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Proposed Extension of Existing Collection; Comment Request

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


Rule 9b-1; OMB Control No. 3235-0480; SEC File No. 270-429.

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 collection of information provided for the following rule: Rule 9b-1 Options Disclosure Document (17 CFR 240.9b-1) under the Securities Exchange Act of 1934 (15 U.S.C. 78 et seq.). The Commission plans to submit this existing collection of information to the Office of Management and Budget (“OMB”) for extension and approval.

Rule 9b-1 (17 CFR 240.9b-1) sets forth the categories of information required to be disclosed in an options disclosure document (“ODD”) and requires the options markets to file an ODD with the Commission 60 days prior to the date it is distributed to investors. In addition, Rule 9b-1 provides that the ODD must be amended if the information in the document becomes materially inaccurate or incomplete and that amendments must be filed with the Commission 30 days prior to the distribution to customers. Finally, Rule 9b-1 requires a broker-dealer to furnish to each customer an ODD and any amendments, prior to accepting an order to purchase or sell an option on behalf of that customer.

There are six options markets that must comply with Rule 9b-1. These six respondents work together to prepare a single ODD covering options traded on each market, as well as amendments to the ODD. These respondents file approximately three amendments per year. The staff calculates that the preparation and filing of amendments should take no more than eight hours per options market. Thus, the total compliance burden for options markets per year is 144 hours (6 options markets × 8 hours per amendment × 3 amendments). The estimated cost for an in-house attorney is $295 per hour,[1] Start Printed Page 69683resulting in a total cost of compliance for these respondents of $42,480 per year (144 hours @ $295).

In addition, approximately 1,500 broker-dealers must comply with Rule 9b-1. Each of these respondents will process an average of three new customers for options each week and, therefore, will have to furnish approximately 156 ODDs per year. The postal mailing or electronic delivery of the ODD takes respondents no more than 30 seconds to complete for an annual compliance burden for each of these respondents of 78 minutes, or 1.3 hours. Thus, the total compliance burden per year is 1,950 hours (1,500 broker-dealers × 1.3 hours). The estimated cost for a general clerk of a broker-dealer is $40 per hour,[2] resulting in a total cost of compliance for these respondents of $78,000 per year (1,950 hours @ $40).

The total compliance burden for all respondents under this rule (both options markets and broker-dealers) is 2,094 hours per year (144 + 1,950), and total compliance costs of $120,480 ($42,480 + $78,000).

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 shall have practical utility; (b) the accuracy of the Commission's estimates 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 Lewis W. Walker, Acting Director/Chief Information Officer, Securities and Exchange Commission, c/o Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312 or send an e-mail to:

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Dated: November 12, 2008.

Florence E. Harmon,

Acting Secretary.

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1.  The $295/hour figure for an attorney is from SIFMA's Management & Professional Earnings in the Securities Industry 2007, modified by the Commission staff to account for an 1800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits and overhead.

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2.  The $40/hour figure for a general clerk is from SIFMA's Office Salaries in the Securities Industry 2007, modified by Commission staff to account for an 1800-hour work-year and multiplied by 2.92 to account for bonuses, firm size, employee benefits and overhead. The staff believes that the ODD would be mailed or electronically delivered to customers by a general clerk of the broker-dealer or some other equivalent position.

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[FR Doc. E8-27430 Filed 11-18-08; 8:45 am]