83 FR 2254 - Proposed Collection; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 10 (January 16, 2018)

[Federal Register Volume 83, Number 10 (Tuesday, January 16, 2018)]
[Notices]
[Pages 2254-2255]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-00492]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-614, OMB Control No. 3235-0682]


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 13h-1 and Form 13H

    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 Rule 13h-1 (17 CFR 240.13h-1) 
and Form 13H--registration of large traders \1\ submitted pursuant to

[[Page 2255]]

Section 13(h) of the Securities Exchange Act of 1934 (15 U.S.C. 78a et 
seq.) (``Exchange Act''). The Commission plans to submit this existing 
collection of information to the Office of Management and Budget for 
extension and approval.
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    \1\ Rule 13h-1(a)(1) defines ``large trader'' as any person that 
directly or indirectly, including through other persons controlled 
by such person, exercises investment discretion over one or more 
accounts and effects transactions for the purchase or sale of any 
NMS security for or on behalf of such accounts, by or through one or 
more registered broker-dealers, in an aggregate amount equal to or 
greater than the identifying activity level or voluntarily registers 
as a large trader by filing electronically with the Commission Form 
13H.
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    Rule 13h-1 and Form 13H under Section 13(h) of the Exchange Act 
established a large trader reporting framework.\2\ The framework 
assists the Commission in identifying and obtaining certain baseline 
information about traders that conduct a substantial amount of trading 
activity, as measured by volume or market value, in the U.S. securities 
markets.
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    \2\ See Securities Exchange Act Release No. 64976 (July 27, 
2011), 76 FR 46959 (August 3, 2011).
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    The identification, recordkeeping, and reporting framework provides 
the Commission with a mechanism to identify large traders and obtain 
additional information on their trading activity. Specifically, the 
system requires large traders to identify themselves to the Commission 
and make certain disclosures to the Commission on Form 13H. Upon 
receipt of Form 13H, the Commission issues a unique identification 
number to the large trader, which the large trader then provides to its 
registered broker-dealers. Certain registered broker-dealers are 
required to maintain transaction records for each large trader, and are 
required to report that information to the Commission upon request.\3\ 
In addition, certain registered broker-dealers are required to adopt 
procedures to monitor their customers for activity that would trigger 
the identification requirements of the rule.
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    \3\ The Commission, pursuant to Rule 17a-25 (17 CFR 240.17a-25), 
currently collects transaction data from registered broker-dealers 
through the Electronic Blue Sheets (``EBS'') system to support its 
regulatory and enforcement activities. The large trader framework 
added two new fields, the time of the trade and the identity of the 
trader, to the EBS system.
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    The respondents to the collection of information are large traders. 
There are currently approximately 6,300 large traders and 300 
registered broker-dealers. Based on its experience collecting initial 
Forms 13H in previous years, the Commission estimates that 
approximately 600 new large traders will register each year and thus be 
subject to quarterly and annual reporting requirements over the next 
three years.
    Each new large trader respondent files one response, which takes 
approximately 20 hours to complete. The average internal cost of 
compliance per response is $5,615, calculated as follows: (3 hours of 
compliance manager time at $307 per hour) + (7 hours of legal time at 
$362 per hour) + (10 hours of paralegal time at $212 per hour) = 
$5,615. Additionally, on average, each large trader respondent 
(including new respondents) files 2 responses per year, which take 
approximately 6 hours to complete. The average internal cost of 
compliance per response is $1,770, calculated as follows: (2 hours of 
compliance manager time at $307 per hour) + (2 hours of legal time at 
$362 per hour) + (2 hours of paralegal time at $212 per hour) = $1,770.
    Each registered broker-dealer's monitoring requirement takes 
approximately 15 hours per year. The average internal cost of 
compliance is $5,430, calculated as follows: 15 hours of legal time at 
$362 per hour = $5,430. The Commission estimates that it may send 100 
requests specifically seeking large trader data per year to each 
registered broker-dealer subject to the rule, and it would take each 
registered broker-dealer 2 hours to comply with each request. 
Accordingly, the annual reporting hour burden for a broker-dealer is 
estimated to be 200 burden hours (100 requests x 2 burden hours/request 
= 200 burden hours). The average internal cost of compliance per 
response is $432, calculated as follows: 2 hours of paralegal time at 
$212 per hour = $432.
    Compliance with Rule 13h-1 is mandatory. The information collection 
under proposed Rule 13h-1 is considered confidential subject to the 
limited exceptions provided by the Freedom of Information Act.\4\
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    \4\ See 5 U.S.C. 552 and 15 U.S.C. 78m(h)(7).
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    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 
shall have practical utility; (b) the accuracy of the Commission's 
estimates of the burden of the proposed 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.
    Please direct your written comments to: Pamela C. 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: January 9, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-00492 Filed 1-12-18; 8:45 am]
 BILLING CODE 8011-01-P