[Federal Register Volume 68, Number 10 (Wednesday, January 15, 2003)]
[Notices]
[Pages 2087-2089]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-790]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; Comment Review

Upon written request, copies available from: Securities and Exchange 
Commission; Office of Filings and Information Services; Washington, DC 
20549.

Extension:
    Rule 12a-5, Sec File No. 270-85, OMB Control No. 3235-0079;
    Rule 15c1-7, Sec File No. 270-146, OMB Control No. 3235-0134;
    Rule 15Aj-1, Sec File No. 270-25, OMB Control No. 3235-0044.

    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 extension of the previously approved 
collections of information discussed below.
    [sbull] Rule 12a-5--Temporary Exemption of Substituted or 
Additional Securities.
    Rule 12a-5 of the Securities Exchange Act of 1934 (the ``Act'') 
generally makes it unlawful for any security to be traded on a national 
securities exchange unless such security is registered on the exchange 
in accordance with the provisions of the Act and the rules and 
regulations thereunder.
    Rule 12a-5 and form 26 were adopted by the Commission in 1936 and 
1955 pursuant to sections 3(a)(12), 10(b), and 23(a) of the Act. 
Subject to certain conditions, rule 12a-5 affords a temporary exemption 
(generally for up to 120 days) from the registration requirements of 
section 12(a) of the Act for a new security when the holders of a 
security admitted to trading on a national securities exchange obtain 
the right (by operation of law or otherwise) to acquire all or any part 
of a class of another or substitute security of the same or another 
issuer, or an additional amount of the original security. The purpose 
of the exemption is to avoid an

[[Page 2088]]

interruption of exchange trading to afford time for the issuer of the 
new security to list and register it, or for the exchange to apply for 
unlisted trading privileges.
    Under paragraph (d) of rule 12a-5, after an exchange has taken 
action to admit any security to trading pursuant to the provisions of 
the rule, the exchange is required to file with the Commission a 
notification on form 26. Form 26 provides the Commission with certain 
information regarding a security admitted to trading on an exchange 
pursuant to rule 12a-5, including: (1) The name of the exchange, (2) 
the name of the issuer, (3) a description of the security, (4) the 
date(s) on which the security was or will be admitted to when-issued 
and/or regular trading, and (5) a brief description of the transaction 
pursuant to which the security was or will be issued.
    The Commission generally oversees the national securities 
exchanges. This mission requires that, under section 12(a) of the Act 
specifically, the Commission receive notification of any securities 
that are permitted to trade on an exchange pursuant to the temporary 
exemption under rule 12a-5. Without rule 12a-5 and form 26, the 
Commission would be unable fully to implement these statutory 
responsibilities.
    There are currently eight national securities exchanges subject to 
rule 12a-5. While approximately 40 form 26 notifications are filed 
annually, the reporting burdens are not typically spread evenly among 
the exchanges.\1\ For purposes of this analysis of burden, however, the 
staff has assumed that each exchange files an equal number (five) of 
form 26 notifications. Each notification requires approximately 20 
minutes to complete. Each respondent's compliance burden, then, in a 
given year would be approximately 100 minutes (20 minutes/report x 5 
reports = 100 minutes), which translates to just over 13 hours in the 
aggregate for all respondents (8 respondents x 100 minutes/respondent = 
800 minutes, or 13\1/3\ hours).
---------------------------------------------------------------------------

    \1\ In fact, some exchanges do not file any notifications on 
form 26 with the Commission in a given year.
---------------------------------------------------------------------------

