[Federal Register Volume 64, Number 137 (Monday, July 19, 1999)]
[Notices]
[Pages 38697-38698]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18306]
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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 17a-22, SEC File No. 270-202, OMB Control No. 3235-0196
Rule 17Ab2-1 and Form CA-1, SEC File No. 270-203, OMB Control No.
3235-0195
Rule 15c2-5, SEC File No. 270-195, OMB Control No. 3235-0198
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
collections of information discussed below.
Rule 17a-22 under the Securities Exchange Act of 1934 (``Exchange
Act'') \1\ requires all registered clearing agencies to file with the
Commission three copies of all materials they issue or make generally
available to their participants or other entities with whom they have a
significant relationship. The filings with the Commission must be made
within ten days after the materials are issued, and when the Commission
is not the appropriate regulatory agency, the clearing agency must file
one copy of the material with its appropriate regulatory agency. The
Commission is responsible for overseeing clearing agencies and uses the
information filed pursuant to Rule 17a-22 to determine whether a
clearing agency is implementing procedural or policy changes. The
information filed aides the Commission in determining whether such
changes are consistent with the purposes of Section 17A of the Exchange
Act. Also, the Commission uses the information to determine whether a
clearing agency has changed its rules without reporting the actual or
prospective change to the Commission as required under Section 19(b) of
the Exchange Act.
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\1\ 15 U.S.C. 78a et seq.
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The respondents to Rule 17a-22 generally are registered clearing
agencies.\2\ The frequency of filings made by clearing agencies
pursuant to Rule 17a-22 varies, but on average there are approximately
200 filings per year per clearing agency. Because the filings consist
of materials that have been prepared for widespread distribution, the
additional cost to the clearing agencies associated with submitting
copies to the Commission is relatively small. The Commission staff
estimates that the cost of compliance with Rule 17a-22 to all
registered clearing agencies is approximately $4,930. This represents
one dollar per filing in postage, or a total of $3,400. The remaining
$1,530 (or approximately 31% of the total cost of compliance) is the
estimated cost of additional printing, envelopes, and other
administrative expenses. (The estimated total cost per response is
$1.45 per page representing $1.00 per page in postage plus $0.45 for
printing, envelopes, and other administrative expenses.)
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\2\ Respondents include temporarily registered clearing
agencies. Respondents also may include clearing agencies granted
exemptions from the registration requirements of Section 17A,
conditioned upon compliance with Rule 17a-22.
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Rule 17Ab2-1 and Form CA-1 require clearing agencies to register
with the Commission and to meet certain requirements with regard to,
among other things, a clearing agency's organization, capacities, and
rules. The information is collected from the clearing agency upon the
initial application for registration on Form CA-1. Thereafter,
information is collected by amendment to the initial Form CA-1 when
material changes in circumstances necessitates modification of the
information previously provided to the Commission.
The Commission uses the information disclosed on Form CA-1 to (i)
determine whether an applicant meets the standards for registration set
forth in Section 17A of the Securities Exchange Act of 1934 (``Exchange
Act''), (ii) enforce compliance with the Exchange Act's registration
requirement, and (iii) provide information about specific registered
clearing agencies for compliance and investigatory purposes. Without
Rule 17Ab2-1, the Commission could not perform these duties as
statutorily required.
[[Page 38698]]
There are currently 15 registered clearing agencies, three clearing
agencies that have been granted an exemption from registration, and two
entities with pending applications for an exemption from clearing
agency registration. The Commission staff estimates that each initial
Form CA-1 requires approximately 130 hours to complete and submit for
approval. Hours required for amendments to Form CA-1 that must be
submitted to the Commission in connection with material changes to the
initial CA-1 can vary, depending upon the nature and extent of the
amendment. Since the Commission only receives an average of one
submission per year, the aggregate annual burden associated with
compliance with Rule 17Ab2-1 and Form CA-1 is 130 hours. Based upon the
staff's experience, the average cost to clearing agencies of preparing
and filing the initial Form CA-1 is estimated to be $16,391.
Rule 15c2-5 prohibits a broker-dealer from arranging or extending a
loan to customers, not subject to Regulation T (12 CFR 220), in
connection with the offer or sale of securities unless, before entering
the transaction, the broker-dealer: (i) delivers to the customer a
written statement containing specific information concerning the terms,
obligations, risks and charges of the loan; (ii) obtains from the
customer sufficient financial information to determine that the entire
transaction is suitable for the customer, and (iii) retains on file and
makes available to the customer a written statement setting forth the
broker-dealer's basis for determining that the transaction was
suitable. The collection of information required by the Rule is
necessary to execute the Commission's mandate under the Exchange Act to
prevent fraudulent, manipulative, and deceptive acts and practices by
broker-dealers.
There are approximately 50 respondents that require an aggregate
total of 600 hours to comply with the Rule. Each of these approximately
50 registered broker-dealers makes an estimated 6 annual responses, for
an aggregate total of 300 responses per year. Each response takes
approximately 2 hours to complete. Thus, the total compliance burden
per year is 600 burden hours. The approximate cost per hour is $25.00
(based on an annual salary of $52,000 for clerical labor), resulting in
a total compliance cost of $15,000 (600 hours @ $25.00 per hour).
Although Rule 15c2-5 does not specify a retention period or record
keeping requirement under the Rule, nevertheless broker-dealers are
required to preserve the records for a period no less than six years
pursuant to Rule 17a-4(c). The information required under Rule 15c2-5
is necessary for broker-dealers to engage in the lending activities
prescribed in the Rule. Rule 15c2-5 does not assure confidentiality for
the information retained under the Rule.\3\
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\3\ The records required by Rule 15c2-5 would be available only
to the examination of the Commission staff, state securities
authorities and the SROs. Subject to the provisions of the Freedom
of Information Act, 5 U.S.C. 522, and the Commission's rules
thereunder (17 CFR 200.80(b)(4)(iii)), the Commission does not
generally publish or make available information contained in any
reports, summaries, analyses, letters, or memoranda rising out of,
in anticipation of, or in connection with an examination or
inspection of the books and records of any person or any other
investigation.
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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, Office of Information and Regulatory Affairs,
Office of Management and Budget, New Executive Office Building,
Washington, DC 20503; and (ii) Michael E. Bartell, Associate Executive
Director, Office of Information Technology, Securities and Exchange
Commission, 450 5th Street, NW Washington, DC 20549. Comments must be
submitted to OMB within 30 days of this notice.
Dated: July 12, 1999.
Margaret H. Mcfarland
Deputy Secretary.
[FR Doc. 99-18306 Filed 7-16-99; 8:45 am]
BILLING CODE 8010-01-M
