26298 Federal Register / Vol. 75, No. 90 / Tuesday, May 11, 2010 / Notices 

1Regulation NMS, adopted by the Commission in 

June 2005, redesignated the national market system 

rules previously adopted under Section 11A of the 

Exchange Act. Rule 11Ac1–5 under the Exchange 

Act was redesignated Rule 605 of Regulation NMS, 

and Rule 11Ac1–6 under the Exchange Act was 

redesignated Rule 606 of Regulation NMS. No 

substantive amendments were made to Rule 605 

and Rule 606 of Regulation NMS. See Securities 

Exchange Act Release No. 51808 (June 9, 2005), 70 

FR 37496 (June 29, 2005). 

existence and adequacy of covered 

institutions’ safeguard policies and 

procedures. 

We estimate that as of the end of 

2009, there are 5253 broker-dealers, 

4522 investment companies, and 11,450 

investment advisers currently registered 

with the Commission, for a total of 

21,225 covered institutions. We expect 

that all of these covered institutions 

have already documented their 

safeguard policies and procedures in 

writing and therefore will incur no 

hourly burdens related to the initial 

documentation of policies and 

procedures. 

However, we expect that 

approximately 10 percent of the 21,225 

covered institutions currently registered 

with the Commission will review and 

update their policies and procedures 

each year, for a total of 2123 covered 

institutions that will spend time to 

update their policies and procedures. 

The amount of time spent reviewing and 

updating safeguard policies and 

procedures is likely to vary widely, 

based on the size of the entity, the 

complexity of its operations, and any 

significant changes in the security 

environment. We estimate that it will 

take a typical covered institution that 

reviews and updates its safeguard 

policies and procedures approximately 

20 hours to complete such a review and 

document the results, for a total hourly 

burden for all institutions of 42,460 

hours. 

Although existing covered institutions 

would not incur any initial hourly 

burden in complying with the 

safeguards rule, we expect that newly 

registered institutions would incur some 

hourly burdens associated with 

documenting their safeguard policies 

and procedures. We estimate that 

approximately 1500 broker-dealers, 

investment companies, or investment 

advisers register with the Commission 

annually. However, we also expect that 

approximately 70% of these newly 

registered covered institutions (1050) 

are affiliated with an existing covered 

institution, and will rely on an 

organization-wide set of previously 

documented safeguard policies and 

procedures created by their affiliates. 

We estimate that these affiliated newly 

registered covered institutions will 

incur a significantly reduced hourly 

burden in complying with the 

safeguards rule, as they will need only 

to review their affiliate’s existing 

policies and procedures, and identify 

and adopt the relevant policies for their 

business. Therefore, we expect that 

newly registered covered institutions 

with existing affiliates will incur an 

hourly burden of approximately 15 

hours in identifying and adopting 

safeguard policies and procedures for 

their business, for a total hourly burden 

for all affiliated new institutions of 

15,750 hours. 

Finally, we expect that the 450 newly 

registered entities that are not affiliated 

with an existing institution will incur a 

significantly higher hourly burden in 

reviewing and documenting their 

safeguard policies and procedures. We 

expect that virtually all of the newly 

registered covered entities that do not 

have an affiliate are likely to be small 

entities and are likely to have smaller 

and less complex operations, with a 

correspondingly smaller set of safeguard 

policies and procedures to document, 

compared to other larger existing 

institutions with multiple affiliates. We 

estimate that it will take a typical newly 

registered unaffiliated institution 

approximately 65 hours to review, 

identify, and document their safeguard 

policies and procedures, for a total of 

29,250 hours for all newly registered 

unaffiliated entities. 

Therefore, we estimate that the total 

annual hourly burden associated with 

the safeguards rule is 87,460 hours. We 

also estimate that all covered 

institutions will be respondents each 

year, for a total of 21,225 respondents. 

These estimates of average burden 

hours are made solely for the purposes 

of the Paperwork Reduction Act. 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 safeguard rule does not 

require the reporting of any information 

or the filing of any documents with the 

Commission. The collection of 

information required by the safeguard 

rule is mandatory. 

Please direct general comments 

regarding the above information to the 

following persons: (i) Desk Officer for 

the Securities and Exchange 

Commission, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503 

or send an e-mail to Shagufta Ahmed at 

Shagufta_Ahmed@omb.eop.gov; and (ii) 

Charles Boucher, Director/CIO, 

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 30 days of 

this notice. 

