[Federal Register Volume 66, Number 81 (Thursday, April 26, 2001)]
[Notices]
[Pages 21023-21025]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 01-10388]
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SECURITIES AND EXCHANGE COMMISSION
Proposed Collection; Comment Request
Upon Written Request; Copies Available From: Securities and Exchange
Commission, Office of Filings and Information Service, Washington,
DC 20549.
Extension:
Rule 301 and Forms ATS and ATS-R, SEC File No. 270-451, OMB
Control No. 3235-0509
Rule 302, SEC File No. 270-453, OMB Control No. 3235-0510
[[Page 21024]]
Rule 303, SEC File No. 270-450, OMB Control No. 3235-0505
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 collections
of information summarized below. The Commission plans to submit these
existing collections of information to the Office of Management and
Budget for extension and approval.
Regulation ATS provides a regulatory structure that directly
addresses issues related to alternative trading systems' role in the
marketplace. Regulation ATS allows alternative trading systems to
choose between two regulatory structures. Alternative trading systems
have the choice between registering as broker-dealers and complying
with Regulation ATS or registering as national securities exchanges.
Regulation ATS provides the regulatory framework for those alternative
trading systems that choose to be regulated as broker-dealers.
Rule 301 of Regulation ATS contains certain notice and reporting
requirements, as well as additional obligations that only apply to
alternative trading systems with significant volume. Rule 301 describes
the conditions with which an alternative trading system must comply to
be registered as a broker-dealer. Rule 301 requires all alternative
trading systems that wish to comply with Regulation ATS to file an
initial operation report on Form ATS. The initial operation report
requires information regarding operation of the system including the
method of operation, access criteria and the types of securities
traded. Alternative trading systems are also required to supply updates
on Form ATS to the Commission, describing material changes to the
system, and quarterly transaction reports on Form ATS-R. Alternative
trading systems are also required to file cessation of operations
reports on Form ATS.
Alternative trading systems with significant volume are required to
comply with requirements for fair access and systems capacity,
integrity and security. Under Rule 301, such alternative trading
systems are required to establish standards for granting access to
trading on its system. In addition, upon a decision to deny or limit an
investor's access to the system, an alternative trading system is
required to provide notice to the investor of the denial or limitation
and their right to an appeal to the Commission. Regulation ATS requires
alternative trading systems to preserve any records made in the process
of complying with the systems' capacity, integrity and security
requirements. In addition, such alternative trading systems are
required to notify Commission staff of material systems outages and
significant systems changes.
The Commission uses the information provided pursuant to Rule 301
to comprehensively monitor the growth and development of alternative
trading systems to confirm that investors effecting trades through the
systems are adequately protected, and that the systems do not impede
the maintenance of fair and orderly securities markets or otherwise
operate in a manner that is inconsistent with the federal securities
laws. In particular, the information collected and reported to the
Commission by alternative trading systems enables the Commission to
evaluate the operation of alternative trading systems with regard to
national market system goals, and monitor the competitive effects of
these systems to ascertain whether the regulatory framework remains
appropriate to the operation of such systems. Without the information
provided on Forms ATS and ATS-R, the Commission would not have readily
available information on a regular basis in a format that will allow it
to determine whether such systems have adequate safeguards.
Respondents consist of alternative trading systems that choose to
register as broker-dealers and comply with the requirements of
Regulation ATS. The Commission estimates that there are currently
approximately 69 respondents.
An estimated 69 respondents will file an average total of 493
responses per year, which corresponds to an estimated annual response
burden of 1,988.5 hours. At an average cost per burden hour of
approximately $77.07, the resultant total related cost of compliance
for these respondents is $153,263.14 per year (1988.5 burden hours
multiplied by $77.07/hour).
Rule 302 of Regulation ATS describes the recordkeeping requirements
for alternative trading systems that are not national securities
exchanges. Under Rule 302, alternative trading systems are required to
make a record of subscribers to the alternative trading system, daily
summaries of trading in the alternative trading system and records of
order information in the alternative trading system.
The information required to be collected under Rule 302 should
increase the abilities of the Commission, state securities regulatory
authorities, and the self-regulatory organizations (SROs) to ensure
that alternative trading systems are in compliance with Regulation ATS
as well as other rules and regulations of the Commission and the SROs.
If the information is not collected or collected less frequently, the
Commission would be severely limited in its ability to comply with its
statutory obligations, provide for the protection of investors and
promote the maintenance of fair and orderly markets.
Respondents consist of alternative trading system that choose to
register as broker-dealers and comply with the requirements of
Regulation ATS. The Commission estimates that there are currently
approximately 69 respondents.
Sixty-nine respondents will spend approximately 2,484 hours per
year to comply with the recordkeeping requirements of Rule 302. At an
average cost per burden hour of $86.54, the resultant total related
cost of compliance for these respondents is $214,965.36 per year (2,484
burden hours multiplied by $86.54/hour).
Rule 303 of Regulation ATS describes the record preservation
requirements for alternative trading systems that are not national
securities exchanges.
For alternative trading systems that register as broker-dealers,
comply with Regulations ATS and meet certain volume thresholds, such
alternative trading systems would be required to preserve all records
made pursuant to Rule 302, which includes information relating to
subscribers, trading summaries and order information. Such alternative
trading systems would also be required to preserve records of any
notices communicated to subscribers, a copy of the systems' standards
for granting access and any documents generated in the course of
complying with the systems' capacity, integrity and security
requirements under Regulation ATS. Rule 303 also describes how such
records be kept and how long they must be preserved.
The information contained in the records required to be preserved
by Rule 303 will be used by examiner and other representatives of the
Commission, state securities regulatory authorities, and the SROs to
ensure that alternative trading systems are in compliance with
Regulation ATS as well as other rules and regulations of the Commission
and the SROs. Without the data required by Rule 303, the Commission
would be severely limited in its ability to comply with its statutory
obligations, provide for the protection of investors and promote the
maintenance of fair and orderly markets.
Respondents consist of alternative trading systems that choose to
register
[[Page 21025]]
as broker-dealers and comply with the requirements of Regulation ATS.
The Commission estimates that there are currently approximately 69
respondents.
Sixty-nine respondents will spend approximately 276 hours per year
(69 respondents at 4 burden hours/respondent) to comply with the record
preservation requirements of Rule 303. At an average cost per burden
hour of $86.54, the resultant cost of compliance for these respondents
is $23,885.04 per year (276 burden hours multiplied by $86.54/hour).
Written comments are invited on (a) whether the proposed collection
of information is necessary for the proper performance of the functions
of the agency, including whether the information shall have practical
utility; (b) the accuracy of the agency's estimate of the burden of the
proposed collection of information; (c) ways to enhance the quality,
utility, and clarity of the information 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.
Direct your written comments to Michael E. Bartell, Associate
Executive Director, Office of Information Technology, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.
Dated: April 17, 2001.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-10388 Filed 4-25-01; 8:45 am]
BILLING CODE 8010-01-M