
[Federal Register: November 1, 2010 (Volume 75, Number 210)]
[Notices]               
[Page 67150-67152]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01no10-67]                         

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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 301 and Forms ATS and ATS-R; SEC File No. 270-451; OMB 
Control No. 3235-0509.

    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.
    Regulation ATS provides a regulatory structure for alternative 
trading systems. Regulation ATS allows an alternative trading system to 
choose between registering as a broker-dealer and complying with 
Regulation ATS, or registering as a national securities exchange. 
Regulation ATS provides the regulatory framework for those alternative 
trading systems that choose to be regulated as broker-dealers. Rule 301 
of Regulation ATS contains certain notice and reporting requirements, 
as well as additional obligations that apply only to alternative 
trading systems with significant volume. Rule 301 describes the 
conditions with which an alternative trading system must comply to be 
registered as a broker-dealer. The

[[Page 67151]]

Rule requires all alternative trading systems that wish to comply with 
Regulation ATS to file an initial operation report on Form ATS. The 
initial operation report requires information regarding operation of 
the system including the method of operation, access criteria and the 
types of securities traded. Alternative trading systems are also 
required to supply updates on Form ATS to the Commission, describing 
material changes to the system, and quarterly transaction reports on 
Form ATS-R. Alternative trading systems are also required to file 
cessation of operations reports on Form ATS.
    An alternative trading system with significant volume is required 
to comply with requirements for fair access and systems capacity, 
integrity and security. Under Rule 301, such alternative trading system 
is also required to establish standards for granting access to trading 
on its system. In addition, upon a decision to deny or limit an 
investor's access to the system, an alternative trading system is 
required to provide notice to a user of the denial or limitation and 
its right to an appeal to the Commission. Regulation ATS requires 
alternative trading systems to preserve any records made in the process 
of complying with the systems' capacity, integrity and security 
requirements. In addition, such alternative trading systems are 
required to notify Commission staff of material systems outages and 
significant systems changes.
    The Commission uses the information provided pursuant to the Rule 
to monitor the growth and development of alternative trading systems, 
and to monitor whether the systems promote fair and orderly securities 
markets and operate in a manner that is consistent with the federal 
securities laws. In particular, the information collected and reported 
to the Commission by alternative trading systems enables the Commission 
to evaluate the operation of alternative trading systems with regard to 
national market system goals, and monitor the competitive effects of 
these systems to ascertain whether the regulatory framework remains 
appropriate to the operation of such systems. Without the information 
provided on Forms ATS and ATS-R, the Commission would not have readily 
available information on a regular basis in a format that would allow 
it to determine whether such systems have adequate safeguards.
    Respondents consist of alternative trading systems that choose to 
register as broker-dealers and comply with the requirements of 
Regulation ATS. The Commission estimates that there are currently 
approximately 80 respondents.
    An estimated 80 respondents will file an average total of 552 
responses per year, which corresponds to an estimated aggregated annual 
response burden of 1,792.5 hours (comprised of 1,356 hours professional 
labor and 436.5 hours para-professional labor). At an average cost per 
burden hour of approximately $316 for professional labor and $59 for 
para-professional labor, with an additional 35% of labor costs added to 
account for overhead costs such as printing, copying, and postage, the 
resultant total related cost of compliance for these respondents is 
$613,236.82 per year ((1,356 professional burden hours multiplied by 
$316) plus (436.5 para-professional burden hours multiplied by $59) 
equals $454,249.50; plus 35% for overhead costs ($158,987.32) equals 
$613,236.82; figures may vary slightly due to arithmetic rounding).
    An estimated 5 respondents will commence operations as an ATS each 
year, necessitating the filing of an initial operation report on Form 
ATS. The Commission estimates that the average compliance burden for 
each respondent would be 20 hours, comprising 13 hours of in-house 
professional work and 7 hours of clerical work. Thus, the total 
compliance burden per year is 100 hours (5 responses x 20 hours = 100 
hours). The total cost of compliance for the annual burden is $22,605 
($316 x 13 hours per response + $59 x 7 hours per response = $4,521 per 
response; $4,521 x 5 responses = $22,605). In addition, estimated 
overhead costs for printing, copying, and postage equal to 35% of the 
value of labor costs amount to $1,582.35 per respondent ($4,521 times 
35%). Thus, the Commission estimates the total annualized cost burden 
would be $7,911.75 ($1,582.35 x 5 respondents).
    An estimated 80 respondents will file an estimated two periodic 
amendments to their initial operation report on Form ATS each year, an 
estimated total of 160 responses. The Commission estimates that the 
average compliance burden for each response would be 2 hours, 
comprising 1.5 hours of in-house professional work and 0.5 hours of 
clerical work. Thus, the total compliance burden per year is 320 hours 
(160 responses x 2 hours = 320 hours). The total cost of compliance for 
the annual burden is $1,007 ($316 x 1.5 hours per response + $59 x 0.5 
hours per response = $503.50 per response; $503.50 x 160 responses = 
$80,560). In addition, estimated overhead costs for printing, copying, 
and postage equal to 35% of the value of labor costs amount to $176.23 
per response ($503.50 times 35%). Thus, the Commission estimates the 
annualized cost burden for each respondent would be $352.46 ($176.23 x 
2 responses per respondent) and the total annualized cost burden for 
all respondents would be $28,196.80 ($176.23 x 80 respondents x 2 
responses per respondent).
    An estimated 80 respondents will file four quarterly reports on 
Form ATS-R each year for an estimated total of 320 responses. The 
Commission estimates that that the average compliance burden for each 
response would be 4 hours, comprising 3 hours of in-house professional 
work and 1 hour of clerical work. Thus, the total compliance burden per 
year is 1,280 hours (320 responses x 4 hours = 1,280 hours). The total 
cost of compliance for the annual burden is $322,240 ($316 x 3 hours 
per response + $59 x 1 hours per response = $1,007 per response; $1,007 
x 320 responses = $322,240). In addition, estimated overhead costs for 
printing, copying, and postage equal to 35% of the value of labor costs 
amount to $352.45 per response ($1,007 times 35%). Thus, the Commission 
estimates the annualized cost burden for each respondent would be 
$1409.80 ($352.45 x 4 responses per respondent) and the total 
annualized cost burden for all respondents would be $112,784 ($352.45 x 
80 respondents x 4 responses per respondent).
    An estimated three respondents will be required to file a cessation 
of operations report on Form ATS each year. The Commission estimates 
that the average compliance burden for each response would be 2 hours, 
comprising 1.5 hours of in-house professional work and 0.5 hours of 
clerical work. Thus, the total compliance burden per year is 6 hours (3 
responses x 2 hours = 6 hours). The total cost of compliance for the 
annual burden is $1,510.50 ($316 x 1.5 hours per response + $59 x 0.5 
hours per response = $503.50 per response; $503.50 x 3 responses = 
$1,510.50). In addition, estimated overhead costs for printing, 
copying, and postage equal to 35% of the value of labor costs amount to 
$176.23 per respondent ($503.5 x 35%). Thus, the Commission estimates 
the total annualized cost burden would be $528.69 ($176.23 x 3 
respondents).
    An estimated two respondents will meet certain volume thresholds 
requiring them to establish standards for granting access on its 
trading system. The Commission estimates that the average compliance 
burden for each response would be 5 hours of in-house professional work 
at $316 per hour. Thus, the total compliance burden per year is 10 
hours (2 responses x 5 hours

