
[Federal Register Volume 79, Number 22 (Monday, February 3, 2014)]
[Notices]
[Pages 6236-6238]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-02143]


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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 Investor Education and Advocacy, Washington, DC 
20549-0213.

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'') has submitted to the Office of Management 
and Budget (``OMB'') a request for extension of the

[[Page 6237]]

previously approved collection of information discussed below.
    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. The 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 required to establish written standards for granting access 
to its system. In addition, such alternative trading system is required 
to make and keep records of all grants of access including, for all 
subscribers, the reasons for granting such access, and all denials or 
limitations of access and reasons, for each applicant, for denying or 
limiting access. Regulation ATS requires alternative trading systems to 
preserve any records made in the process of complying with the 
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 
Regulation ATS 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 oversee the securities 
markets.
    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 will be 
approximately 95 respondents.
    An estimated 95 respondents will file an average total of 598 
responses per year, which corresponds to an estimated aggregated annual 
response burden of 2,872.50 hours (comprised of 2,156 hours 
professional labor and 716.5 hours para-professional labor). At an 
average cost per burden hour of approximately $379 for professional 
labor and $63 for para-professional labor, the resultant total related 
cost of compliance for these respondents is $862,263.50 per year 
((2,156 professional burden hours multiplied by $379 = $817,124) plus 
(716.5 para-professional burden hours multiplied by $63 = $45,139.50).
    An estimated 7 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 140 hours (7 responses x 20 hours = 140 
hours). The total cost of compliance for the annual burden is $37,576 
($379 x 13 hours per response + $63 x 7 hours per response = $5,368 per 
response; $5,368 x 7 responses = $37,576).
    An estimated 95 respondents will file an estimated two periodic 
amendments to their initial operation report on Form ATS each year, an 
estimated total of 190 amendments. The Commission estimates that the 
average compliance burden for each amendment would be 6 hours, 
comprising 4.5 hours of in-house professional work and 1.5 hours of 
clerical work. Thus, the total compliance burden per year is 1,140 
hours (190 responses x 6 hours = 1,140 hours). The total cost of 
compliance for the annual burden is $342,000 ($379 x 4.5 hours per 
response + $63 x 1.5 hours per response = $1,800 per response; $1,800 x 
190 responses = $342,000).
    An estimated 95 respondents will file four quarterly reports on 
Form ATS-R each year for an estimated total of 380 responses. The 
Commission estimates that that the average compliance burden for each 
filing 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 1,520 hours (380 responses x 4 hours = 1,520 hours). The total 
cost of compliance for the annual burden is $456,000 ($379 x 3 hours 
per response + $63 x 1 hours per response = $1,200 per response; $1,200 
x 380 responses = $456,000).
    An estimated 5 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 10 hours 
(5 responses x 2 hours = 10 hours). The total cost of compliance for 
the annual burden is $3,000 ($379 x 1.5 hours per response + $63 x 0.5 
hours per response = $600 per response; $600 x 5 responses = $3,000).
    An estimated 2 respondents will meet certain volume thresholds 
requiring them to establish written standards for granting access to 
their systems. The Commission estimates that the average compliance 
burden for each response would be 10 hours of in-house professional 
work at $379 per hour. Thus, the total compliance burden per year is 20 
hours (2 responses x 10 hours = 20 hours). The total cost of compliance 
for the annual burden is $7,580 ($379 x 10 hours per response x 2 
responses = $7,580).
    An estimated 2 respondents will meet certain volume thresholds 
requiring them to make and keep records of (1) all grants of access 
including, for all subscribers, the reasons for granting such access; 
and (2) all denials or limitations of access and reasons, for each 
applicant, for denying or limiting access. The Commission estimates 
that the average compliance burden for each response would be 10 hours 
of in-house professional work at $379 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 $7,580 
($379 x 10 hours per response x 2 respondents = $7,580).
    An estimated 2 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

[[Page 6238]]

Commission estimates that the average compliance burden for each 
response would be 10 hours of in-house professional work at $379 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 $7,580 ($379 x 10 hours per response x 2 
respondents = $7,580).
    An estimated 2 respondents will meet certain volume thresholds 
requiring them to provide a notice to the Commission to report any 
system 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 
0.25 hours of in-house professional work at $379 per hour. Thus, the 
total compliance burden per year is 2.5 hours (2 respondents x 5 
responses each x 0.25 hours = 2.5 hours). The total cost of compliance 
for the annual burden is $947.50 ($379 x 0.25 hours per response x 10 
responses = $947.50).
    Compliance with Rule 301 is mandatory. The information required by 
the Rule 301 is available only to the examination of the Commission 
staff, state securities authorities, and the SROs. Subject to the 
provisions of the Freedom of Information Act, 5 U.S.C. Sec.  522 
(``FOIA''), and the Commission's rules thereunder (17 CFR 
200.80(b)(4)(iii)), the Commission does not generally publish or make 
available information contained in any reports, summaries, analyses, 
letters, or memoranda arising out of, in anticipation of, or in 
connection with an examination or inspection of the books and records 
of any person or any other investigation.
    Regulation ATS requires alternative trading systems to preserve any 
records, for at least three years, made in the process of complying 
with the systems capacity, integrity, and security requirements.
    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 OMB control number.
    The public may view background documentation for this information 
collection at the following Web site: www.reginfo.gov. Comments should 
be directed to: (i) 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 email to: Shagufta_Ahmed@omb.eop.gov; and (ii) Thomas Bayer, Director/Chief Information 
Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 
F Street NE., Washington, DC 20549, or by sending an email to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of 
this notice.

    Dated: January 28, 2014.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-02143 Filed 1-31-14; 8:45 am]
BILLING CODE 8011-01-P


