

[Federal Register: November 9, 2006 (Volume 71, Number 217)]
[Notices]               
[Page 65843]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09no06-138]                         

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SECURITIES AND EXCHANGE COMMISSION

 
Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of Filings and Information Services, Washington, 
DC 20549.
    Rule 17a-5; SEC File No. 270-155; OMB Control No. 3235-0123.

    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'') has submitted to the Office of Management 
and Budget a request for extension of the previously approved 
collection of information discussed below.
    Rule 17a-5 (17 CFR 240.17a-5) is the basic financial reporting rule 
for brokers and dealers.\1\ The Rule requires the filing of the 
Financial and Operational Combined Uniform Single Report (``FOCUS 
Report'') on Form X-17A-5 (17 CFR 240.15c3-1e), which was the result of 
years of study and comments by representatives of the securities 
industry through advisory committees and through the normal rule 
proposal methods. The FOCUS Report was designed to eliminate the 
overlapping regulatory reports required by various self-regulatory 
organizations and the Commission and to reduce reporting burdens as 
much as possible. The Rule also requires the filing of an annual 
audited report of financial statements.
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    \1\ Rule 17a-5(c) requires a broker or dealer to furnish certain 
of its financial information to customers and is subject to a 
separate PRA filing (OMB Control Number 3235-0199).
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    The FOCUS Report consists of: (1) Part I, which is a monthly report 
that must be filed by brokers or dealers that clear transactions or 
carry customer securities; (2) one of three alternative quarterly 
reports: Part II, which must be filed by brokers or dealers that clear 
transactions or carry customer securities; Part IIA, which must be 
filed by brokers or dealers that do not clear transactions or carry 
customer securities; and Part IIB, which must be filed by specialized 
broker-dealers registered with the Commission as OTC derivatives 
dealers; \2\ (3) supplemental schedules, which must be filed annually; 
and (4) a facing page, which must be filed with the annual audited 
report of financial statements. Under the Rule, a broker or dealer that 
computes certain of its capital charges in accordance with Appendix E 
to Exchange Act Rule 15c3-1 (17 CFR 240.15c3-1e) must file additional 
monthly, quarterly, and annual reports with the Commission.
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    \2\ Part IIB of Form X-17A-5 must be filed by OTC derivatives 
dealers under Exchange Act Rule 17a-12 and is subject to a separate 
PRA filing (OMB Control Number 3235-0498).
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    The variation in the size and complexity of brokers and dealers 
subject to Rule 17a-5 and the differences in the FOCUS Report forms 
that must be filed under the Rule make it difficult to calculate the 
cost of compliance. However, we estimate, on average, that each report 
will require approximately 12 hours. At year-end 2005, the Commission 
estimates that there were approximately 6,200 brokers or dealers, and 
that of those firms there were approximately 600 brokers or dealers 
that clear transactions or carry customer securities. In addition, 
approximately 400 firms filed annual reports. The Commission therefore 
estimates that approximately 600 firms filed monthly reports, 
approximately 5,600 firms filed quarterly reports, and approximately 
400 firms filed annual reports. In addition, approximately 6,200 firms 
filed annual audited reports. As a result, there were approximately 
36,200 total annual responses ((600 x 12) + (5,600 x 4) + 400 + 6,200 = 
36,200). This results in an estimated annual burden of 434,400 hours 
(36,200 annual responses x 12 hours = 434,400).
    In addition, we estimate that approximately 11 brokers or dealers 
will elect to use Appendix E to Rule 15c3-1 to compute certain of their 
capital charges (as of June 2006, five brokers or dealers have elected 
to use Appendix E). We estimate that the average amount of time 
necessary to prepare and file the additional monthly reports that must 
be filed by these firms is about 4 hours per month, or approximately 48 
hours per year; the average amount of time necessary to prepare and 
file the additional quarterly reports is about 8 hours per quarter, or 
approximately 32 hours per year; and the average amount of time 
necessary to prepare and file the additional supplemental reports with 
the annual audit required is approximately 40 hours per year. 
Consequently, we estimate that the total additional annual burden for 
these 11 brokers or dealers is approximately 1,320 hours ((48 + 32 + 
40) x 11 = 1,320).
    The Commission therefore estimates that the total annual burden 
under Rule 17a-5 is approximately 435,700 hours (434,400 + 1,320 = 
435,720, rounded to 435,700).
    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 control number.
    Comments regarding the estimated burden hours should be directed 
to: (i) The Desk Officer for the Securities and Exchange Commission, 
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Room 10102, New Executive Office Building, Washington, DC 20503 
or by e-mail to David_Rostker@omb.eop.gov; and (ii) 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 30 days of this notice.

    November 3, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6-18950 Filed 11-8-06; 8:45 am]

BILLING CODE 8011-01-P
