15916 Federal Register / Vol. 72, No. 63 / Tuesday, April 3, 2007 / Notices 

7 In addition, such comments should include, if 

possible, annual volumes of flats and catalogs by 

rate cell. If these data are not available, commenters 

should so indicate. 

8Alternatively, judicial notice may be appropriate 

in some circumstances. See 39 CFR 3001.31(i). 

9Comments from persons not parties to the 

proceeding will be included in the public 

comments file by the Commission. 

recommended rates achieve the Postal 

Service’s test year revenue target. 

However, the concerns noted above, 

particularly potential challenges to the 

vitality of the catalog industry, prompt 

the Governors to request 

reconsideration, focused on the 

appropriateness of rebalancing Standard 

Mail letter and flat rates. Unlike the 

other issues on which reconsideration is 

sought, the Governors do not suggest 

any specific ‘‘rebalancing’’ relief. Id. 

In its Initial Statement, the Postal 

Service explicitly recognizes that, ‘‘in 

order to mitigate rates for flats, it would 

be necessary to make upward 

adjustments in other rates, namely, the 

rates for letters.’’ Initial Statement at 9. 

Further, because the Governors do not 

challenge the cost or cost differential 

estimates on which the Commission’s 

recommended Standard Mail rate design 

is based, the Service anticipates that, ‘‘it 

would likewise be necessary to depart to 

some extent from the specific 

passthrough levels initially chosen by 

the Commission.’’ Id. at 10. 

Without suggesting specific 

adjustments, the Postal Service submits 

that there are opportunities for 

providing rate relief to flats mailers 

while generating approximately the 

same net revenue by ‘‘impos[ing] only a 

modest additional rate burden on letter 

mailers.’’ Id. In doing so, the Service 

asks that the Commission’s 

recommendations comply with two rate 

design criteria: (1) Ensuring that the 

revised Regular/Nonprofit Regular 5- 

digit Automation Letters rate remain 

below the Basic ECR/NECR letters rates 

to continue efforts to support the letters 

automation program; and (2) retaining 

the initially-recommended dropship 

discounts for Regular and Nonprofit 

Regular letters and flats rates. 

Additionally, because any such flats/ 

letters rate rebalancing would be based 

essentially on policy grounds, the 

Service submits that it is especially 

important to solicit the views of 

potentially affected Standard Mail users 

whose rates would be affected. In 

particular, the Service suggests that 

mailers may wish to address ‘‘their 

perceptions of the relative trade-offs 

between possible benefits of further rate 

adjustments, and the potential costs of 

further disruptions associated with any 

additional rate changes (which, at this 

point, would be of uncertain magnitude 

and would be implemented at an 

unknown date).’’ Id. at 11. 

In their Decision, the Governors note 

that reconsideration may enable 

‘‘individual mailers and their 

associations to address unique problems 

created by the Commission’s [Standard 

Mail rate] recommendations.’’ Decision 

at 12. Participants commenting in favor 

of any rebalancing of Standard Mail 

letter and flat rates should specify with 

particularity the relief requested. Such 

comments should include, at a 

minimum, citations to the record in 

support of the requested relief and, if 

possible, specific rates consistent with 

the proposed relief.7 Participants 

advocating retention of the 

recommended rates are advised to file 

initial comments to that effect, 

explaining the basis for their position. 

While the procedures adopted herein 

provide an opportunity for comments, 

the Commission reminds potential 

commenters of the need to rely on 

record evidence.8 Anecdotal comments 

unconnected to the record, particularly 

from persons not parties to the 

proceeding, are problematic and cannot 

be relied on by the Commission in 

resolving issues raised on 

reconsideration.9

IV. Ordering Paragraphs 

It is ordered: 

1. Initial comments on matters for 

which reconsideration has been 

requested are due no later April 12, 

2007. 

2. Reply comments are due no later 

than April 19, 2007. 

3. Motions to reopen the record are 

due no later than April 4, 2007. As 

required by the Commission’s Rules of 

Practice and Procedure, answers are due 

no later than April 11, 2007. 

4. The Secretary shall arrange for 

publication of this notice and order in 

the Federal Register. 

By the Commission. 

Steven W. Williams, 

Secretary. 

[FR Doc. E7–6191 Filed 4–2–07; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Proposed Collection; Comment 

Request 

Upon written request, copies available 

from: Securities and Exchange 

Commission, Office of Filings and 

Information Services, Washington, DC 

20549. 

