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Proposed Collection; Comment Request

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Start Preamble

Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 20549-0213.


Rule 17a-3; SEC File No. 270-026; OMB Control No. 3235-0033.

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”) intends to submit to the Office of Management and Budget (“OMB”) a request for extension of the previously approved collection of information discussed below. The Code Start Printed Page 54086of Federal Regulations citation to this collection of information: 17 CFR 240.17a-3.

Rule 17a-3 under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) establishes minimum standards with respect to business records that broker-dealers registered with the Commission must make and keep current. These records are maintained by the broker-dealer (in accordance with a separate rule), so they can be used by the broker-dealer and reviewed by Commission examiners, as well as other regulatory authority examiners, during inspections of the broker-dealer.

The collections of information included in Rule 17a-3 is necessary to provide Commission, self-regulatory organizations and state examiners to conduct effective and efficient examinations to determine whether broker-dealers are complying with relevant laws, rules, and regulations. If broker-dealers were not required to create these baseline, standardized records, Commission, self-regulatory organizations and state examiners could be unable to determine whether broker-dealers are in compliance with the Commission's antifraud and anti-manipulation rules, financial responsibility program, and other Commission, self-regulatory organizations, and State laws, rules, and regulations.

As of July 30, 2007 there were 5,850 broker-dealers registered with the Commission. The Commission estimates that these broker-dealer respondents incur a total burden of 2,984,760 hours per year to comply with Rule 17a-3. Approximately 1,524,210 of those hours are attributable to Rule 17a-3(a)(17), and about 1,460,550 hours are attributable to the rest of Rule 17a-3. Rule 17a-3(a)(17) contains requirements to provide customers with account information (approximately 975,809 hours) and requirements to update customer account information (approximately 548,401 hours).

In addition, Rule 17a-3 contains ongoing operation and maintenance costs for broker-dealers including the cost of postage to provide customers with account information, and costs for equipment and systems development. The Commission estimates that under Rule 17a-3(a)(17), approximately 36,365,553 customers will need to be provided with information regarding their account on a yearly basis. The Commission estimates that the postage costs associated with providing those customers with copies of their account record information would be approximately $8,176,435 per year (28,390,400 × $0.288).[1] Based on comments provided in response to the 2001 Amendments (as adjusted to account for inflation), the staff believes that the ongoing equipment and systems development costs relating to Rule 17a-3 for the industry would be about $23,362,847 per year. Consequently, the total cost burden associated with Rule 17a-3 would be approximately $31,539,282 per year.

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 to be 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: R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria, Virginia 22312 or send an e-mail to: Comments must be submitted within 60 days of this notice.

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Dated: September 17, 2007.

Florence E. Harmon,

Deputy Secretary.

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1.  Estimates of postage costs are derived from past conversations with industry representatives and have been adjusted to account for inflation.

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[FR Doc. E7-18550 Filed 9-20-07; 8:45 am]