2014 24b-1 Supporting Statement v3 (2)

SUPPORTING STATEMENT
For the Paperwork Act Information Collection Submission for
Rule 24b-1
A.

Justification
1. Information Collection Necessity

Rule 24b-1 (17 CFR 240.24b-1) (the “Rule”) was adopted in 1934 pursuant to the
predecessor to Section 24 of the Securities Exchange Act of 1934 (the "Act"). Former Section
24(a) of the Act authorized the Commission to make public such information, as it deemed
necessary or appropriate for the protection of investors. In 1975, Section 24(a) was amended to
expressly define all documents filed with or otherwise obtained by the Commission as "records"
for the purpose of the Freedom of Information Act ("FOIA"), 5 USC 552. Section 24(b) of the
Act makes it unlawful for any member of the Commission to disclose to any person other than a
Commission member (or to use for personal benefit) any information contained in a document
filed with the Commission either (a) in contravention of Commission rules under FOIA, or (b)
when the Commission has accorded confidential treatment to information pursuant to such rules.
Rule 24b-1 permits members of the public to obtain access to the registration statements
and amendments to the registration statements of the securities exchanges. Implementing the
requirements of Section 24(a), the rule requires that upon Commission action granting an
exchange's application for registration or exemption from registration as a national securities
exchange, the exchange must make available for public inspection at its offices during
reasonable business hours a copy of the registration statement and exhibits filed with the
Commission (along with any amendments thereto). However, the rule exempts those portions of
this information to which the exchange has filed with the Commission an objection to disclosure
and when the Commission has not overruled the objection. While the rule does not specify a
retention period, the exchanges generally maintain this information for five years.
The rule was adopted pursuant to authority granted to the Commission in Section 24 of
the Act, 15 USC 78x. Further authority for the rule can be found in Section 23(a) of the Act, 15
USC 78w(a).
2.

Information Collection Purpose and Use

Rule 24b-1 implements the requirements of Section 24(a) of the Act by requiring
exchanges to make their registration information public, unless an exception applies. Without
the rule, exchanges would probably not make this information publicly available. 1
3.

Consideration Given to Information Technology

The compilation and filing of the data required reflects the complexity of the exchanges'
business. Thus, improved technology would not reduce the burden.
1

The Commission notes, however, that recent exchange applications for registration or exemption
are available at http://www.sec.gov/rules/other.shtml.

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4.

Duplication

Not applicable. Each request by members of the public must be done on an individual
basis.
5.

Effect on Small Entities

Not applicable. The burden is minimal and the information is necessary regardless of the
size of the exchange.
6.

Consequences of Not Conducting Collection

Since the rule requires only that exchanges maintain the record, less frequent collection is
not possible.
7.

Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)

The collection is not inconsistent with 5 CFR 1320.5(d)(2).
8.

Consultations Outside the Agency

The required Federal Register notice with a 60-day comment period soliciting comments
on this collection of information was published. No public comments were received.
9.

Payment or Gift

Not applicable.
10.

Confidentiality

Under the rule, exchange registration statements are required to be made available to the
public upon request. Thus confidentiality is assured to respondents under the rule only with
regard to those portions of the statement which an exchange has filed with the Commission an
objection to disclosure, and the Commission has not overruled the objection.
11.

Sensitive Questions

No questions of a sensitive nature are asked. The information collection does not collect
any Personally Identifiable Information (PII).

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12.

Information Collection Burden

There are currently 18 national securities exchanges subject to Rule 24b-1. 2 The burden
of complying with the rule is evenly distributed among the exchanges subject to the rule. The
staff estimates that each of the respondents spends approximately one half hour per year
complying with the rule, for an aggregate total of nine annual burden hours.
13.

Costs to Respondents

The staff estimates that the average cost per respondent is $65.18 per year, for an
aggregate total cost to respondents of $1,173.24. This is calculated as copying ($13.97) plus
storage ($51.21). This estimate is based on those exchanges currently registered with the
Commission. The Commission recognizes that the number of registered exchanges may increase
or decrease in the future.
It is not anticipated that respondents will have to incur any additional operational or
maintenance costs to comply with the Rule. It also is not anticipated that respondents will have
to incur any capital and start-up costs to comply with the Rule.
14.

Cost to Federal Government

The Commission incurs no operational costs with respect to Rule 24b-1.
15.

Changes in Burden

The changes to the estimated annual cost burden resulted from an increase in the number
of respondents.
16.

Information Collections Planned for Statistical Purposes

Not applicable. The information collection is not used for statistical purposes.
17.

Approval to Omit OMB Expiration Date

The Commission is not seeking approval to omit the expiration date.

2

These 18 registered national securities exchanges are (1) BATS Exchange, Inc.; (2) BATS YExchange, Inc.; (3) BOX Options Exchange LLC; (4) C2 Options Exchange, Incorporated; (5)
Chicago Board Options Exchange, Incorporated; (6) Chicago Stock Exchange, Inc.; (7) EDGA
Exchange, Inc.; (8) EDGX Exchange, Inc.; (9) International Securities Exchange, LLC; (10) ISE
Gemini, LLC; (11) Miami International Securities Exchange LLC; (12) NASDAQ OMX BX, Inc.;
(13) NASDAQ OMX PHLX, Inc.; (14) The Nasdaq Stock Market LLC; (15) National Stock
Exchange, Inc.; (16) New York Stock Exchange, Inc.; (17) NYSE MKT, Inc.; and (18) NYSE
Arca, Inc.

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18.

Exceptions to Certification for Paperwork Reduction Act Submissions

This collection complies with the requirements in 5 CFR 1320.9.
B.

Collection of Information Employing Statistical Methods
This collection does not involve statistical methods.