Extension: Rule 15c2–3; SEC File No. 270–

539; OMB Control No. 3235–0599. 

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 

(‘‘OMB’’) a request for extension of the 

previously approved collection of 

information discussed below. 

Proposed rule 15c2–3 (17 CFR 

240.15c2–3) under the Securities 

Exchange Act of 1934 (15 U.S.C. 78a et 

seq.) would require brokers, dealers and 

municipal securities dealers to provide 

point of sale disclosure to investors 

prior to effecting transactions in mutual 

fund shares, UIT interests and college 

savings plan interests. The disclosure 

would provide investors with targeted 

material information about distributionrelated costs and remuneration that lead 

to conflicts of interest for their brokers, 

dealers or municipal securities dealers. 

The collection of information under 

proposed rule 15c2–3 would require 

some of the disclosure that is also 

required under rule 15c2–2. However, 

in contrast to the confirmation 

disclosure required under proposed rule 

15c2–2, which a customer will not 

receive in writing until after a 

transaction has been effected, the point 

of sale disclosure that would be 

required under rule 15c2–3 would 

specifically require that investors be 

provided with information that they can 

use at the time they determine whether 

to enter into a transaction to purchase 

one of the covered securities. 

In addition, the Commission, the selfregulatory organizations, and other 

securities regulatory authorities would 

be able to use records of point of sale 

disclosure delivered pursuant to 

proposed rule 15c2–3 in the course of 

examinations, and investigations, as 

well as enforcement proceedings against 

brokers, dealers and municipal 

securities dealers. However, no 

governmental agency would regularly 

receive any of the information described 

above. 

Proposed rule 15c2–2 potentially 

would apply to all of the approximately 

5,338 brokers, dealers and municipal 

securities dealers that are registered 

with the Commission and that are 

members of NASD. It would also 

potentially apply to approximately 62 

additional municipal securities dealers. 

It is important to note, however, that the 

confirmation is a customary document 

used by the industry. 

Proposed rule 15c2–3(d) would 

require brokers, dealers and municipal 

securities dealers to make records of 

their disclosure sufficient to 


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Federal Register / Vol. 72, No. 63 / Tuesday, April 3, 2007 / Notices 15917 

1The staff estimates that the burden to the 10 

vendors to maintain their systems would be 500,000 

hours annually, or 50,000 hours per vendor. The 

staff estimates that the burden allocated to each 

client on a pro rata basis would be 100 hours 

annually per broker, dealer or municipal security 

dealer that uses vendors’ services (500,000 hours/ 

5,000 = 100 hours). The staff estimates, based on 

discussions with industry representatives, that the 

400 brokers, dealers and municipal securities 

dealers that use proprietary confirmation delivery 

systems, on average, would have a burden of 3,750 

hours annually for maintaining systems. Thus, the 

annual burden for maintaining systems is estimated 

to be 2 million hours ((5,000 × 100) + (400 × 3,750) 

= 2,000,000). 

2 (1 billion transactions at one minute per point 

of sale disclosure = 1 billion minutes; 1 billion 

minutes/60 minutes per hour = 16.7 million hours.) 

3 (16.7 million hours per point of sale disclosure 

+ 2 million hours to develop and implement 

compliance procedures = 18.7 million hours.) 

4Based on discussions with industry 

representatives, the staff estimates that the annual 

cost would be $7,400 per broker, dealer or 

municipal securities dealer. (5,400 brokers, dealers 

and municipal securities dealers × $7,400 = 

$39,996,000.) 

demonstrate compliance with the 

delivery requirements of paragraphs (a) 

