Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549.
Rule 11Ac1-5, SEC File No. 270-488, OMB Control No. 3235-0542
Rule 11Ac1-6, 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 collections of information summarized below. The Commission plans to submit these existing collections of information to the Office of Management and Budget for extension and approval.
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 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.
The collection of information obligations of Rule 11Ac1-5 apply to all market centers that receive covered orders in national market system securities. The Commission estimates that approximately 367 market centers are subject to the collection of information obligations of Rule 11Ac1-5. 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 11Ac1-5 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 367 market centers subject to Rule 11Ac1-5, the total data collection cost to comply with the monthly reporting requirement is estimated to be 26,424 hours per year.
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 11Ac1-6 applies to broker-dealers that route non-directed customer orders in covered securities. The Commission estimates that out of the currently 2678 broker-dealers that are subject to the collection of information obligations of Rule 11Ac1-6, clearing brokers bear a substantial portion of the burden of complying with the reporting and recordkeeping requirements of Rule 11Ac1-6 on behalf of small to mid-sized introducing firms. There currently are approximately 330 clearing brokers. In addition, there are approximately 610 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 11Ac1-6.
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 11Ac1-6, or a burden of 160 hours per year. With an estimated 940 broker-dealers significantly involved in order routing practices, the total burden per year to comply with the quarterly reporting requirement in Rule 11Ac1-6 is estimated to be 150,400 hours.
Rule 11Ac1-6 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 × 0.2 hours/response) to prepare, disseminate, and retain responses to customers required by Rule 11Ac1-6. With an estimated 330 clearing brokers subject to Rule 11Ac1-6, the total burden per year to comply with the customer response requirement in Rule 11Ac1-6 is estimated to be 132,000 hours.
The collection of information obligations imposed by Rule 11Ac1-5 and Rule 11Ac1-6 are mandatory. The response will be available to the public and will not be kept confidential. An agency may not conduct or sponsor, and a person is not required to comply with, a collection of information unless it displays a currently valid OMB control number.
General comments regarding the above information should be directed to the following persons: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Start Printed Page 65322Management and Budget, Room 10102, New Executive Office building, Washington, DC 20503; and (ii) Kenneth A. Fogash, Acting Associate Executive Director/CIO, Office of Information Technology, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549. Comments must be submitted to OMB within 30 days of this notice.Start Signature
Dated: November 10, 2003.
Margaret H. McFarland,
[FR Doc. 03-28848 Filed 11-18-03; 8:45 am]
BILLING CODE 8010-01-P