[Federal Register Volume 63, Number 183 (Tuesday, September 22, 1998)]
[Notices]
[Page 50611]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25229]



[[Page 50611]]

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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 Filings and Information Services, Washington, DC 
20549

Existing collection in use without an OMB Number:
    Rule 8c-1, SEC File No. 270-455, OMB Control No. 3235--new

    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 requests for approval of the following rule: Rule 8c-1.
    Rule 8c-1 generally prohibits a broker-dealer from using its 
customers' securities as collateral to finance its own trading, 
speculating, or underwriting transactions. More specifically, the rule 
states three main principles: first, that a broker-dealer is prohibited 
from commingling the securities of different customers as collateral 
for a loan without the consent of each customer; second, that a broker-
dealer cannot commingle customers' securities with its own securities 
under the same pledge; and third, that a broker-dealer can only pledge 
its customers' securities to the extent that customers are in debt to 
the broker-dealer. See Securities Exchange Act Release No. 2690 
(November 15, 1940); Securities Exchange Act Release No. 9428 (December 
29, 1971). Pursuant to Rule 8c-1, respondents must collect information 
necessary to prevent the rehypothecation of customer securities in 
contravention of the rule, issue and retain copies of notices to the 
pledgee of hypothecathion of customer accounts in accordance with the 
rule, and collect written consents from customers in accordance with 
the rule. The information is necessary to ensure compliance with the 
rule, and to advise customers of the rule's protection.
    There are approximately 258 respondents per year (i.e., broker-
dealers that carry or clear customer accounts that also have bank 
loans) that require an aggregate total of 5,805 hours to comply with 
the rule. Each of these approximately 258 registered broker-dealers 
makes an estimated 45 annual responses, for an aggregate total of 
11,610 responses per year. Each response takes approximately 0.5 hours 
to complete. Thus, the total compliance burden per year is 5,805 burden 
hours. The approximate cost per hour is $20, resulting in a total cost 
of compliance for the respondents of $116,100 (5,805 hours @ $20 per 
hour).
    The retention period for the recordkeeping requirement under Rule 
8c-1 is three years. The recordkeeping requirement under this Rule is 
mandatory to ensure that broker-dealer's do not commingle their 
securities or use them to finance the broker-dealers proprietary 
business. This rule 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 unless it displays a 
currently valid control number.
    Written comments regarding the above information should be directed 
to the following persons: (i) Desk Officer for the Securities and 
Exchange Commission, Office of Information and Regulatory Affairs, 
Office of Management and Budget, Room 10202, New Executive Office 
Building, Washington, DC 20503; and (ii) Michael E. Bartell, Associate 
Executive Director, Office of Information Technology, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549. 
Comments must be submitted to OMB within 30 days of this notice.

    Dated: September 16, 1998.
Jonathan G. Katz,
Secretary.
[FR Doc. 98-25229 Filed 9-21-98; 8:45 am]
BILLING CODE 8010-01-M