of the Act. Subject to certain conditions, Rule 12a-5 affords a temporary exemption (generally for up to 120 days) from the registration requirements of Section 12(a) of the Act for a new security when the holders of a security admitted to trading on a national securities exchange obtain the right (by operation of law or otherwise) to acquire all or any part of a class of another or substitute security of the same or another issuer, or an additional amount of the original security. The purpose of the exemption is to avoid an interruption of exchange trading to afford time for the issuer of the new security to list and register it, or for the exchange to apply for unlisted trading privileges.
Under paragraph (d) of Rule 12a-5, after an exchange has taken action to admit any security to trading pursuant to the provisions of the Rule, the exchange is required to file with the Commission a notification on Form 26. Form 26 provides the Commission with certain information regarding a security admitted to trading on an exchange pursuant to Rule 12a-5, including: (1) The name of the exchange, (2) the name of the issuer, (3) a description of the security, (4) the date(s) on which the security was or will be admitted to when-issued and/or regular trading, and (5) a brief description of the transaction pursuant to which the security was or will be issued.
The Commission generally oversees the national securities exchanges. This mission requires that, under Section 12(a) of the Act specifically, the Commission receive notification of any securities that are permitted to trade on an exchange pursuant to the temporary exemption under Rule 12a-5. Without the Rule and the Form, the Commission would be unable fully to implement these statutory responsibilities.
There are currently eight national securities exchanges subject to Rule 12a-5. While approximately 40 Forms 26 are filed annually, the reporting burdens are not typically spread evenly among the exchanges. For purposes of this analysis of burden, however, the staff has assumed that each exchange files an equal number (five) of Form 26 notifications. Each notification requires approximately 20 minutes to complete. Each respondent's compliance burden, then, in a given year would be approximately 100 minutes (20 minutes/report × 5 reports = 100 minutes), which translates to just over 13 hours in the aggregate for all respondents (8 respondents × 100 minutes/respondent = 800 minutes, or 131/3 hours).
Based on the most recent available information, the Commission staff estimates that the cost to respondents of completing a notification on Form 26 is, on average, $15 per response. The staff estimates that the total annual related reporting cost per respondent is $75 (5 responses/respondent × $15 cost/response), for a total annual related cost to all respondents of $600 ($75 cost/ respondent × 8 respondents).
Compliance with Rule 12a-5 is required to obtain the benefit of the temporary exemption from registration offered by the Rule. There are no recordkeeping requirements associated with Rule 12a-5. Information received in response to Rule 12a-5 shall not be kept confidential; the information collected is public information.
Rule 12f-1, originally adopted in 1934 pursuant to Sections 12(f) and 23(a) of the Act and as modified in 1995, sets forth the information which an exchange must include in an application to reinstate its ability to extend unlisted trading privileges to any security for which such unlisted trading privileges have been suspended by the Commission, pursuant to Section 12(f)(2)(A) of the Act. An application must provide the name of the issuer, the title of the security, the name of each national securities exchange, if any, on which the security is listed or admitted to unlisted trading privileges, whether transaction information concerning the security is reported in the consolidated transaction reporting system contemplated by Rule 11Aa3-1 under the Act, and any other pertinent information Rule 12f-1 further requires a national securities exchange seeking to reinstate its ability to extend unlisted trading privileges to a security to indicate that it has provided a copy of such application to the issuer of the security, as well as to any other national securities exchange on which the security is listed or admitted to unlisted trading privileges.
The information required by rule 12f-1 enables the Commission to make the necessary findings under the Act prior to granting applications to reinstate unlisted trading privileges. This information is also made available to members of the public who may wish to comment upon the applications. Without the Rule, the Commission would be unable to fulfill these statutory responsibilities.
There are currently eight national securities exchanges subject to Rule 12f-1. The burden of complying with Rule 12f-1 arises when a potential respondent seeks to reinstate its ability to extend unlisted trading privileges to any security for which unlisted trading privileges have been suspended by the Commission, pursuant to Section 12(f)(2)(A) of the Act. The staff estimates that each application would require approximately one hour to complete. Thus each potential respondent would incur on average one burden hour in complying with the Rule.
