Notice2023-19790
Proposed Collection; Comment Request; Extension: Rule 15g-9
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
September 13, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 176 (Wednesday, September 13, 2023)</title>
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[Federal Register Volume 88, Number 176 (Wednesday, September 13, 2023)]
[Notices]
[Page 62831]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-19790]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-325, OMB Control No. 3235-0385]
Proposed Collection; Comment Request; Extension: Rule 15g-9
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 15g-9 (17 CFR 240.15g-9)
(the ``Rule''), under the Securities Exchange Act of 1934 (15 U.S. C.
78a et seq.) (the ``Exchange Act''). The Commission plans to submit
this existing collection of information to the Office of Management and
Budget (``OMB'') for extension and approval.
Section 15(c)(2) of the Exchange Act (15 U.S.C. authorizes the
Commission to promulgate rules that prescribe means reasonably designed
to prevent fraudulent, deceptive, or manipulative practices in
connection with over-the-counter (``OTC'') securities transactions.
Pursuant to this authority, the Commission in 1989 adopted Rule 15c2-6,
which was subsequently redesignated as Rule 15g-9, 17 CFR 240.15g-9.
The Rule requires broker-dealers to produce a written suitability
determination for, and to obtain a written customer agreement to,
certain recommended transactions in penny stocks that are not
registered on a national securities exchange, and whose issuers do not
meet certain minimum financial standards. The Rule is intended to
prevent the indiscriminate use by broker-dealers of fraudulent, high
pressure telephone sales campaigns to sell penny stocks to
unsophisticated customers.
The Commission staff estimates that approximately five percent of
registered broker-dealers, or 175 broker-dealers,\1\ are subject to the
Rule (5% x approximately 3,497 registered broker-dealers = 175 broker-
dealers). As indicated above, the burden of the Rule on a respondent
varies widely depending on the frequency with which new customers are
solicited. On average, for all respondents, the staff has estimated
that respondents process three new customers per week, or approximately
156 new customers requiring suitability determinations per year. We
also estimate that a broker-dealer would take approximately one-half
hour per new customer in obtaining, reviewing, and processing
(including transmitting to the customer) the information required by
Rule 15g-9, and each respondent would consequently spend 78 hours
annually (156 new customers x .5 hours) obtaining the information
required in the Rule. This would result in 27,300 annual responses per
year for all respondents (175 respondents x 156 new customer
suitability determinations per year). We determined, based on the
estimate of 175 broker-dealer respondents, that the annual hour burden
of Rule 15g-9 is 13,650 hours (175 respondents x 78 hours).
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\1\ As of July 1, 2023, there are 3,497 registered broker-
dealers. 5% of 3,497 is 174.85, rounded up to 175.
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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 by
November 13, 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#7e2e2c3f21331f17121c11063e0d1b1d50191108"><span class="__cf_email__" data-cfemail="e9b9bba8b6a48880858b8691a99a8c8ac78e869f">[email protected]</span></a>.
Dated: September 8, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-19790 Filed 9-12-23; 8:45 am]
BILLING CODE 8011-01-P
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