

[Federal Register: July 25, 2006 (Volume 71, Number 142)]
[Notices]               
[Page 42140-42141]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25jy06-114]                         

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SECURITIES AND EXCHANGE COMMISSION

 
Proposed Collection; Comment Request

Upon written request, copies available from: Securities and Exchange 
Commission, Office of Filings and Information Services, Washington, DC 
20549.

Extension: Rule 17a-11; SEC File No. 270-94; OMB Control No. 3235-
0085.

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange 
Commission (``Commission'') is soliciting comments on the collection of 
information summarized below. The Commission plans to submit this 
existing collection of information to the Office of Management and 
Budget for extension and approval.
    In response to an operational crisis in the securities industry 
between 1967 and 1970, the Securities and Exchange Commission 
(``Commission'') adopted Rule 17a-11 (17 CFR 240.17a-11) under the 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) (``Exchange 
Act'') on July 11, 1971. The Rule requires broker-dealers that are 
experiencing financial or operational difficulties to provide notice to 
the Commission, the broker-dealer's designated examining authority 
(``DEA''), and the Commodity Futures Trading Commission (``CFTC'') if 
the broker-dealer is registered with the CFTC as a futures commission 
merchant. Rule 17a-11 is an integral part of the Commission's financial 
responsibility program which enables the Commission, a broker-dealer's 
DEA, and the CFTC to increase surveillance of a broker-dealer 
experiencing difficulties and to obtain any additional information 
necessary to gauge the broker-dealer's financial or operational 
condition.
    Rule 17a-11 also requires over-the-counter (``OTC'') derivatives 
dealers and broker-dealers that are permitted to compute net capital 
pursuant to Appendix E to Exchange Act Rule 15c3-1 to notify the 
Commission when their tentative net capital drops below certain levels. 
OTC derivatives dealers must also provide notice to the Commission of 
backtesting exceptions identified pursuant to Appendix F of Rule 15c3-1 
(17 CFR 240.15c3-1f).
    Compliance with the Rule is mandatory. The Commission will 
generally not publish or make available to any person notice or reports 
received pursuant to Rule 17a-11. The Commission believes that 
information obtained under Rule 17a-11 relates to a condition report 
prepared for the use of the Commission, other federal governmental 
authorities, and securities industry self-regulatory organizations 
responsible for the regulation or supervision of financial 
institutions.
    Only broker-dealers whose capital declines below certain specified 
levels or who are otherwise experiencing financial or operational 
problems have a reporting burden under Rule 17a-11. In 2005, the 
Commission received approximately 600 notices under this Rule. The 
Commission did not receive any Rule 17a-11 notices from OTC derivatives 
dealers or broker-dealers that are permitted to compute net capital 
pursuant to Appendix E to Exchange Act Rule 15c3-1.
    Each broker-dealer reporting pursuant to Rule 17a-11 will spend 
approximately one hour preparing and transmitting the notice required 
by the rule. Accordingly, the total estimated annualized burden under 
Rule 17a-11 is 600 hours.
    Written comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information has 
practical utility; (b) the accuracy of the agency's estimate of the 
burden of the proposed collection of information; (c) ways to enhance 
the quality, utility, and clarity of the information to be 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.
    Comments should be directed to: R. Corey Booth, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Shirley 
Martinson, 6432 General Green Way, Alexandria, VA 22312, or by e-mail 
to PRA_Mailbox@sec.gov. Comments must be submitted to the Office of 
Management and Budget within 60 days of this notice.


[[Page 42141]]


    Dated: July 17, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6-11791 Filed 7-24-06; 8:45 am]

BILLING CODE 8010-01-P
