81 FR 8111 - Proposed Collection; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 31 (February 17, 2016)

Page Range		8111-8111
FR Document		2016-03113
Federal Register, Volume 81 Issue 31 (Wednesday, February 17, 2016)
[Federal Register Volume 81, Number 31 (Wednesday, February 17, 2016)]
[Notices]
[Page 8111]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-03113]


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SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 
20549-2736.

Extension:
    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.) (``PRA''), the Securities and 
Exchange Commission (``Commission'') is soliciting comments on the 
existing collection of information provided for in Rule 606 of 
Regulation NMS (``Rule 606'') (17 CFR 242.606), under the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.). The Commission plans to 
submit this existing collection of information to the Office of 
Management and Budget (``OMB'') for extension and approval.
    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 apply to 
broker-dealers that route non-directed customer orders in covered 
securities. The Commission estimates that out of the currently 4,240 
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 185 clearing brokers. In 
addition, there are approximately 81 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 266 \1\ 
broker-dealers significantly involved in order routing practices, the 
total industry-wide burden per year to comply with the quarterly 
reporting requirement in Rule 606 is estimated to be 42,560 hours (160 
x 266).
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    \1\ 185 clearing brokers + 81 introducing brokers = 266.
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    Rule 606 also 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 185 
clearing brokers subject to Rule 606, the total industry-wide burden 
per year to comply with the customer response requirement in Rule 606 
is estimated to be 74,000 hours (185 x 400).
    Written comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information will 
have practical utility; (b) the accuracy of the Commission's estimate 
of the burden of the collection of information; (c) ways to enhance the 
quality, utility, and clarity of the information 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.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information under the PRA unless it 
displays a currently valid OMB control number.
    Comments should be directed to Pamela Dyson, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 100 F Street NE., Washington, DC 20549, or send an email 
to: [email protected].

    Dated: February 10, 2016.
Brent J. Fields,
Secretary.
[FR Doc. 2016-03113 Filed 2-16-16; 8:45 am]
BILLING CODE 8011-01-P
Federal Register / Vol. 81, No. 31 / Wednesday, February 17, 2016 / Notices 8111

