[Federal Register Volume 76, Number 3 (Wednesday, January 5, 2011)]
[Notices]
[Pages 594-596]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-33271]


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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 301 and Forms ATS and ATS-R; SEC File No. 270-451; OMB 
Control No. 3235-0509.

    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

[[Page 595]]

Office of Management and Budget a request for extension of the 
previously approved collection of information discussed below.
    Regulation ATS provides a regulatory structure for alternative 
trading systems. Regulation ATS allows an alternative trading system to 
choose between registering as a broker-dealer and complying with 
Regulation ATS, or registering as a national securities exchange. 
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 apply only 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. The Rule 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.
    An alternative trading system with significant volume is required 
to comply with requirements for fair access and systems capacity, 
integrity and security. Under Rule 301, such alternative trading system 
is also 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 a user of the denial or limitation and 
its 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 the Rule 
to monitor the growth and development of alternative trading systems, 
and to monitor whether the systems promote fair and orderly securities 
markets and operate in a manner that is consistent 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 would 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 80 respondents.
    An estimated 80 respondents will file an average total of 552 
responses per year, which corresponds to an estimated aggregated annual 
response burden of 1,792.5 hours (comprised of 1,356 hours professional 
labor and 436.5 hours para-professional labor). At an average cost per 
burden hour of approximately $316 for professional labor and $59 for 
para-professional labor, with an additional 35% of labor costs added to 
account for overhead costs such as printing, copying, and postage, the 
resultant total related cost of compliance for these respondents is 
$613,236.82 per year ((1,356 professional burden hours multiplied by 
$316) plus (436.5 para-professional burden hours multiplied by $59) 
equals $454,249.50; plus 35% for overhead costs ($158,987.32) equals 
$613,236.82; figures may vary slightly due to arithmetic rounding).
    An estimated 5 respondents will commence operations as an ATS each 
year, necessitating the filing of an initial operation report on Form 
ATS. The Commission estimates that the average compliance burden for 
each respondent would be 20 hours, comprising 13 hours of in-house 
professional work and 7 hours of clerical work. Thus, the total 
compliance burden per year is 100 hours (5 responses x 20 hours = 100 
hours). The total cost of compliance for the annual burden is $22,605 
($316 x 13 hours per response + $59 x 7 hours per response = $4,521 per 
response; $4,521 x 5 responses = $22,605). In addition, estimated 
overhead costs for printing, copying, and postage equal to 35% of the 
value of labor costs amount to $1,582.35 per respondent ($4,521 times 
35%). Thus, the Commission estimates the total annualized cost burden 
would be $7,911.75 ($1,582.35 x 5 respondents).
    An estimated 80 respondents will file an estimated two periodic 
amendments to their initial operation report on Form ATS each year, an 
estimated total of 160 responses. The Commission estimates that the 
average compliance burden for each response would be 2 hours, 
comprising 1.5 hours of in-house professional work and 0.5 hours of 
clerical work. Thus, the total compliance burden per year is 320 hours 
(160 responses x 2 hours = 320 hours). The total cost of compliance for 
the annual burden is $1,007 ($316 x 1.5 hours per response + $59 x 0.5 
hours per response = $503.50 per response; $503.50 x 160 responses = 
$80,560). In addition, estimated overhead costs for printing, copying, 
and postage equal to 35% of the value of labor costs amount to $176.23 
per response ($503.50 times 35%). Thus, the Commission estimates the 
annualized cost burden for each respondent would be $352.46 ($176.23 x 
2 responses per respondent) and the total annualized cost burden for 
all respondents would be $28,196.80 ($176.23 x 80 respondents x 2 
responses per respondent).
    An estimated 80 respondents will file four quarterly reports on 
Form ATS-R each year for an estimated total of 320 responses. The 
Commission estimates that that the average compliance burden for each 
response would be 4 hours, comprising 3 hours of in-house professional 
work and 1 hour of clerical work. Thus, the total compliance burden per 
year is 1,280 hours (320 responses x 4 hours = 1,280 hours). The total 
cost of compliance for the annual burden is $322,240 ($316 x 3 hours 
per response + $59 x 1 hours per response = $1,007 per response; $1,007 
x 320 responses = $322,240). In addition, estimated overhead costs for 
printing, copying, and postage equal to 35% of the value of labor costs 
amount to $352.45 per response ($1,007 times 35%). Thus, the Commission 
estimates the annualized cost burden for each respondent would be 
$1,409.80 ($352.45 x 4 responses per respondent) and the total 
annualized cost burden for all respondents would be $112,784 ($352.45 x 
80 respondents x 4 responses per respondent).
    An estimated three respondents will be required to file a cessation 
of operations report on Form ATS each year. The Commission estimates 
that the average compliance burden for each response would be 2 hours, 
comprising 1.5 hours of in-house professional work and 0.5 hours of 
clerical work. Thus, the total compliance burden per year is 6

