[Federal Register Volume 85, Number 132 (Thursday, July 9, 2020)]
[Notices]
[Pages 41258-41259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14747]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-495, OMB Control No. 3235-0553]
Proposed Collection; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F St. NE, Washington, DC
20549-2736.
Extension:
Rule 19b-7 and Form 19b-7
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 (``SEC'' or ``Commission'') is soliciting comments on the
existing collection of information provided for in Rule 19b-7 (17 CFR
240.19b-7) and Form 19b-7--Filings with respect to proposed rule
changes submitted pursuant to Section 19b(7) under 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.
The Exchange Act provides a framework for self-regulation under
which various entities involved in the securities business, including
national securities exchanges and national securities associations
(collectively, self-regulatory organizations or ``SROs''), have primary
responsibility for regulating their members or participants. The role
of the Commission in this framework is primarily one of oversight; the
Exchange Act charges the Commission with supervising the SROs and
assuring that each complies with and advances the policies of the
Exchange Act.
The Exchange Act was amended by the Commodity Futures Modernization
[[Page 41259]]
Act of 2000 (``CFMA''). Prior to the CFMA, federal law did not allow
the trading of futures on individual stocks or on narrow-based stock
indexes (collectively, ``security futures products''). The CFMA removed
this restriction and provided that trading in security futures products
would be regulated jointly by the Commission and the Commodity Futures
Trading Commission (``CFTC'').
The Exchange Act requires all SROs to submit to the SEC any
proposals to amend, add, or delete any of their rules. Certain entities
(Security Futures Product Exchanges) would be notice registered
national securities exchanges only because they trade security futures
products. Similarly, certain entities (Limited Purpose National
Securities Associations) would be limited purpose national securities
associations only because their members trade security futures
products. The Exchange Act, as amended by the CFMA, established a
procedure for Security Futures Product Exchanges and Limited Purpose
National Securities Associations to provide notice of proposed rule
changes relating to certain matters.\1\ Rule 19b-7 and Form 19b-7
implemented this procedure. Effective April 28, 2008, the SEC amended
Rule 19b-7 and Form 19b-7 to require that Form 19b-7 be submitted
electronically.\2\
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\1\ These matters are higher margin levels, fraud or
manipulation, recordkeeping, reporting, listing standards, or
decimal pricing for security futures products; sales practices for
security futures products for persons who effect transactions in
security futures products; or rules effectuating the obligation of
Security Futures Product Exchanges and Limited Purpose National
Securities Associations to enforce the securities laws. See 15
U.S.C. 78s(b)(7)(A).
\2\ See Securities Exchange Act Release No. 57526 (March 19,
2008), 73 FR 16179 (March 27, 2008).
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The collection of information is designed to provide the Commission
with the information necessary to determine, as required by the
Exchange Act, whether the proposed rule change is consistent with the
Exchange Act and the rules thereunder. The information is used to
determine if the proposed rule change should remain in effect or
abrogated.
The respondents to the collection of information are SROs. Three
respondents file an average total of approximately 2 responses per
year.\3\ Each response takes approximately 12.5 hours to complete and
each amendment takes approximately 3 hours to complete, which
correspond to an estimated annual response burden of 25 hours ((2 rule
change proposals x 12.5 hours) + (0 amendments \4\ x 3 hours)). The
average internal cost of compliance per response is $5,050 (11.5 legal
hours multiplied by an average hourly rate of $420 \5\ plus 1 hour of
paralegal work multiplied by an average hourly rate of $220 \6\). The
total resulting internal cost of compliance for a respondent is $10,100
per year (2 responses x $5,050 per response).
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\3\ There are currently four Security Futures Product Exchanges
and one Limited Purpose National Securities Association, the
National Futures Authority. However, two Security Futures Product
Exchanges currently do not trade security futures products and, as a
result, have not been filing proposed rule changes. Therefore, there
are currently three respondents to Form 19b-7.
\4\ SEC staff notes that even though no amendments were received
in the previous three years and that staff does not anticipate the
receipt of any amendments, calculation of amendments is a separate
step in the calculation of the PRA burden and it is possible that
amendments are filed in the future. Therefore, instead of removing
the calculation altogether, staff has shown the calculation as
anticipating zero amendments.
\5\ The $420 per hour figure for an Attorney is from SIFMA's
Management & Professional Earnings in the Securities Industry 2013,
modified by Commission staff to account for inflation and an 1800-
hour work-year and then multiplied by 5.35 to account for bonuses,
firm size, employee benefits, and overhead.
\6\ The $220 per hour figure for a Paralegal is from SIFMA's
Management & Professional Earnings in the Securities Industry 2013,
modified by Commission staff to account for inflation and an 1800-
hour work-year and then multiplied by 5.35 to account for bonuses,
firm size, employee benefits, and overhead.
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In addition to filing its proposed rule changes and any amendments
thereto with the Commission, a respondent is also required to post each
of its proposals and any amendments thereto, on its website. This
process takes approximately 0.5 hours to complete per proposal and 0.5
hours per amendment. Thus, for approximately 2 responses and 0
amendments,\7\ the total annual reporting burden on a respondent to
post these on its website is 1 hour ((2 proposals per year x 0.5 hours
per filing) + (0 amendments x 0.5 hours)). Further, a respondent is
required to update its rulebook, which it maintains on its website, to
reflect the changes that it makes in each proposal and any amendment
thereto. Thus, for all filings that were not withdrawn by a respondent
(0 withdrawn filings in calendar years 2017-2019) or disapproved by the
Commission (0 disapproved filings in calendar years 2017-2019), a
respondent was required to update its online rulebook to reflect the
effectiveness of 2 filings on average, each of which takes
approximately 4 hours to complete per proposal. Thus, the total annual
reporting burden for updating an online rulebook is 8 hours ((2 filings
per year-0 withdrawn filings-0 disapproved filings) x 4 hours).
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\7\ See supra note 4.
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Compliance with Rule 19b-7 is mandatory. Information received in
response to Rule 19b-7 is not kept confidential; the information
collected is public information.
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: David Bottom, Director/
Chief Information Officer, Securities and Exchange Commission, c/o
Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or send an email
to: [email protected].
Dated: July 2, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-14747 Filed 7-8-20; 8:45 am]
BILLING CODE 8011-01-P