[Federal Register Volume 62, Number 222 (Tuesday, November 18, 1997)]
[Notices]
[Pages 61559-61560]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30177]
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SECURITIES AND EXCHANGE COMMISSION
Submission for OMB Review; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Filings and Information Services, Washington, DC
20549
Extension:
Rule 10b-10, SEC File No. 270-389, OMB Control No. 3235-0444
Rule 11Ac1-3, SEC File No. 270-382, OMB Control No. 3235-0435
Rule 15c2-12, SEC File No. 270-330, OMB Control No. 3235-0372
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 10b-10, Confirmation of Transactions, applies to all
securities transactions, other than transactions in municipal
securities or U.S. savings bonds, it would potentially apply to all of
the approximately 5,400 firms registered with the Securities and
Exchange Commission that effect transactions on behalf of customers.
Rule 10b-10 requires broker-dealers convey to customers basic trade
information regarding their securities transactions. This information
includes the date and time of the transaction; the identity and number
of shares bought or sold; and the trading capacity of the broker-
dealer. Depending on the trading capacity of the broker-dealer, the
rule requires the disclosure of commissions and, under specified
circumstances, mark-up and mark-down information. For transactions in
debt securities, the rule requires the disclosure of redemption and
yield information.
The confirmation process is automated, and it takes about one
minute to generate and send a confirmation. The cost per confirmation
generally stays the same. Per year, it is estimated that broker-dealers
spend 10.8 million hours complying with Rule 10b-10.
It is important to note, however, that the confirmation is a
customary document used by the industry. The staff estimates the costs
of producing and sending a confirmation to be approximately 89 cents,
although the amount of confirmations sent and the cost of sending each
confirmation will vary from firm to firm. Smaller firms will send fewer
confirmations because they will have fewer transactions. As a result,
the total cost to the industry is approximately $578 million per year
(650 million confirmations at 89 cents per confirmation).
Rule 11Ac1-3, Customer Account Statements, requires disclosure on
each new account and on a yearly basis thereafter, on the annual
statement, the firm's policies regarding receipt of payment for order
flow from any market makers, exchanges or exchange members to which it
routes customers' order in the national market system securities for
execution; and information regarding the aggregate amount of monetary
payments, discounts, rebates or reduction in fees received by the firm
over the past year.
It is estimated that there are 5,308 registered broker-dealers with
customer accounts. The staff estimates that the average number of hours
necessary for each broker-dealer to comply with the Rule 11Ac1-3 is
fourteen hours annually. Thus, the total burden is 74,312 hours
annually. The average cost per hour is approximately $40. Therefore,
the total cost of compliance for broker-dealers is $297,248.
Rule 15c2-12, Municipal Securities Disclosure, requires
underwriters of municipal securities: (1) To obtain and review a copy
of an official statement deemed final by an issuer of the securities,
except for the omission of specified information; (2) in non-
competitively bid offerings, to make available, upon request, the most
recent preliminary official statement, if any; (3) to contract with the
issuer of the securities, or its agent, to receive, within specified
time periods, sufficient copies of the issuer's final official
statement to comply both with this rule and any rules of the Municipal
Securities Rulemaking Board; (4) to provide, for a specified period of
time, copies of the final official statement to any potential customer
upon request; (5) before purchasing or selling municipal securities in
connection with an offering, to reasonably determine that the issuer or
other specified person has undertaken, in a written agreement or
contract, for the benefit of holders of such municipal securities, to
provide certain information about the issue or issuer on a continuing
basis to a nationally recognized municipal securities information
repository; and (6) to review the information the issuer
[[Page 61560]]
of the municipal security has undertaken to provide prior to
recommending a transaction in the municipal security.
These disclosure and recordkeeping requirements will ensure that
investors have adequate access to official disclosure documents that
contain details about the value and risks of particular municipal
securities at the time of issuance while the existence of compulsory
repositories will ensure that investors have continued access to terms
and provisions relating to certain static features of those municipal
securities. The provisions of Rule 15c2-12 regarding an issuer's
continuing disclosure requirements assist investors by ensuring that
information about an issue or issuer remains available after the
issuance.
Municipal offerings of less than $1 million are exempt from the
rule, as are offerings of municipal securities issued in large
denominations that are sold to no more than 35 sophisticated investors,
have short-term maturities, or have short-term tender or put features.
It is estimated that approximately 12,000 brokers, dealers, municipal
securities dealers, issues of municipal securities, and nationally
recognized municipal securities information repositories will spend a
total of 123,850 hours per year complying with Rule 15c2-12. Based on
average cost per hour of $50, the total cost of compliance with Rule
15c2-12 is $6,192,500.
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.
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 Management and Budget, Room 3208, New Executive Office
Building, Washington, D.C. 20503; and (ii) Michael E. Bartell,
Associate Executive Director, Office of Information Technology,
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549. Comments must be submitted to OMB within 30 days of this
notice.
Dated: November 10, 1997.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-30177 Filed 11-17-97; 8:45 am]
BILLING CODE 8010-01-M
