Notice2023-19853
Proposed Collection; Comment Request; Extension: Rule 15g-2
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 14, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 177 (Thursday, September 14, 2023)</title>
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[Federal Register Volume 88, Number 177 (Thursday, September 14, 2023)]
[Notices]
[Page 63173]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-19853]
[[Page 63173]]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-381, OMB Control No. 3235-0434]
Proposed Collection; Comment Request; Extension: Rule 15g-2
Upon Written Request, Copies Available From: U.S. 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 (44 U.S.C. 3501 et seq.) (``PRA''), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the collection of
information provided for in Rule 15g-2 (17 CFR 240.15g-2) 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.
Rule 15g-2 (The ``Penny Stock Disclosure Rule'') requires broker-
dealers to provide their customers with a risk disclosure document, as
set forth in Schedule 15G, prior to their first non-exempt transaction
in a ``penny stock.'' As amended, the rule requires broker-dealers to
obtain written acknowledgement from the customer that he or she has
received the required risk disclosure document. The amended rule also
requires broker-dealers to maintain a copy of the customer's written
acknowledgement for at least three years following the date on which
the risk disclosure document was provided to the customer, the first
two years in an accessible place. Rule 15g-2 also requires a broker-
dealer, upon request of a customer, to furnish the customer with a copy
of certain information set forth on the Commission's website.
The risk disclosure documents are for the benefit of the customers,
to assure that they are aware of the risks of trading in ``penny
stocks'' before they enter into a transaction. The risk disclosure
documents are maintained by the broker-dealers and may be reviewed
during the course of an examination by the Commission.
The Commission estimates that approximately 175 broker-dealers are
engaged in penny stock transactions and that each of these firms
processes an average of three new customers for penny stocks per week.
The Commission further estimates that half of the broker-dealers send
the penny stock disclosure documents by mail, and the other half send
them through electronic means such as email. Because the Commission
estimates the copying and mailing of the penny stock disclosure
document takes two minutes, this means that there is an annual burden
of 27,456 minutes, or 457 hours, for this third-party disclosure burden
of mailing documents. Additionally, because the Commission estimates
that sending the penny stock disclosure document electronically takes
one minute, the annual burden is 13,728 minutes, or 229 hours, for this
third-party disclosure burden of emailing documents.
Broker-dealers also incur a recordkeeping burden of approximately
two minutes per response when filing the completed penny stock
disclosure documents as required pursuant to the Rule 15g-2(c), which
means that the respondents incur an aggregate recordkeeping burden of
54,600 minutes, or 910 hours.
Furthermore, Rule 15g-2(d) requires a broker-dealer, upon request
of a customer, to furnish the customer with a copy of certain
information set forth on the Commission's website, which takes a
respondent no more than two minutes per customer. Because the
Commission estimates that a quarter of customers who are required to
receive the Rule 15g-2 disclosure document will request that their
broker-dealer provide them with the additional microcap and penny stock
information posted on the Commission's website, the Commission
therefore estimates that each broker-dealer respondent processes
approximately 39 requests for paper copies of this information per year
or an aggregate total of 78 minutes per respondent, which amounts to an
annual burden of 13,650 minutes, or 228 hours. There was an overall
decrease in the total burden hours because the number of registered
broker-dealers the Commission estimates will be engaged in penny stock
transactions decreased from 182 to 175.
The Commission does not maintain the risk disclosure document.
Instead, it must be retained by the broker-dealer for at least three
years following the date on which the risk disclosure document was
provided to the customer, the first two years in an accessible place.
The collection of information required by the rule is mandatory. The
risk disclosure document is otherwise governed by the internal policies
of the broker-dealer regarding confidentiality, etc.
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#9fcfcddec0d2fef6f3fdf0e7dfecfafcb1f8f0e9"><span class="__cf_email__" data-cfemail="d38381928c9eb2babfb1bcab93a0b6b0fdb4bca5">[email protected]</span></a>.
Dated: September 8, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-19853 Filed 9-13-23; 8:45 am]
BILLING CODE 8011-01-P
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