broker-dealers will spend an average of SECURITIES AND EXCHANGE per year. With an estimated 266 1
two hours of clerical staff time and one COMMISSION broker-dealers significantly involved in
hour of managerial staff time per year order routing practices, the total
obtaining the information required by Proposed Collection; Comment industry-wide burden per year to
the rule, resulting in a total aggregate Request comply with the quarterly reporting
burden of 6,000 hours per year for Upon Written Request, Copies Available requirement in Rule 606 is estimated to
complying with the rule. Assuming an From: Securities and Exchange be 42,560 hours (160 × 266).
hourly cost of $63 1 for a compliance Commission, Office of FOIA Services, Rule 606 also requires broker-dealers
clerk and $283 2 for a compliance 100 F Street NE., Washington, DC to respond to individual customer
manager, the resultant total internal 20549–2736. requests for information on orders
labor cost of compliance for the Extension: handled by the broker-dealer for that
respondents is $818,000 per year (2,000 Rule 606 of Regulation NMS, SEC File No. customer. Clearing brokers generally
entities × ((2 hours/entity × $63/hour) + 270–489, OMB Control No. 3235–0541. bear the burden of responding to these
(1 hour per entity × $283/hour)) = Notice is hereby given that, pursuant requests. The Commission staff
$818,000). to the Paperwork Reduction Act of 1995 estimates that an average clearing broker
Written comments are invited on: (a) (44 U.S.C. 3501 et seq.) (‘‘PRA’’), the incurs an annual burden of 400 hours
Whether the proposed collection of Securities and Exchange Commission (2000 responses × 0.2 hours/response) to
information is necessary for the proper (‘‘Commission’’) is soliciting comments prepare, disseminate, and retain
performance of the functions of the on the existing collection of information responses to customers required by Rule
Commission, including whether the provided for in Rule 606 of Regulation 606. With an estimated 185 clearing
NMS (‘‘Rule 606’’) (17 CFR 242.606),
information shall have practical utility; brokers subject to Rule 606, the total
under the Securities Exchange Act of
(b) the accuracy of the Commission’s industry-wide burden per year to
1934 (15 U.S.C. 78a et seq.). The
estimates of the burden of the proposed Commission plans to submit this comply with the customer response
collection of information; (c) ways to existing collection of information to the requirement in Rule 606 is estimated to
enhance the quality, utility, and clarity Office of Management and Budget be 74,000 hours (185 × 400).
of the information collected; and (d) (‘‘OMB’’) for extension and approval. Written comments are invited on: (a)
ways to minimize the burden of the Rule 606 (formerly known as Rule Whether the proposed collection of
collection of information on 11Ac1–6) requires broker-dealers to information is necessary for the proper
respondents, including through the use prepare and disseminate quarterly order performance of the functions of the
of automated collection techniques or routing reports. Much of the information Commission, including whether the
other forms of information technology. needed to generate these reports already information will have practical utility;
Consideration will be given to should be collected by broker-dealers in (b) the accuracy of the Commission’s
comments and suggestions submitted in connection with their periodic estimate of the burden of the collection
writing within 60 days of this evaluations of their order routing
of information; (c) ways to enhance the
publication. practices. Broker-dealers must conduct
quality, utility, and clarity of the
such evaluations to fulfill the duty of
An agency may not conduct or best execution that they owe their information collected; and (d) ways to
sponsor, and a person is not required to customers. minimize the burden of the collection of
respond to, a collection of information The collection of information information on respondents, including
under the PRA unless it displays a obligations of Rule 606 apply to broker- through the use of automated collection
currently valid OMB control number. dealers that route non-directed customer techniques or other forms of information
Please direct your written comments orders in covered securities. The technology. Consideration will be given
to: Pamela Dyson, Director/Chief Commission estimates that out of the to comments and suggestions submitted
Information Officer, Securities and currently 4,240 broker-dealers that are in writing within 60 days of this
Exchange Commission, c/o Remi Pavlik- subject to the collection of information publication.
Simon, 100 F Street NE., Washington, obligations of Rule 606, clearing brokers An agency may not conduct or
DC 20549, or send an email to: PRA_ bear a substantial portion of the burden sponsor, and a person is not required to
Mailbox@sec.gov. of complying with the reporting and respond to, a collection of information
recordkeeping requirements of Rule 606
Dated: February 10, 2016. under the PRA unless it displays a
on behalf of small to mid-sized
currently valid OMB control number.
Brent J. Fields, introducing firms. There currently are
Secretary. approximately 185 clearing brokers. In Comments should be directed to
[FR Doc. 2016–03112 Filed 2–16–16; 8:45 am] addition, there are approximately 81 Pamela Dyson, Director/Chief
introducing brokers that receive funds Information Officer, Securities and
BILLING CODE 8011–01–P
or securities from their customers. Exchange Commission, c/o Remi Pavlik-
Because at least some of these firms also Simon, 100 F Street NE., Washington,
1 The hourly rate used for a compliance clerk was may have greater involvement in DC 20549, or send an email to: PRA_
from SIFMA’s Office Salaries in the Securities determining where customer orders are Mailbox@sec.gov.
routed for execution, they have been
asabaliauskas on DSK5VPTVN1PROD with NOTICES

Industry 2013, modified by Commission staff to
account for an 1,800 hour work-year and multiplied
Dated: February 10, 2016.
included, along with clearing brokers, in
by 2.93 to account for bonuses, firm size, employee Brent J. Fields,
estimating the total burden of Rule 606.
benefits and overhead. Secretary.
2 The hourly rate used for a compliance manager
The Commission staff estimates that
each firm significantly involved in order [FR Doc. 2016–03113 Filed 2–16–16; 8:45 am]
was from SIFMA’s Management & Professional
Earnings in the Securities Industry 2013, modified
routing practices incurs an average BILLING CODE 8011–01–P
by Commission staff to account for an 1,800 hour burden of 40 hours to prepare and 1 185 clearing brokers + 81 introducing brokers =
work-year and multiplied by 5.35 to account for disseminate a quarterly report required
266.
bonuses, firm size, employee benefits and overhead. by Rule 606, or a burden of 160 hours

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Document Created: 2016-02-17 01:16:44
Document Modified: 2016-02-17 01:16:44
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		81 FR 8111