May 5, 2010. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–11097 Filed 5–10–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investors 

Education and Advocacy, 

Washington, DC 20549–0213. 

Extension: 

Rule 605 of Regulation NMS; SEC File 

No. 270–488; OMB Control No. 

3235–0542 

Rule 606 of Regulation NMS; SEC File 

No. 270–489; OMB Control No. 

3235–0541. 

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 

requests for approval of extension of the 

existing collections of information for 

the following rules: Rule 605 and Rule 

606 (17 CFR 242.605 and 17 CFR 

242.606) (formerly Rule 11Ac1–5 and 

Rule 11Ac1–6) under the Securities 

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

seq.) (‘‘Exchange Act’’). 

Rule 605 of Regulation NMS,1

formerly known as Rule 11Ac1–5, 

requires market centers to make 

available to the public monthly order 

execution reports in electronic form. 

The Commission believes that many 

market centers retain most, if not all, the 

underlying raw data necessary to 

generate these reports in electronic 

format. Once the necessary data is 

collected, market centers could either 

program their systems to generate the 

statistics and reports, or transfer the 

data to a service provider (such as an 

independent company in the business of 

preparing such reports or a selfregulatory organization (‘‘SRO’’) that 

would generate the statistics and 

reports. 

The collection of information 

obligations of Rule 605 apply to all 

market centers that receive covered 

orders in national market system 

securities. The Commission estimates 

that approximately 408 market centers 

are subject to the collection of 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 90 / Tuesday, May 11, 2010 / Notices 26299 

2 527 clearing brokers + 2426 introducing brokers 

= 2953. 

1 15 U.S.C.78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Exchange Act Release No. 60711 (September 

23, 2009), 74 FR 49419 (September 28, 2009) (order 

approving SR–NYSEArca–2009–44). 

information obligations of Rule 605. 

Each of these respondents is required to 

respond to the collection of information 

on a monthly basis. 

The Commission staff estimates that, 

on average, Rule 605 causes respondents 

to spend 6 hours per month in 

additional time to collect the data 

necessary to generate the reports, or 72 

hours per year. With an estimated 408 

market centers subject to Rule 605, the 

total data collection cost to comply with 

the monthly reporting requirement is 

estimated to be 29,376 hours per year. 

Rule 606 of Regulation NMS (‘‘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 applies 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 606. 

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 2

broker-dealers significantly involved in 

order routing practices, the total burden 

per year to comply with the quarterly 

reporting requirement in Rule 606 is 

estimated to be 472,480 hours. 

Rule 606 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 burden per 

year to comply with the customer 

response requirement in Rule 606 is 

estimated to be 210,800 hours. 

The collection of information 

obligations imposed by Rule 605 and 

Rule 606 are mandatory. The response 

will be available to the public and will 

not be kept confidential. Persons should 

note that an agency may not conduct or 

sponsor, and a person is not required to 

comply with, a collection of information 

unless it displays a currently valid OMB 

control number. 

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: 

Shagufta_Ahmed@omb.eop.gov; and (ii) 

Charles Boucher, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Shirley 

Martinson, 6432 General Green Way, 

Alexandria, Virginia 22312, or send an 

e-mail to PRA_Mailbox@sec.gov. 

Comments must be submitted to OMB 

within 30 days of this notice. 

May 5, 2010. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–11099 Filed 5–10–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62031; File No. SR– 

NYSEArca–2010–39] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Arca, Inc. Adding 75 Options Classes 

to the Penny Pilot Program 

May 4, 2010. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on April 28, 

2010, NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

the ‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to designate 

75 options classes to be added to the 

Penny Pilot Program for Options 

(‘‘Penny Pilot’’ or ‘‘Pilot’’) on May 3, 

2010. There are no changes to the rule 

text. A copy of this filing is available on 

the Exchange’s Web site at http:// 

www.nyse.com, at the Exchange’s 

principal office and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NYSE Arca proposes to identify the 

next 75 options classes to be added to 

the Penny Pilot effective May 3, 2010. 

The Exchange recently received 

approval to extend and expand the Pilot 

through December 31, 2010.4 In that 

filing, the Exchange had proposed 

expanding the Pilot on a quarterly basis 

to add the next 75 most actively traded 

multiply listed options classes based on 

national average daily volume for the 

six months prior to selection, closing 

under $200 per share on the Expiration 

Friday prior to expansion, except that 

the month immediately preceding their 

addition to the Penny Pilot will not be 


emcdonald on DSK2BSOYB1PROD with NOTICES