[Federal Register Volume 67, Number 62 (Monday, April 1, 2002)]
[Notices]
[Pages 15423-15424]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-7753]
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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; 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 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.
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 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
[[Page 15424]]
Information Technology, Securities and Exchange Commission, 450 5th
Street, NW, Washington, DC 20549.
Dated: March 22, 2002.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-7753 Filed 3-29-02; 8:45 am]
BILLING CODE 8010-01-P