
[Federal Register Volume 88, Number 220 (Thursday, November 16, 2023)]
[Notices]
[Pages 78800-78801]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-25355]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-325, OMB Control No. 3235-0385]


Submission for OMB Review; Comment Request; Extension: Rule 15g-9

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

    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 (``Commission'') has submitted to the Office of 
Management and Budget (``OMB'') a request for extension of the 
previously approved collection of information discussed below.
    Section 15(c)(2) of the Securities Exchange Act of 1934 (15 U.S.C. 
78a et seq.) (the ``Exchange Act'') authorizes the Commission to 
promulgate rules that prescribe means reasonably designed to prevent 
fraudulent, deceptive, or manipulative practices in connection with 
over-the-counter (``OTC'') securities transactions. Pursuant to this 
authority, the Commission in 1989 adopted Rule 15c2-6, which was 
subsequently redesignated as Rule 15g-9 (17 CFR 240.15g-9) (the 
``Rule''). The Rule requires broker-dealers to produce a written 
suitability determination for, and to obtain a written customer 
agreement to, certain recommended transactions in penny stocks that are 
not registered on a national securities exchange, and whose issuers do 
not meet certain minimum financial standards. The Rule is intended to 
prevent the indiscriminate use by broker-dealers of fraudulent, high 
pressure telephone sales campaigns to sell penny stocks to 
unsophisticated customers.
    The Commission staff estimates that approximately five percent of 
registered broker-dealers, or 175 broker-dealers,\1\ are subject to the 
Rule (5% x approximately 3,497 registered broker-dealers = 175 broker-
dealers). As indicated above, the burden of the Rule on a respondent 
varies widely depending on the frequency with which new customers are 
solicited. On average, for all respondents, the staff has estimated 
that respondents process three new customers per week, or approximately 
156 new customers

[[Page 78801]]

requiring suitability determinations per year. We also estimate that a 
broker-dealer would take approximately one-half hour per new customer 
in obtaining, reviewing, and processing (including transmitting to the 
customer) the information required by Rule 15g-9, and each respondent 
would consequently spend 78 hours annually (156 new customers x .5 
hours) obtaining the information required in the Rule. This would 
result in 27,300 annual responses per year for all respondents (175 
respondents x 156 new customer suitability determinations per year). We 
determined, based on the estimate of 175 broker-dealer respondents, 
that the annual hour burden of Rule 15g-9 is 13,650 hours (175 
respondents x 78 hours).
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    \1\ As of July 1, 2023, there are 3,497 registered broker-
dealers. 5% of 3,497 is 174.85, rounded up to 175.
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    The broker-dealer must keep the written suitability determination 
and customer agreement required by the Rule for at least three years. 
Completing the suitability determination and obtaining the customer 
agreement in writing is mandatory for broker-dealers who effect 
transactions in penny stocks and do not qualify for an exemption, but 
does not involve the collection of confidential information.
    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.
    The public may view background documentation for this information 
collection at the following website: www.reginfo.gov. Find this 
particular information collection by selecting ``Currently under 30-day 
Review--Open for Public Comments'' or by using the search function. 
Written comments and recommendations for the proposed information 
collection should be sent by December 18, 2023 to (i) www.reginfo.gov/public/do/PRAMain and (ii) David Bottom, Director/Chief Information 
Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F 
Street NE, Washington, DC 20549, or by sending an email to: 
[email protected].

    Dated: November 13, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-25355 Filed 11-15-23; 8:45 am]
BILLING CODE 8011-01-P