[[Page 67152]]

= 10 hours). The total cost of compliance for the annual burden is 
$3,160 ($316 x 5 hours per response x 2 responses = $3,160). In 
addition, estimated overhead costs for printing, copying, and postage 
equal to 35% of the value of labor costs amount to $553 per response 
($1,580 x 35%). Thus, the Commission estimates the total annualized 
cost burden would be $1,106 ($553 x 2 respondents).
    An estimated two respondents will meet certain volume thresholds 
requiring them to provide notice to any user upon any decision to deny 
or limit that user's access to the system, and these notice obligations 
will be triggered an estimated 27 x per year for each respondent. The 
Commission estimates that the average compliance burden for each 
response would be 1 hour of in-house professional work at $316 per 
hour. Thus, the total compliance burden per year is 54 hours (2 
respondents x 27 responses each x 1 hour = 54 hours). The total cost of 
compliance for the annual burden is $17,064 ($316 x 1 hour per response 
x 54 responses = $17,064). In addition, estimated overhead costs for 
printing, copying, and postage equal to 35% of the value of labor costs 
amount to $110.60 per response ($316 x 35%). Thus, the Commission 
estimates the annualized cost burden for each respondent would be 
$2986.20 ($110.60 x 27 responses per respondent) and the total 
annualized cost burden for all respondents would be $5972.40 ($110.60 x 
2 respondents x 27 responses per respondent).
    An estimated two respondents will meet certain volume thresholds 
requiring them to keep records relating to any steps taken to comply 
with systems capacity, integrity, and security requirements under Rule 
301. The Commission estimates that the average compliance burden for 
each response would be 10 hours of in-house professional work at $316 
per hour. Thus, the total compliance burden per year is 20 hours (2 
respondents x 10 hours = 20 hours). The total cost of compliance for 
the annual burden is $6,320 ($316 x 20 hours = $6,320). In addition, 
estimated overhead costs for printing, copying, and postage equal to 
35% of the value of labor costs amount to $1,106 per response ($3,160 x 
35%). Thus, the Commission estimates the total annualized cost burden 
would be $2,212 ($1,106 x 2 respondents).
    An estimated two respondents will meet certain volume thresholds 
requiring them to provide a notice to the Commission to report any 
systems outages, and these notice obligations will be triggered an 
estimated 5 times per year for each respondent. The Commission 
estimates that the average compliance burden for each response would be 
.25 hours of in-house professional work at $316 per hour. Thus, the 
total compliance burden per year is 2.5 hours (2 respondents x 5 
responses each x .25 hours = 2.5 hours). The total cost of compliance 
for the annual burden is $790 ($316 x .25 hours per response x 10 
responses = $790). In addition, estimated overhead costs for printing, 
copying, and postage equal to 35% of the value of labor costs amount to 
$27.65 per response ($79 x 35%). Thus, the Commission estimates the 
annualized cost burden for each respondent would be $138.25 ($27.65 x 5 
responses per respondent) and the total annualized cost burden for all 
respondents would be $276.50 ($27.65 x 2 respondents x 5 responses per 
respondent).
    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 shall have 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 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.
    Please direct your written comments to: Jeffrey Heslop, Acting 
Chief Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 6432 General Green Way, Alexandria, Virginia 22312 or 
send an e-mail to: PRA_Mailbox@sec.gov.

    Dated: October 25,2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-27468 Filed 10-29-10; 8:45 am]
BILLING CODE 8011-01-P

