[Federal Register Volume 78, Number 30 (Wednesday, February 13, 2013)]
[Notices]
[Pages 10217-10218]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-03271]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-489, OMB Control No. 3235-0541]
Proposed Collection; Comment Request
Upon Written Request Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0123.
Extension:
Rule 606 of Regulation NMS.
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.) (``PRA''), the Securities and
Exchange Commission (``Commission'') is soliciting comments on the
existing collection of information provided for in Rule 606 of
Regulation NMS (``Rule 606'') (17 CFR 242.606), under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et seq.). The Commission plans to
submit this existing collection of information to the Office of
Management and Budget (``OMB'') for extension and approval.
Rule 606 (formerly known as Rule 11Ac1-6) requires broker-dealers
to prepare and disseminate quarterly order routing reports. Much of the
information needed to generate these reports already should be
collected by broker-dealers in connection with their periodic
evaluations of their order routing practices. Broker-dealers must
conduct such evaluations to fulfill the duty of best execution that
they owe their customers.
The collection of information obligations of Rule 606 apply to
broker-dealers that route non-directed customer orders in covered
securities. The Commission estimates that out of the currently 5178
broker-dealers that are subject to the collection of information
obligations of Rule 606, clearing brokers bear a substantial portion of
the burden of complying with the reporting and recordkeeping
requirements of Rule 606 on behalf of small to mid-sized introducing
firms. There currently are approximately 527 clearing brokers. In
addition, there are approximately 2426 introducing brokers that receive
funds or securities from their customers. Because at least some of
these firms also may have greater involvement in determining where
customer orders are routed for execution, they have been included,
along with clearing brokers, in estimating the total burden of Rule
606.
The Commission staff estimates that each firm significantly
involved in order routing practices incurs an average burden of 40
hours to prepare and disseminate a quarterly report required by Rule
606, or a burden of 160 hours per year. With an estimated 2953 \1\
broker-dealers significantly involved in order routing practices, the
total industry-wide burden per year to comply with the quarterly
reporting requirement in Rule 606 is estimated to be 472,480 hours (160
x 2953).
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\1\ 527 clearing brokers + 2426 introducing brokers = 2953.
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Rule 606 also requires broker-dealers to respond to individual
customer requests for information on orders handled by the broker-
dealer for that customer. Clearing brokers generally bear the burden of
responding to these requests. The Commission staff estimates that an
average clearing broker incurs an annual burden of 400 hours (2000
responses x 0.2 hours/response) to prepare, disseminate, and retain
responses to customers required by Rule 606. With an estimated 527
clearing brokers subject to Rule 606, the total industry-wide burden
per year to comply with the customer response requirement in Rule 606
is estimated to be 210,800 hours (527 x 400).
Written comments are invited on: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission, including whether the information will
have practical utility; (b) the accuracy of the Commission's estimate
of the burden of the 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.
The Commission may not conduct or sponsor a collection of
information
[[Page 10218]]
unless it displays a currently valid OMB control number. No person
shall be subject to any penalty for failing to comply with a collection
of information subject to the PRA that does not display a valid OMB
control number.
Comments should be directed to Thomas Bayer, Director/Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 6432 General Green Way, Alexandria, Virginia 22312 or
send an email to: [email protected].
Dated: February 7, 2013.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-03271 Filed 2-12-13; 8:45 am]
BILLING CODE 8011-01-P