E4-3267. 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 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”) has submitted to the Office of Management and Budget (“OMB”) a request for extension of the previously approved collection of information discussed below.

Rule 17a-3 [17 CFR 240.17a-3] under the Securities Exchange Act of 1934 requires records to be made by certain exchange members, brokers, and dealers, to be used in monitoring compliance with the Commission's financial responsibility program and antifraud and antimanipulative rules as well as other rules and regulations of the Commission and the self-regulatory organizations. It is estimated that approximately 6,900 active broker-dealer respondents registered with the Commission incur an average burden of 2,421,195 hours per year to comply with this rule. It is estimated that approximately 6,900 active broker-dealer respondents registered with the Commission incur an average burden of 2,421,195 hours per year to comply with this rule. The Commission believes that requirements included in Rule 17a-3(a)(17) relating to new account data would be performed by clerical workers. The hourly wage of the average person who would be providing customers with account record information is $24 per hour.^[1] The hourly wage of the average person who would be updating account record information is $25 per hour.^[2] Thus the aggregate cost of these hours is about $16.86 million ((601,753 hours × $24)^[3] + (96,742 hours × $25)^[4] ). The Commission believes that requirements contained in the rest of Rule 17a-3 would be performed by individuals in a broker-dealer's compliance department at $82 per hour.^[5] Thus, the dollar cost of the 4,600 yearly hours incurred as a result of these rules is 1,722,700 × 82 = $171.66 million. The total cost of ongoing compliance with Rule 17a-3 is $16.86 + $171.66 = $188.52 million.

The Commission believes that requirements included in Rule 17a-3(a)(17) relating to new account data would be performed by clerical workers. The hourly wage of the average person who would be providing customers with account record information is $24 per hour.^[6] The hourly wage of the average person who would be updating account record information is $25 per hour.^[7] Thus the aggregate cost of these hours is about $16.86 million ((601,753 hours × $24)^[8] + (96,742 hours × $25)^[9] ). The Commission believes that requirements contained in the rest of Rule 17a-3 would be performed by individuals in a broker-dealer's compliance department at $82 per hour.^[10] Thus, the dollar cost of the 4,600 yearly hours incurred as a result of these rules is 1,722,700 × 82 = $171.66 million. The total cost of ongoing compliance with Rule 17a-3 is $16.86 + $171.66 = $188.52 million.

Rule 17a-3 does not contain record retention requirements. Compliance with the rule is mandatory. The required records are available only to the examination staff of the Commission and the self-regulatory organization of which the broker-dealer is a member. 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 estimated burden hours should be directed to the following persons: (i) Desk Officer for the Securities and Exchange Commission, by sending an e-mail to [e-mail]; and (ii) R. Corey Booth, Director/Chief Information Officer, Office of Information Technology, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549. Comments must be submitted to the Office of Management and Budget within 30 days of this notice.

Dated: November 15, 2004.

Margaret H. McFarland,

Deputy Secretary.

Footnotes

1.  This figure is based on the SIA Report on Office Salaries In the Securities Industry 2003 (Retail Sales Assistant, Junior) and includes 35% for overhead charges.

2.  This figure is based on the SIA Report on Office Salaries In the Securities Industry 2003 (Data Entry Clerk, Senior) and includes 35% for overhead charges.

3.  This figure comes to approximately $14,442,072.

4.  This figure comes to approximately $2,418,550.

5.  This figure is based on statistics collected by the Commission's Office of Economic Analysis.

6.  This figure is based on the SIA Report on Office Salaries In the Securities Industry 2003 (Retail Sales Assistant, Junior) and includes 35% for overhead charges.

7.  This figure is based on the SIA Report on Office Salaries In the Securities Industry 2003 (Data Entry Clerk, Senior) and includes 35% for overhead charges.

8.  This figure comes to approximately $14,442,072.

9.  This figure comes to approximately $2,418,550.

10.  This figure is based statistics collected by the Commission's Office of Economic Analysis.