Notice2023-16991
Proposed Collection; Comment Request; Extension: Rule 19b-7 and Form 19b-7
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 9, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 88 Issue 152 (Wednesday, August 9, 2023)</title>
</head>
<body><pre>
[Federal Register Volume 88, Number 152 (Wednesday, August 9, 2023)]
[Notices]
[Pages 53936-53937]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-16991]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-495, OMB Control No. 3235-0553]
Proposed Collection; Comment Request; Extension: Rule 19b-7 and
Form 19b-7
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736.
Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``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, 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 (``OMB'') 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
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\
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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 be
abrogated.
[[Page 53937]]
The respondents to the collection of information are SROs. \3\ Two
respondents file an average total of approximately 2 responses per
year. Each response takes approximately 12.5 hours to complete and each
amendment takes approximately 3 hours to complete, which corresponds to
an estimated annual response burden of 25 hours ((2 rule change
proposals x 12.5 hours) plus (0 amendments \4\ x 3 hours)). The total
industry burden for filings is 50 hours.\5\ The average internal cost
of compliance per response to file a Form 19b-7 is $5,555.\6\ The total
internal cost of compliance for a respondent is $11,110 per year and
the total industry internal cost of compliance is $22,220 per year.\7\
---------------------------------------------------------------------------
\3\ There are currently two Security Futures Product Exchanges
and one Limited Purpose National Securities Association, the
National Futures Association. One of the Security Futures Product
Exchanges, however, is conditionally exempted from filing proposed
rule changes using Form 19b-7. Therefore, there are currently two
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\ This estimate is based on 2 respondents x 25 hours per year
per respondent which equals 50 burden hours for the entire industry.
\6\ This estimate is based on 11.5 legal hours multiplied by an
average hourly rate of $462 plus 1 hour of paralegal work multiplied
by an average hourly rate of $242. The wage data is for an attorney
and paralegal respectively, from SIFMA's Management & Professional
Earnings in the Securities Industry 2013, modified by Commission
staff to account for inflation and an 1,800-hour work-year and then
multiplied by 5.35 to account for bonuses, firm size, employee
benefits, and overhead.
\7\ This estimate is based on 2 responses x $5,555 per response
equals $11,110 per respondent per year and 2 respondents x $11,110
equals $22,220 or the total industry cost per year.
---------------------------------------------------------------------------
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 no
amendments,\8\ the total annual reporting burden on a respondent to
post these on its website is 1 hour and the total industry burden per
year is 2 hours.\9\ 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 (there were 0 withdrawn
filings in calendar years 2019-2021) or disapproved by the Commission
(there were 0 disapproved filings in calendar years 2019-2021), 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. Thus, the total annual reporting
burden for updating an online rulebook is 8 hours and the total
industry burden is 16 hours.\10\
---------------------------------------------------------------------------
\8\ See supra note 4.
\9\ This estimate is based on 2 proposals per year x 0.5 hours
per filing plus 0 amendments x 0.5 hours.
\10\ This estimate is based on 2 proposals per year x 4 hours
which equals 8 hours. As noted, there were 0 withdrawn filings and 0
disapproved filings. There are 2 respondents x 8 hours per year
equals a total industry burden of 16 hours.
---------------------------------------------------------------------------
The total industry burden per year for rule changes, updating and
posting rule changes and updating the online rulebook is estimated to
be 68 burden hours.\11\ As described above, the total internal cost of
compliance for a respondent is estimated to be $11,110 per year and the
total industry internal cost of compliance is estimated to be $22,220
per year.\12\ The net change in estimated total aggregate burden hours
decreased from 102 to 68 (reduction of 34 burden hours). Similarly,
with respect to the internal dollar cost burden of respondents, the
total industry internal dollar costs has decreased overall due to one
less respondent. The total industry internal cost of compliance
decreased from $30, 300 to $22,220.
---------------------------------------------------------------------------
\11\ This estimate is the sum of the total industry (2
respondents) burden hours for rule filings (50 hours), updating and
posting rule changes (2 hours) and updating rules (16 hours).
\12\ This estimate is based on 2 responses x $5,555 per response
equals $11,110 per respondent per year and 2 respondents x $11,110
equals $22,220 or the total industry cost per year.
---------------------------------------------------------------------------
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 by
October 10, 2023.
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 OMB control number.
Please direct your written comments to: David Bottom, Director/
Chief Information Officer, Securities and Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington, DC 20549, or send an email to:
<a href="/cdn-cgi/l/email-protection#69393b2836240800050b0611291a0c0a470e061f"><span class="__cf_email__" data-cfemail="b8e8eaf9e7f5d9d1d4dad7c0f8cbdddb96dfd7ce">[email protected]</span></a>.
Dated: August 3, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-16991 Filed 8-8-23; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on August 9, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.