[Federal Register Volume 85, Number 132 (Thursday, July 9, 2020)]
[Notices]
[Pages 41258-41259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14747]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-495, OMB Control No. 3235-0553]


Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F St. NE, Washington, DC 
20549-2736.

Extension:
    Rule 19b-7 and Form 19b-7

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.) (``PRA''), the Securities and Exchange 
Commission (``SEC'' or ``Commission'') is soliciting comments on the 
existing collection of information provided for in Rule 19b-7 (17 CFR 
240.19b-7) and Form 19b-7--Filings with respect to proposed rule 
changes submitted pursuant to Section 19b(7) under the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.) (``Exchange Act''). The 
Commission plans to submit this existing collection of information to 
the Office of Management and Budget for extension and approval.
    The Exchange Act provides a framework for self-regulation under 
which various entities involved in the securities business, including 
national securities exchanges and national securities associations 
(collectively, self-regulatory organizations or ``SROs''), have primary 
responsibility for regulating their members or participants. The role 
of the Commission in this framework is primarily one of oversight; the 
Exchange Act charges the Commission with supervising the SROs and 
assuring that each complies with and advances the policies of the 
Exchange Act.
    The Exchange Act was amended by the Commodity Futures Modernization

[[Page 41259]]

Act of 2000 (``CFMA''). Prior to the CFMA, federal law did not allow 
the trading of futures on individual stocks or on narrow-based stock 
indexes (collectively, ``security futures products''). The CFMA removed 
this restriction and provided that trading in security futures products 
would be regulated jointly by the Commission and the Commodity Futures 
Trading Commission (``CFTC'').
    The Exchange Act requires all SROs to submit to the SEC any 
proposals to amend, add, or delete any of their rules. Certain entities 
(Security Futures Product Exchanges) would be notice registered 
national securities exchanges only because they trade security futures 
products. Similarly, certain entities (Limited Purpose National 
Securities Associations) would be limited purpose national securities 
associations only because their members trade security futures 
products. The Exchange Act, as amended by the CFMA, established a 
procedure for Security Futures Product Exchanges and Limited Purpose 
National Securities Associations to provide notice of proposed rule 
changes relating to certain matters.\1\ Rule 19b-7 and Form 19b-7 
implemented this procedure. Effective April 28, 2008, the SEC amended 
Rule 19b-7 and Form 19b-7 to require that Form 19b-7 be submitted 
electronically.\2\
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    \1\ These matters are higher margin levels, fraud or 
manipulation, recordkeeping, reporting, listing standards, or 
decimal pricing for security futures products; sales practices for 
security futures products for persons who effect transactions in 
security futures products; or rules effectuating the obligation of 
Security Futures Product Exchanges and Limited Purpose National 
Securities Associations to enforce the securities laws. See 15 
U.S.C. 78s(b)(7)(A).
    \2\ See Securities Exchange Act Release No. 57526 (March 19, 
2008), 73 FR 16179 (March 27, 2008).
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    The collection of information is designed to provide the Commission 
with the information necessary to determine, as required by the 
Exchange Act, whether the proposed rule change is consistent with the 
Exchange Act and the rules thereunder. The information is used to 
determine if the proposed rule change should remain in effect or 
abrogated.
    The respondents to the collection of information are SROs. Three 
respondents file an average total of approximately 2 responses per 
year.\3\ Each response takes approximately 12.5 hours to complete and 
each amendment takes approximately 3 hours to complete, which 
correspond to an estimated annual response burden of 25 hours ((2 rule 
change proposals x 12.5 hours) + (0 amendments \4\ x 3 hours)). The 
average internal cost of compliance per response is $5,050 (11.5 legal 
hours multiplied by an average hourly rate of $420 \5\ plus 1 hour of 
paralegal work multiplied by an average hourly rate of $220 \6\). The 
total resulting internal cost of compliance for a respondent is $10,100 
per year (2 responses x $5,050 per response).
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    \3\ There are currently four Security Futures Product Exchanges 
and one Limited Purpose National Securities Association, the 
National Futures Authority. However, two Security Futures Product 
Exchanges currently do not trade security futures products and, as a 
result, have not been filing proposed rule changes. Therefore, there 
are currently three respondents to Form 19b-7.
    \4\ SEC staff notes that even though no amendments were received 
in the previous three years and that staff does not anticipate the 
receipt of any amendments, calculation of amendments is a separate 
step in the calculation of the PRA burden and it is possible that 
amendments are filed in the future. Therefore, instead of removing 
the calculation altogether, staff has shown the calculation as 
anticipating zero amendments.
    \5\ The $420 per hour figure for an Attorney is from SIFMA's 
Management & Professional Earnings in the Securities Industry 2013, 
modified by Commission staff to account for inflation and an 1800-
hour work-year and then multiplied by 5.35 to account for bonuses, 
firm size, employee benefits, and overhead.
    \6\ The $220 per hour figure for a Paralegal is from SIFMA's 
Management & Professional Earnings in the Securities Industry 2013, 
modified by Commission staff to account for inflation and an 1800-
hour work-year and then multiplied by 5.35 to account for bonuses, 
firm size, employee benefits, and overhead.
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    In addition to filing its proposed rule changes and any amendments 
thereto with the Commission, a respondent is also required to post each 
of its proposals and any amendments thereto, on its website. This 
process takes approximately 0.5 hours to complete per proposal and 0.5 
hours per amendment. Thus, for approximately 2 responses and 0 
amendments,\7\ the total annual reporting burden on a respondent to 
post these on its website is 1 hour ((2 proposals per year x 0.5 hours 
per filing) + (0 amendments x 0.5 hours)). Further, a respondent is 
required to update its rulebook, which it maintains on its website, to 
reflect the changes that it makes in each proposal and any amendment 
thereto. Thus, for all filings that were not withdrawn by a respondent 
(0 withdrawn filings in calendar years 2017-2019) or disapproved by the 
Commission (0 disapproved filings in calendar years 2017-2019), a 
respondent was required to update its online rulebook to reflect the 
effectiveness of 2 filings on average, each of which takes 
approximately 4 hours to complete per proposal. Thus, the total annual 
reporting burden for updating an online rulebook is 8 hours ((2 filings 
per year-0 withdrawn filings-0 disapproved filings) x 4 hours).
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    \7\ See supra note 4.
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    Compliance with Rule 19b-7 is mandatory. Information received in 
response to Rule 19b-7 is not kept confidential; the information 
collected is public information.
    Written comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information 
shall have practical utility; (b) the accuracy of the Commission's 
estimates 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.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information under the PRA unless it 
displays a currently valid OMB control number.
    Please direct your written comments to: David Bottom, Director/
Chief Information Officer, Securities and Exchange Commission, c/o 
Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or send an email 
to: PRA_Mailbox@sec.gov.

    Dated: July 2, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-14747 Filed 7-8-20; 8:45 am]
BILLING CODE 8011-01-P