    Based on the most recent available information, the Commission 
staff estimates that the cost to respondents of completing a 
notification on form 26 is, on average, $14.35 per response. The staff 
estimates that the total annual related reporting cost per respondent 
is $71.75 (5 responses/respondent x $14.35 cost/response), for a total 
annual related cost to all respondents of $574 ($71.75 cost/respondent 
x 8 respondents).
    Compliance with rule 12a-5 is required to obtain the benefit of the 
temporary exemption from registration offered by the rule. Rule 12a-5 
does not have a record retention requirement per se. However, responses 
made pursuant to rule 12a-5 are subject to the recordkeeping 
requirements of rules 17a-3 and 17a-4 of the Act. Information received 
in response to rule 12a-5 shall not be kept confidential; the 
information collected is public information.
    [sbull] Rule 15c1-7--Discretionary Accounts.
    Rule 15c1-7 provides that any act of a broker-dealer designed to 
effect securities transactions with or for a customer account over 
which the broker-dealer (directly or through an agent or employee) has 
discretion will be considered a fraudulent, manipulative, or deceptive 
practice under the federal securities laws, unless a record is made of 
the transaction immediately by the broker-dealer. The record must 
include (a) the name of the customer, (b) the name, amount, and price 
of the security, and (c) the date and time when such transaction took 
place.
    The information required by the rule is necessary for the execution 
of the Commission's mandate under the Exchange Act to prevent 
fraudulent, manipulative, and deceptive acts and practices by broker-
dealers. This is used by the Commission and the various self-regulatory 
organizations in compliance examinations to determine whether such 
trades have occurred.
    The Commission estimates that 500 respondents collect information 
annually under rule 15c1-7 and that approximately 33,333 hours would be 
required annually for these collections.
    Rule 15c1-7 does not have a record retention requirement per se. 
However, responses made pursuant to rule 15c1-7 are subject to the 
recordkeeping requirements of rules 17a-3 and 17a-4. Compliance with 
rule 15c1-7 is mandatory. Because the information is gathered by the 
Commission during compliance examinations, it is accorded confidential 
treatment pursuant to regulation 200.80(b)(7) under the Freedom of 
Information Act, 17 CFR 200.80(b)(7).
    [sbull] Rule 15Aj-1--Amendments and Supplements to Registration 
Statements of Securities Associations.
    Rule 15Aj-1 implements the requirements of sections 15A, 17, and 19 
of the Act by requiring every association registered as, or applying 
for registration as, a national securities association or as an 
affiliated securities association to keep its registration statement 
up-to-date by making periodic filings with the Commission on form X-
15AJ-1 and form X-15AJ-2.
    Rule 15Aj-1 requires a securities association to promptly notify 
the Commission after the discovery of any inaccuracy in its 
registration statement or in any amendment or supplement thereto by 
filing an amendment to its registration statement on form X-15AJ-1 
correcting such inaccuracy. The rule also requires an association to 
promptly notify the Commission of any change which renders no longer 
accurate any information contained or incorporated in its registration 
statement or in any amendment or supplement thereto by filing a current 
supplement on form X-15AJ-1. Rule 15Aj-1 further requires an 
association to file each year with the Commission an annual 
consolidated supplement on form X-15AJ-2.
    The information required by rule 15Aj-1 and forms X-15AJ-1 and X-
15AJ-2 is intended to enable the Commission to carry out its 
statutorily mandated oversight functions and to assure that registered 
securities associations are in compliance with the Act. This 
information is also made available to members of the public. Without 
the requirements imposed by the rule, the Commission would be unable to 
fulfill its regulatory responsibilities.
    There is presently only one registered securities association, 
which registered in 1939, subject to the rule. The burdens associated 
with rule 15Aj-1 requirements have been borne by only one securities 
association since rule 15Aj-1 was adopted. Furthermore, the burdens 
associated with rule 15Aj-1 vary depending on whether amendments and 
current supplements are filed on form X-15AJ-1 in addition to an annual 
consolidated supplement filed on form X-15AJ-2. The Commission staff 
estimates the burden in hours necessary to comply with the rule by 
filing an amendment or a current supplement on form X-15AJ-1 to be 
approximately one-half hour, with a related cost of $12, per response. 
The Commission staff estimates the burden in hours necessary to comply 
with the rule by filing an annual consolidated supplement on form X-
15AJ-2 to be approximately three hours, with a related cost of $96. 
Therefore, the Commission staff estimates that the total annual related 
reporting cost associated with the rule to be upwards of $96, assuming 
a minimum filing of an annual consolidated statement on form X-15AJ-2, 
with additional filings on form X-15AJ-1 correspondingly increasing 
such reporting cost.

[[Page 2089]]

    Compliance with rule 15Aj-1 is mandatory. Information received in 
response to rule 15Aj-1 shall not be kept confidential; the information 
collected is public 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: (a) Desk Officer for the Securities and 
Exchange Commission, Office of Information and Regulatory Affairs, 
Office of Management and Budget, Room 10102, New Executive Office 
Building, Washington, DC 20503; and (b) Kenneth A. Fogash, Acting 
Associate Executive Director/CIO, Office of Information Technology, 
Securities and Exchange Commission, 450 Fifth Street, NW., Washington, 
DC 20549. Comments must be submitted to Office of Management and Budget 
within 30 days of this notice.

    Dated: January 7, 2003.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-790 Filed 1-14-03; 8:45 am]
BILLING CODE 8010-01-U