[Federal Register Volume 63, Number 136 (Thursday, July 16, 1998)]
[Notices]
[Page 38436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18904]


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SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; Comment Request

Existing collection in use without an OMB Number: Rule 8c-1; SEC File 
No. 270-455; OMB Control No. 3235--new
    Upon Written Request, Copies Available From: Securities and 
Exchange Commission, Office of Filings and Information Services, 
Washington, DC 20549.

    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 Approval.
    Rule 8c-1 generally prohibits a broker-dealer from using its 
customers' securities as collateral to finance its own trading, 
speculating, or underwriting transactions. More specifically, the rule 
states three main principles: first, that a broker-dealer is prohibited 
from commingling the securities of different customers as collateral 
for a loan without the consent of each customer; second, that a broker-
dealer cannot commingle customers' securities with its own securities 
under the same pledge; and third, that a broker-dealer can only pledge 
its customers' securities to the extent that customers are in debt to 
the broker-dealer. See Securities Exchange Act Release No. 2690 
(November 15, 1940); Securities Exchange Act Release No. 9428 (December 
29, 1971). Pursuant to Rule 8c-1, respondents must collect information 
necessary to prevent the rehypothecation of customer accounts in 
contravention of the rule, issue and retain copies of notices to the 
pledgee of hypothecation of customer accounts in accordance with the 
rule, and collect written consents from customers in accordance with 
the rule. The information is necessary to ensure compliance with the 
rule, and to advise customers of the rule's protections.
    There are approximately 258 respondents per year (i.e., broker-
dealers that carry or clear customer accounts that also have bank 
loans) that require an aggregate total of 5,805 hours to comply with 
the rule. Each of these approximately 258 registered broker-dealers 
makes an estimated 45 annual responses, for an aggregate total of 
11,610 responses per year. Each response takes approximately 0.5 hours 
to complete. Thus, the total compliance burden per year is 5,805 burden 
hours. The approximate cost per hour is $20, resulting in a total cost 
of compliance for the respondents of $116,100 (5,805 hours @ $20 per 
hour).
    Written comments are invited on: (a) Whether the 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 estimate 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 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.
    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: July 9, 1998.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-18904 Filed 7-15-98; 8:45 am]
BILLING CODE 8010-01-M