The Commission staff estimates that there could be as many as eight responses annually and that each respondent's related cost of compliance with Rule 12f-1 would be $50, or, the cost of one hour of professional work needed to complete the application. The total annual related reporting cost for all potential respondents, therefore, is $400 (8 responses × $50/response).
Compliance with Rule 12f-1 is mandatory. There are no recordkeeping requirements associated with Rule 12f-1. Information received in response to Rule 12f-1 shall not be kept confidential; the information collected is public information.
Rule 12f-3, which was originally adopted in 1934 pursuant to Sections 12(f) and 23(a) of the Act, prescribes the information which must be included in applications for and notices of termination or suspension of unlisted trading privileges for a security as contemplated in Section 12(f)(4) of the Act. An application must provide, among other things, the name of the applicant; a brief statement of the applicant's interest in the question of termination of suspension of such unlisted trading privileges; the title of the security; the name of the issuer; certain information regarding the size of the class of security and its recent trading history; and a statement indicating that the applicant has provided a copy of such application to the exchange from which the suspension or termination of unlisted trading privileges are sought, and to any other exchange on which the security is listed or admitted to unlisted trading privileges.
The information required to be included in applications submitted pursuant to Rule 12f-3, is intended to provide the Commission with sufficient information to make the necessary findings under the Act to terminate or suspend by order the unlisted trading privileges granted a security on a national securities exchange. Without Start Printed Page 3503the Rule, the Commission would be unable to fulfill these statutory responsibilities.
The burden of complying with Rule 12f-3 arises when a potential respondent, having a demonstrable bona fide interest in the question of termination or suspension of the unlisted trading privileges of a security, determines to seek such termination or suspension. The staff estimates that each such application to terminate or suspend unlisted trading privileges requires approximately one hour to complete. Thus each potential respondent would incur on average one burden hour in complying with the Rule.
The Commission staff estimates that there could be as many as ten responses annually and that each respondent's related cost of compliance with Rule 12f-3 would be $50, or, the cost of one hour of professional work needed to complete the application. The total annual related reporting costs for all potential respondents, therefore, is $500 (10 responses×50/response).
Compliance with the application requirements of Rule 12f-3 is mandatory, though the filing of such applications is undertaken voluntarily. There are no recordkeeping requirements associated with Rule 12f-3. Information received in response to Rule 12f-1 shall not be kept confidential; the information collected is public information.
Rule 12Aj-1 implements the requirements of Sections 15A, 17, and 19 of the Act by requiring every association registered as, or applying for registration as, a national securities association or as an affiliated securities association to keep its registration statement up-to-date by making periodic filings with the commission on Form X-15AJ-1 and Form X-15AJ-2.
Rule 15Aj-1 requires a securities association to promptly notify the Commission after the discovery of any inaccuracy in its registration statement or in any amendment or supplement thereto by filing an amendment to its registration statement on Form X-15AJ-1 correcting such inaccuracy. The Rule also requires an association to promptly notify the Commission of any change which renders no longer accurate any information contained or incorporated in its registration statement or in any amendment or supplement thereto by filing a current supplement on Form X-15AJ-1. Rule 15Aj-1 further requires an association to file each year with the Commission an annual consolidated supplement on Form X-15AJ-2.
The information required by Rule 15Aj-1 and Form X-15AJ-1 and X-15AJ-2 is intended to enable the Commission to carry out its statutorily mandated oversight functions and to assure that registered securities associations are in compliance with the Act. This information is also made available to members of the public. Without the requirements imposed by the Rule, the Commission would be unable to fulfill its regulatory responsibilities.
