[Federal Register Volume 62, Number 176 (Thursday, September 11, 1997)]
[Notices]
[Pages 47838-47839]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24040]


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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 Services, Washington, DC 
20549.

Extension:
    Rule 10b-10, SEC File No. 270-389, OMB Control No. 3235-0444
    Rule 11Ac1-3, SEC File No. 270-382, OMB Control No. 3235-0435
    Rule 15c2-12, SEC File No. 270-330, OMB Control No. 3235-0472

    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.
    Rule 10b-10, Confirmation of Transactions, applies to all 
securities transactions, other than transactions in municipal 
securities or U.S. savings bonds, it would potentially apply to all of 
the approximately 5,400 firms registered with the Securities and 
Exchange Commission that effect transactions on behalf of customers.
    Rule 10b-10 requires broker-dealers convey to customers basic trade 
information regarding their securities transactions. This information 
includes the date and time of the transaction; the identity and number 
of shares bought or sold; and the trading capacity of the broker-
dealer. Depending on the trading capacity of the broker-dealer, the 
rule requires the disclosure of commissions and, under specified 
circumstances, mark-up and mark-down information. For transactions in 
debt securities, the rule requires the disclosure of redemption and 
yield information.
    The confirmation process is automated, and it takes about one 
minute to generate and send a confirmation. The cost per confirmation 
generally stays the same. Per year, it is estimated that broker-dealers 
spend 10.8 million hours complying with Rule 10b-10.
    It is important to note, however, that the confirmation is a 
customary document used by the industry. The staff estimates the costs 
of producing and sending a confirmation to be approximately 89 cents, 
although the amount of confirmations sent and the cost of sending each 
confirmation will vary from firm to firm. Smaller firms will send fewer 
confirmations because they will have fewer transactions. As a result, 
the total cost to the industry is approximately $578 million per year 
(650 million confirmations at 89 cents per confirmation).
    Rule 11Ac1-3, Customer Account Statements, requires disclosure on 
each new account and on a yearly basis thereafter, on the annual 
statement, the firm's policies regarding receipt of payment for order 
flow from any market makers, exchanges or exchange members to which it 
routes customers' order in the national market system securities for 
execution; and information regarding the aggregate amount of monetary 
payments, discounts, rebates or reduction in fees received by the firm 
over the past year.
    It is estimated that there are 5,308 registered broker-dealers with 
customer accounts. The staff estimates that the average number of hours 
necessary for each broker-dealer to comply with the Rule 11Ac1-3 is 
fourteen hours annually. Thus, the total burden is 74,312 hours 
annually. The average cost per hour is approximately $40. Therefore, 
the total cost of compliance for broker-dealers is $297,248.
    Rule 15c2-12, Municipal Securities Disclosure, requires 
underwriters of municipal securities: (1) to obtain and review a copy 
of an official statement deemed final by an issuer of the securities, 
except for the omission of specified information; (2) in non-
competitively bid offerings, to make available, upon request, the most 
recent preliminary official statement, if any; (3) to contract with the 
issuer of the securities, or its agent, to receive, within specified 
time periods, sufficient copies of the issuer's final official 
statement to comply both with this rule and any rules of the Municipal 
Securities Rulemaking Board; (4) to provide, for a specified period of 
time, copies of the final official statement to any potential customer 
upon request; (5) before purchasing or selling municipal securities in 
connection with an offering, to reasonably determine that the issuer or 
other specified person has undertaken, in a written agreement or 
contract, for the benefit of holders of such municipal securities, to 
provide certain information about the issue or issuer on a continuing 
basis to a nationally recognized municipal securities information 
repository; and (6) to review the information the issuer of the 
municipal security has undertaken to provide prior to recommending a 
transaction in the municipal security.
    These disclosure and recordkeeping requirements will ensure that 
investors have adequate access to official disclosure documents that 
contain details about the value and risks of particular municipal 
securities at the time of issuance while the existence of compulsory 
repositories will ensure that investors have continued access to terms 
and provisions relating to certain static features of those municipal 
securities. The provisions of Rule 15c2-12 regarding an issuer's 
continuing disclosure requirements assist investors by ensuring that 
information about an issue or issuer remains available after the 
issuance.
    Municipal offerings of less than $1 million are exempt from the 
rule, as are offerings of municipal securities issued in large 
denominations that are sold to no more than 35 sophisticated investors,

[[Page 47839]]

have short-term maturities, or have short-term tender or put features. 
It is estimated that approximately 12,000 brokers, dealers, municipal 
securities dealers, issuers of municipal securities, and nationally 
recognized municipal securities information repositories will spend a 
total of 123,850 hours per year complying with Rule 15c2-12. Based on 
average cost per hour of $50, the total cost of compliance with Rule 
15c2-12 is $6,192,500.
    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 estimates of 
the burden of the proposed collection of information; (c) ways to 
enhance the quality, utility and clarity of the information to be 
collected; and (d) ways to minimize the burden of the collection of 
information on respondents, including through the use of automated 
collected techniques or other forms of information technology. 
Consideration will be given to comments and suggestions submitted in 
writing within 60 days of this publication.
    Please direct your written comments to Michael E. Bartell, 
Associate Executive Director, Office of Information Technology, 
Securities and Exchange Commission, 450 5th Street, N.W., Washington, 
DC 20549.

    Dated: September 2, 1997.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-24040 Filed 9-10-97; 8:45 am]
BILLING CODE 8010-01-M