Document ID: SEC-2010-0699-0001
Agency: sec
Document Type: Notice
Title: Agency Information Collection Activities; Proposals, Submissions, and Approvals
Posted Date: 2010-05-11T04:00Z

[Federal Register: May 11, 2010 (Volume 75, Number 90)]
[Notices]               
[Page 26298-26299]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11my10-134]                         

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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 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 self-regulatory organization (``SRO'') that 
would generate the statistics and reports.
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    \1\ Regulation 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).
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    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

[[Page 26299]]

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.
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    \2\ 527 clearing brokers + 2426 introducing brokers = 2953.
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    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