[Federal Register Volume 85, Number 160 (Tuesday, August 18, 2020)]
[Notices]
[Pages 50844-50845]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18002]


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SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; Comment Request

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

Extension:
    Rule 15g-2, SEC File No. 270-381, OMB Control No. 3235-0434

    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'') is soliciting comments on the collection of 
information provided for in Rule 15g-2 (17 CFR 240.15g-2) 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 (``OMB'') for 
extension and approval.
    Rule 15g-2 (The ``Penny Stock Disclosure Rule'') requires broker-
dealers to provide their customers with a risk disclosure document, as 
set forth in Schedule 15G, prior to their first non-exempt transaction 
in a ``penny stock.'' As amended, the rule requires broker-dealers to 
obtain written acknowledgement from the customer that he or she has 
received the required risk disclosure document. The amended rule also 
requires broker-dealers to maintain a copy of the customer's written 
acknowledgement for at least three years following the date on which 
the risk disclosure document was provided to the customer, the first 
two years in an accessible place. Rule 15g-2 also requires a broker-
dealer, upon request of a customer, to furnish the customer with a copy 
of certain information set forth on the Commission's website.
    The risk disclosure documents are for the benefit of the customers, 
to assure that they are aware of the risks of trading in ``penny 
stocks'' before they enter into a transaction. The risk disclosure 
documents are maintained by the broker-dealers and may be reviewed 
during the course of an examination by the Commission.
    The Commission estimates that approximately 182 broker-dealers are 
engaged in penny stock transactions and that each of these firms 
processes an average of three new customers for penny stocks per week. 
The Commission further estimates that half of the broker-dealers send 
the penny stock disclosure documents by mail, and the other half send 
them through electronic means such as email. Because the Commission 
estimates the copying and mailing of the penny stock disclosure 
document takes two minutes, this means that there is an annual burden 
of 28,392 minutes, or 473 hours, for this third-party disclosure burden 
of mailing documents. Additionally, because the Commission estimates 
that sending the penny stock disclosure document electronically takes 
one minute, the annual burden is 14,196 minutes, or 237 hours, for this 
third-party disclosure burden of emailing documents.
    Broker-dealers also incur a recordkeeping burden of approximately 
two minutes per response when filing the completed penny stock 
disclosure documents as required pursuant to the Rule 15g-2(c), which 
means that the respondents incur an aggregate recordkeeping burden of 
56,784 minutes, or 946 hours.
    Furthermore, Rule 15g-2(d) requires a broker-dealer, upon request 
of a customer, to furnish the customer with a copy of certain 
information set forth on the Commission's website, which

[[Page 50845]]

takes a respondent no more than two minutes per customer. Because the 
Commission estimates that a quarter of customers who are required to 
receive the Rule 15g-2 disclosure document will request that their 
broker-dealer provide them with the additional microcap and penny stock 
information posted on the Commission's website, the Commission 
therefore estimates that each broker-dealer respondent processes 
approximately 39 requests for paper copies of this information per year 
or an aggregate total of 78 minutes per respondent, which amounts to an 
annual burden of 14,196 minutes, or 237 hours.
    The Commission does not maintain the risk disclosure document. 
Instead, it must be retained by the broker-dealer for at least three 
years following the date on which the risk disclosure document was 
provided to the customer, the first two years in an accessible place. 
The collection of information required by the rule is mandatory. The 
risk disclosure document is otherwise governed by the internal policies 
of the broker-dealer regarding confidentiality, etc.
    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 will 
have practical utility; (b) the accuracy of the agency's estimate of 
the burden of the 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: August 13, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-18002 Filed 8-17-20; 8:45 am]
BILLING CODE 8011-01-P


