[Federal Register Volume 64, Number 77 (Thursday, April 22, 1999)]
[Notices]
[Pages 19833-19834]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10016]


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SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; Comment Request

    Upon Written Request, Copies Available From: Securities and 
Exchange Commission, Office of Filings and Information Services, 
Washington, DC 20549
    Extension: Rule 15g-2 [17 CFR 240.15g-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.) the Securities and Exchange Commission 
(``Commission'') is soliciting comments on the collection of 
information summarized below. The Commission plans to submit this 
existing collection of information to the Office of Management and 
Budget for extension and approval.
    The ``Penny Stock Disclosure Rules'' (Rule 15g-2, 17 CFR 240.15g-2) 
require 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 rules 
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.
    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 there are approximately 270 broker-dealers subject to 
Rule 15g-2, and that each one of these firms will process an average of 
three new customers for ``penny stocks'' per week. Thus each respondent 
will process approximately 156 risk disclosure documents per year. The 
staff calculates that (a) the copying and mailing of the risk 
disclosure document should take no more than two minutes per customer, 
and (b) each customer should take no more than eight minutes to review, 
sign, and return the risk disclosure document. Thus, the total ongoing 
respondent burden is approximately 10 minutes per response, or an 
aggregate total of 1,560 minutes per respondent. Since there are 270 
respondents, the annual burden is 421,200 minutes (1,560 minutes per 
each of the 270 respondents), or 7,020 hours. In addition, broker-
dealers will incur a recordkeeping burden of approximately two minutes 
per response. Thus each respondent will incur a recordkeeping burden of 
312 (156  x  2) minutes per

[[Page 19834]]

year, and respondents as a group will incur an aggregate annual 
recordkeeping burden of 1,404 hours (270  x  312/60). Accordingly, the 
aggregate annual hour burden associated with Rule 15g-2 is 8,424 hours 
(7,020 + 1,404).
    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.
    Please direct your written comments to Michael E. Bartell, 
Associate Executive Director, Office of Information Technology, 
Securities and Exchange Commission, 450 5th Street, NW, Washington, DC 
20549.

    Dated: April 13, 1999.
Jonathan G. Katz,
Secretary.
[FR Doc. 99-10016 Filed 4-21-99; 8:45 am]
BILLING CODE 8010-01-M