[Federal Register Volume 64, Number 122 (Friday, June 25, 1999)]
[Notices]
[Pages 34303-34304]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16202]
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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 15g-2 [17 CFR 240.15g-2], SEC File No. 270-381, OMB Control
No. 3235-0434
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 a
request for extension of the previously approved collection of
information discussed below.
The ``Penny Stock Disclosure Rules'' (Rule 15g-2, 17 CFR 240.15g-2)
require broker-dealers to provide their customers with a risk
disclosure document, as set forth in Schedule 15G, prior to their first
non-exempt transaction in a ``penny stock.'' As amended, the rule
requires broker-dealers to obtain written acknowledgement from the
customer that he or she has received the required risk disclosure
document. The amended rule also requires broker-dealers to maintain a
copy of the customer's written acknowledgement for at least three years
following the date on which the risk disclosure document was provided
to the customer, the first two years in an accessible place.
The risk disclosure documents are for the benefit of the customers,
to assure that they are aware of the risks of trading in ``penny
stocks'' before they enter into a transaction. The risk disclosure
documents are maintained by the broker-dealers and may be reviewed
during the course of an examination by the Commission. The Commission
estimates that there are approximately 270 broker-dealers subject to
Rule 15g-2, and that each one of these firms will process an average of
three new customers for ``penny stocks'' per week. Thus each respondent
will process approximately 156 risk disclosure documents per year. The
staff calculates that (a) the copying and mailing of the risk
disclosure document should take no more than two minutes per customer,
and (b) each customer should take no more than eight minutes to review,
sign, and return the risk disclosure document. Thus, the total ongoing
respondent burden is approximately 10 minutes per response, or an
aggregate total of 1,560 minutes per respondent. Since there are 270
respondents, the annual burden is 421,200 minutes (1,560 minutes per
each of the 270 respondents), or 7,020 hours. In addition, broker-
dealers will incur a recordkeeping burden of approximately
[[Page 34304]]
two minutes per response. Thus each respondent will incur a
recordkeeping burden of 312 (156 x 312/60). Accordingly, the aggregate
annual hour burden associated with Rule 15g-2 is 8,424 hours
(7,020+1,404).
The Commission does not maintain the risk disclosure document,
however, it must be retained by the broker-dealer for at least three
years following the date on which the risk disclosure document was
provided to the customer, the first two years in an accessible place.
The collection of information required by the rule is mandatory. The
risk disclosure document is otherwise governed by the internal policies
of the broker-dealer regarding confidentiality, etc.
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.
Written 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 10102, 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: June 21, 1999.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-16202 Filed 6-24-99; 8:45 am]
BILLING CODE 8010-01-M
