Notice2023-25355
Submission for OMB Review; 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
November 16, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 88 Issue 220 (Thursday, November 16, 2023)</title>
</head>
<body><pre>
[Federal Register Volume 88, Number 220 (Thursday, November 16, 2023)]
[Notices]
[Pages 78800-78801]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-25355]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-325, OMB Control No. 3235-0385]
Submission for OMB Review; 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 (44 U.S.C. 3501 et seq.) (``PRA''), the Securities and
Exchange Commission (``Commission'') has submitted to the Office of
Management and Budget (``OMB'') a request for extension of the
previously approved collection of information discussed below.
Section 15(c)(2) of the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.) (the ``Exchange Act'') 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''). 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
[[Page 78801]]
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).
---------------------------------------------------------------------------
\1\ As of July 1, 2023, there are 3,497 registered broker-
dealers. 5% of 3,497 is 174.85, rounded up to 175.
---------------------------------------------------------------------------
The broker-dealer must keep the written suitability determination
and customer agreement required by the Rule for at least three years.
Completing the suitability determination and obtaining the customer
agreement in writing is mandatory for broker-dealers who effect
transactions in penny stocks and do not qualify for an exemption, but
does not involve the collection of confidential information.
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.
The public may view background documentation for this information
collection at the following website: <a href="http://www.reginfo.gov">www.reginfo.gov</a>. Find this
particular information collection by selecting ``Currently under 30-day
Review--Open for Public Comments'' or by using the search function.
Written comments and recommendations for the proposed information
collection should be sent by December 18, 2023 to (i) <a href="http://www.reginfo.gov/public/do/PRAMain">www.reginfo.gov/public/do/PRAMain</a> and (ii) David Bottom, Director/Chief Information
Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F
Street NE, Washington, DC 20549, or by sending an email to:
<a href="/cdn-cgi/l/email-protection#3c6c6e7d63715d55505e53447c4f595f125b534a"><span class="__cf_email__" data-cfemail="47171506180a262e2b25283f0734222469202831">[email protected]</span></a>.
Dated: November 13, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-25355 Filed 11-15-23; 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 November 16, 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.