

[Federal Register: December 4, 2006 (Volume 71, Number 232)]
[Notices]               
[Page 70444-70445]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04de06-94]                         

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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.

Extension:
    Rule 605 of Regulation NMS, SEC File No. 270-488, OMB Control 
No. 3235-0542
    Rule 606 of Regulation NMS, SEC File No. 270-489, OMB Control 
No. 3235-0541

    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 605 of Regulation NMS (17 CFR 242.605),\1\ f/k/a Rule 11Ac1-5 
(17 CFR 240.11Ac1-5), requires market centers to make available to the 
public monthly order execution reports in electronic form. The 
Commission believes that many market centers retain most, if not all, 
the underlying raw data necessary to generate these reports in 
electronic format. Once the necessary data is collected, market centers 
could either program their systems to generate the statistics and 
reports, or transfer the data to a service provider (such as an 
independent company in the business of preparing such reports or a 
self-regulatory organization (``SRO'')) that would generate the 
statistics and reports.
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    \1\ Regulation NMS, adopted by the Commission in June 2005, 
redesignated the national market system rules previously adopted 
under Section 11A of the Securities Exchange Act of 1934 (``Exchange 
Act''). Rule 11Ac1-5 under the Exchange Act was redesignated Rule 
605 of Regulation NMS, and Rule 11Ac1-6 under the Exchange Act was 
redesignated Rule 606 of Regulation NMS. No substantive amendments 
were made to Rule 605 and Rule 606 of Regulation NMS. See Securities 
Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496 (June 29, 
2005).
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    The collection of information obligations of Rule 605 apply to all 
market centers that receive covered orders in national market system 
securities. The Commission estimates that approximately 302 market 
centers are subject to the collection of information obligations of 
Rule 605. Each of these respondents is required to respond to the 
collection of information on a monthly basis.
    The Commission staff estimates that, on average, Rule 605 causes 
respondents to spend 6 hours per month in additional time to collect 
the data necessary to generate the reports, or 72 hours per year. With 
an estimated 302 market centers subject to Rule 605, the total data 
collection cost to comply with the monthly reporting requirement is 
estimated to be 21,744 hours per year.
    Rule 606 of Regulation NMS (``Rule 606'') (17 CFR 242.606), f/k/a 
Rule 11Ac1-6 (17 CFR 240.11Ac1-6), requires broker-dealers to prepare 
and disseminate quarterly order routing reports. Much of the 
information needed to generate these reports already should be 
collected by broker-dealers in connection with their periodic 
evaluations of their order routing practices. Broker-dealers must 
conduct such evaluations to fulfill the duty of best execution that 
they owe their customers.
    The collection of information obligations of Rule 606 applies to 
broker-dealers that route non-directed customer orders in covered 
securities. The Commission estimates that out of the currently 3120 
broker-dealers that are subject to the collection of information 
obligations of Rule 606, clearing brokers bear a substantial portion of 
the burden of complying with

[[Page 70445]]

the reporting and recordkeeping requirements of Rule 606 on behalf of 
small to mid-sized introducing firms. There currently are approximately 
567 clearing brokers. In addition, there are approximately 1479 
introducing brokers that receive funds or securities from their 
customers. Because at least some of these firms also may have greater 
involvement in determining where customer orders are routed for 
execution, they have been included, along with clearing brokers, in 
estimating the total burden of Rule 606.
    The Commission staff estimates that each firm significantly 
involved in order routing practices incurs an average burden of 40 
hours to prepare and disseminate a quarterly report required by Rule 
606, or a burden of 160 hours per year. With an estimated 2046 broker-
dealers significantly involved in order routing practices, the total 
burden per year to comply with the quarterly reporting requirement in 
Rule 606 is estimated to be 327,360 hours.
    Rule 606 requires broker-dealers to respond to individual customer 
requests for information on orders handled by the broker-dealer for 
that customer. Clearing brokers generally bear the burden of responding 
to these requests. The Commission staff estimates that an average 
clearing broker incurs an annual burden of 400 hours (2000 responses x 
0.2 hours/response) to prepare, disseminate, and retain responses to 
customers required by Rule 606. With an estimated 567 clearing brokers 
subject to Rule 606, the total burden per year to comply with the 
customer response requirement in Rule 606 is estimated to be 226,800 
hours.
    The collection of information obligations imposed by Rule 605 and 
Rule 606 are mandatory. The response will be available to the public 
and will not be kept confidential. An agency may not conduct or 
sponsor, and a person is not required to comply with, a collection of 
information unless it displays a currently valid OMB control number.
    General comments regarding the estimated burden hours should be 
directed to the following persons: (1) 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 sending an 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 send an e-
mail to: PRA_Mailbox@sec.gov. Comments must be submitted within 30 
days of this notice.

    Dated: November 20, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6-20431 Filed 12-1-06; 8:45 am]

BILLING CODE 8011-01-P