[[Page 596]]

hours (3 responses x 2 hours = 6 hours). The total cost of compliance 
for the annual burden is $1,510.50 ($316 x 1.5 hours per response + $59 
x 0.5 hours per response = $503.50 per response; $503.50 x 3 responses 
= $1,510.50). In addition, estimated overhead costs for printing, 
copying, and postage equal to 35% of the value of labor costs amount to 
$176.23 per respondent ($503.5 times 35%). Thus, the Commission 
estimates the total annualized cost burden would be $528.69 ($176.23 x 
3 respondents).
    An estimated two respondents will meet certain volume thresholds 
requiring them to establish standards for granting access on its 
trading system. The Commission estimates that the average compliance 
burden for each response would be 5 hours of in-house professional work 
at $316 per hour. Thus, the total compliance burden per year is 10 
hours (2 responses x 5 hours = 10 hours). The total cost of compliance 
for the annual burden is $3,160 ($316 x 5 hours per response x 2 
responses = $3,160). In addition, estimated overhead costs for 
printing, copying, and postage equal to 35% of the value of labor costs 
amount to $553 per response ($1,580 times 35%). Thus, the Commission 
estimates the total annualized cost burden would be $1,106 ($553 x 2 
respondents).
    An estimated two respondents will meet certain volume thresholds 
requiring them to provide notice to any user upon any decision to deny 
or limit that user's access to the system, and these notice obligations 
will be triggered an estimated 27 times per year for each respondent. 
The Commission estimates that the average compliance burden for each 
response would be 1 hour of in-house professional work at $316 per 
hour. Thus, the total compliance burden per year is 54 hours (2 
respondents x 27 responses each x 1 hour = 54 hours). The total cost of 
compliance for the annual burden is $17,064 ($316 x 1 hour per response 
x 54 responses = $17,064). In addition, estimated overhead costs for 
printing, copying, and postage equal to 35% of the value of labor costs 
amount to $110.60 per response ($316 times 35%). Thus, the Commission 
estimates the annualized cost burden for each respondent would be 
$2,986.20 ($110.60 x 27 responses per respondent) and the total 
annualized cost burden for all respondents would be $5,972.40 ($110.60 
x 2 respondents x 27 responses per respondent).
    An estimated two respondents will meet certain volume thresholds 
requiring them to keep records relating to any steps taken to comply 
with systems capacity, integrity, and security requirements under Rule 
301. The Commission estimates that the average compliance burden for 
each response would be 10 hours of in-house professional work at $316 
per hour. Thus, the total compliance burden per year is 20 hours (2 
respondents x 10 hours = 20 hours). The total cost of compliance for 
the annual burden is $6,320 ($316 x 20 hours = $6,320). In addition, 
estimated overhead costs for printing, copying, and postage equal to 
35% of the value of labor costs amount to $1,106 per response ($3,160 
times 35%). Thus, the Commission estimates the total annualized cost 
burden would be $2,212 ($1,106 x 2 respondents).
    An estimated two respondents will meet certain volume thresholds 
requiring them to provide a notice to the Commission to report any 
systems outages, and these notice obligations will be triggered an 
estimated 5 times per year for each respondent. The Commission 
estimates that the average compliance burden for each response would be 
.25 hours of in-house professional work at $316 per hour. Thus, the 
total compliance burden per year is 2.5 hours (2 respondents x 5 
responses each x .25 hours = 2.5 hours). The total cost of compliance 
for the annual burden is $790 ($316 x .25 hours per response x 10 
responses = $790). In addition, estimated overhead costs for printing, 
copying, and postage equal to 35% of the value of labor costs amount to 
$27.65 per response ($79 times 35%). Thus, the Commission estimates the 
annualized cost burden for each respondent would be $138.25 ($27.65 x 5 
responses per respondent) and the total annualized cost burden for all 
respondents would be $276.50 ($27.65 x 2 respondents x 5 responses per 
respondent).
    Compliance with Rule 301 is mandatory. The information required by 
the Rule 301 is 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 (``FOIA''), 
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 
arising 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.
    Regulation ATS requires alternative trading systems to preserve any 
records, for at least three years, made in the process of complying 
with the systems capacity, integrity and security requirements. 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.
    The public may view the background documentation for this 
information collection at the following Web site, http://www.reginfo.gov. Comments should be directed to: (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, DC 20503, or by sending an e-
mail to: <a href="/cdn-cgi/l/email-protection#2d7e454c4a584b594c726c454048496d42404f0348425d034a425b"><span class="__cf_email__" data-cfemail="b5e6ddd4d2c0d3c1d4eaf4ddd8d0d1f5dad8d79bd0dac59bd2dac3">[email protected]</span></a>; and (ii) Thomas Bayer, Chief 
Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312 or send an 
e-mail to: <a href="/cdn-cgi/l/email-protection#92c2c0d3cddff3fbfef0fdead2e1f7f1bcf5fde4"><span class="__cf_email__" data-cfemail="56060417091b373f3a34392e1625333578313920">[email protected]</span></a>. Comments must be submitted to OMB 
within 30 days of this notice.

    Dated: December 30, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-33271 Filed 1-4-11; 8:45 am]
BILLING CODE 8011-01-P


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