[Federal Register Volume 78, Number 30 (Wednesday, February 13, 2013)]
[Pages 10217-10218]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-03271]



[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 

    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 
    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).

    \1\ 527 clearing brokers + 2426 introducing brokers = 2953.

    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 

[[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]