and (b) of proposed rule 15c2–3. The 

brokers, dealers or municipal securities 

dealers would have to preserve those 

records for the period specified in 

Exchange Act rule 17a–4(b) (17 CFR 

240.17a–4(b)), or, in the case of records 

of oral communications or the 

disclosures, for the period specified in 

Exchange Act rule 17a–4(b) with regard 

to similar written communications and 

records. While this requirement often 

can be satisfied by maintaining a copy 

of the disclosure document that was 

provided to the customer, in the case of 

disclosure solely by means of oral 

communications, this provision would 

require the broker, dealer or municipal 

securities dealer to have compliance 

procedures in place that are adequate to 

demonstrate that it provided the 

required disclosure. Based on 

discussions with industry participants, 

the Commission staff estimates that the 

annual burden to brokers, dealers and 

municipal securities dealers to develop 

and implement such compliance 

procedures would be approximately 2 

million hours.1

Based on discussions with industry 

representatives, the Commission staff 

estimates that there are 1 billion 

confirmations delivered annually to 

customers in connection with securities 

transactions involving mutual fund 

shares, UIT interests and college savings 

plan interests. Proposed rule 15c2–3 

would require brokers, dealers and 

municipal securities dealers to provide 

disclosure to customers about costs and 

conflicts at the point of sale for each of 

these transactions. The information that 

would be required to be delivered 

pursuant to proposed rule 15c2–3 

would be derived from information that 

brokers, dealers and municipal 

securities dealers would otherwise 

prepare in order to fulfill their 

confirmation disclosure requirements 

under proposed rule 15c2–2. 

The Commission staff further 

estimates from information provided by 

industry participants that it will take, on 

average, about one minute to deliver to 

customers the point of sale disclosure 

required under proposed rule 15c2–3. 

The Commission staff also estimates 

from information provided by industry 

participants that the annual burden to 

brokers, dealers and municipal 

securities dealers to deliver at the point 

of sale the disclosure that would be 

required under proposed rule 15c2–3, 

and to maintaining systems that would 

permit such disclosure, would be 16.7 

million hours.2 As a result, the 

Commission staff estimates that the total 

annual burden to brokers, dealers and 

municipal securities dealers to comply 

with the requirements of proposed rule 

15c2–3, would be 18.7 million hours.3

Based on discussions with industry 

participants, the Commission staff 

estimates that the annual cost to 

brokers, dealers and municipal 

securities dealers for call center services 

and other service providers which 

would assist with development and 

implementation of procedures sufficient 

to demonstrate compliance with the 

delivery requirements of paragraphs (a) 

and (b) of proposed rule 15c2–3 would 

be approximately $40 million.4

In summary, the Commission staff 

estimates that the annual burden for 

complying with the requirements of 

proposed rule 15c2–3 would be 18.7 

million hours and that the annual costs 

of complying with the requirements of 

proposed rule 15c2–3, including call 

center services, and recordkeeping and 

compliance costs, would be $40 million. 

Direct your written comments to R. 

Corey Booth, Director/Chief Information 

Officer, Securities and Exchange 

Commission, C/O Shirley Martinson, 

6432 General Green Way, Alexandria, 

VA 22312 or send an e-mail to: 

PRA_Mailbox@sec.gov. Comments must 

be submitted to OMB within 60 days of 

this notice. 

Dated: March 21, 2007. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–6126 Filed 4–2–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Proposed Collection; Comment 

Request 

Upon written request, copies available 

from: Securities and Exchange 

Commission, Office of Filings and 

Information Services, Washington, DC 

20549. 

Extension: Rule 15c2–2; SEC File No. 270–

538; OMB Control No. 3235–0598. 

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 collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

Proposed rule 15c2–2 (17 CFR 

240.15c2–2) under the Securities 

Exchange Act of 1934 (15 U.S.C. 78a et 

seq.) would provide investors in mutual 

fund shares, UIT interests and college 

savings plan interests with information 

in transaction confirmations, including 

information about certain distributionrelated costs and certain distribution 

arrangements that create conflicts of 

interest for brokers, dealers, municipal 

securities dealers, and their associated 

persons. Proposed rule 15c2–2 

specifically would require confirmation 

disclosure of information about loads 

and other distribution-related costs that 

directly impact the returns earned by 

investors in those securities. It also 

would require brokers, dealers and 

municipal securities dealers to disclose 

their compensation for selling those 

securities, and to disclose information 

about revenue sharing arrangements and 

portfolio brokerage arrangements that 

create conflicts of interest for them. 

Moreover, the proposed rule would 

require brokers, dealers and municipal 

securities dealers to inform customers 

about whether their salespersons or 

other associated persons receive extra 

compensation for selling certain covered 

securities. 

In addition, the Commission, the selfregulatory organizations, and other 

securities regulatory authorities would 

be able to use records of confirmations 

delivered pursuant to proposed rule 

15c2–2 in the course of examinations, 

and investigations, as well as 

enforcement proceedings against 

brokers, dealers and municipal 

securities dealers. However, no 

governmental agency would regularly 

receive any of the information described 

above. 


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