There is presently only one registered securities association, which registered in 1939, subject to the Rule. The burdens associated with Rule 15Aj-1 requirements have been borne by only one securities association since Rule 15Aj-1 was adopted. Furthermore, the burdens associated with Rule 15Aj-1 vary depending on whether amendments and current supplements are filed on Form X-15AJ-1 in addition to an annual consolidated supplement filed on Form X-15AJ-2. The Commission staff estimates the burden in hours necessary to comply with the Rule by filing an amendment or a current supplement on Form X-15AJ-1 to be approximately one-half hour, with a related cost of $11, per response. The Commission staff estimates the burden in hours necessary to comply with the Rule by filing an annual consolidated supplement on Form X-15AJ-2 to be approximately three hours, with a related cost of $90. Therefore, the Commission staff estimates that the total annual related reporting cost associated with the Rule to be upwards of $90, assuming a minimum filing of an annual consolidated statement on Form X-15AJ-2, with additional filings on Form X-15AJ-1 correspondingly increasing such reporting cost.
Compliance with Rule 15Aj-1 is mandatory. Information received in response to Rule 15Aj-1 shall not be kept confidential; the information collected is public information.
Rule 15c2-1 generally prohibits a broker-dealer from using its customers' securities as collateral to finance its own transactions. Subject to certain exceptions and exemptions, Rule 15c2-1 prohibits a broker-dealer from: (1) Commingling under the same lien customer securities with other customer securities, without the written consent of each customer; (2) commingling under the same lien customer securities with non-customer securities (including those of the broker-dealer) for a loan made to the broker-dealer, and (3) hypothecating customer securities for a loan amount which exceeds all customers' aggregate indebtedness relating to securities carried in their accounts. Under Rule 15c2-1, a broker-dealer must collect information necessary to prevent the rehypothecation of customer securities in contravention of the Rule, issue and retain copies of notices to the pledgee of hypothecation of customer securities in accordance with the Rule, and collect written consents from customers in accordance with the Rule. The collection of information required by Rule 15c2-1 is necessary to ensure compliance with the Rule, and to advice customers of the Rule's protections. In addition, the collection of information is necessary to execute the Commission's mandate under the Securities Exchange of 1934 (“Exchange Act”) to prevent fraudulent, manipulative, and deceptive acts and practices by broker-dealers.
There are approximately 177 respondents (i.e., broker-dealers that carry or clear customer accounts that also have bank loans) that must comply with the Rule. Each of these approximately 177 respondents make an estimated 45 annual responses, for an aggregate total of 7,965 responses per year. Each response takes approximately 0.5 hours to complete. Thus, the total compliance burden per year is 3,983 burden hours. The approximate cost per hour is $25 (based on an annual salary of $52,000 for clerical labor), resulting in a total compliance cost of $99,575 (3,983 hours @ $25 per hour).
Although Rule 15c2-1 does not specify a retention period or record keeping requirement under the Rule, nevertheless broker-dealers are required to preserve the records for a period no less then six years pursuant to Rule 17a-4(c). The information required under Rule 15c2-1 is necessary for broker-dealers to hypothecate customer securities in compliance with the Rule. Rule 15c2-1 does not assure confidentiality for the information retained under the rule.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number.
Written comments regarding the above information should be directed to the following persons: (a) Desk Officer for the Securities and Exchange Commission, Office of Information and Start Printed Page 3504Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503; and (b) Michael E. Bartell, Associated Executive Director, Office of Information Technology, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549. Comments must be submitted to Office of Management and Budget within 30 days of this notice.Start Signature
Dated: January 11, 2000.
Margaret H. McFarland,
1. In fact, some exchanges do not file any notifications on Form 26 with the Commission in a given year.Back to Citation
2. The records required by Rule 15c2-1 would be available only to the examination of the Commission staff, state securities authorities and the Self-Regulatory Organizations (SRO's). Subject to the provisions of the Freedom of Information Act, 5 U.S.C. § 522, and the Commission's rules thereunder (17 CFR 200.80(b)(4)(iii)), the Commission does not generally publish or make available information contained in any reports, summaries, analyses, letters, or memoranda arising out of, in anticipation of, or in connection with an examination or inspection of the books and records of any person or any other investigation.Back to Citation
[FR Doc. 00-1479 Filed 1-20-00; 8:45 am]
BILLING CODE 8010-01-M