3235-0206 Rule 19d-1 Supporting Statement (2025 Extension)

SUPPORTING STATEMENT
for the Paperwork Reduction Act Information Collection Submission for
Rule 19d-1; 3235-0206
A.

JUSTIFICATION
1.

Necessity of Information Collection

Rule 19d-1 (“Rule”) under the Securities Exchange Act of 1934 (the “Exchange Act”),
prescribes the form and content of notices to be filed with the Securities and Exchange Commission
(“Commission”) by self-regulatory organizations (“SROs”) for which the Commission is the
appropriate regulatory agency concerning the following final SRO actions: (1) disciplinary actions
with respect to any person; (2) denial, bar, prohibition, or limitation of membership, participation or
association with a member or of access to services offered by an SRO or member thereof; (3)
summarily suspending a member, participant, or person associated with a member, or summarily
limiting or prohibiting any persons with respect to access to or services offered by the SRO or a
member thereof; and (4) delisting a security.
The Rule enables the Commission to obtain reports from the SROs containing information
regarding SRO determinations to delist a security, discipline members or associated persons of
members, deny membership or participation or association with a member, and similar adjudicated
findings. The Rule requires that such actions be promptly reported to the Commission. The Rule
also requires that the reports and notices supply sufficient information regarding the background,
factual basis and issues involved in the proceeding to enable the Commission: (1) to determine
whether the matter should be called up for review on the Commission’s own motion; and (2) to
ascertain generally whether the SRO has adequately carried out its responsibilities under the
Exchange Act. Rule 19d-1 was adopted on July 8, 1977, pursuant to authority granted the
Commission in Sections 6, 11A, 15, 15A, 19, and 23 of the Exchange Act, 15 U.S.C. 78f, 78k-1,
78o, 78o-3, 78q, 78q-1, 78s, and 78w.
2.

Purpose and Use of the Information Collection

The Commission uses the information provided in the submissions filed pursuant to Rule
19d-1 in its SRO oversight program. Rule 19(d)-1 under the Exchange Act requires SROs to
“promptly” file notice with the Commission of any final action covered by the Rule. The
Commission would not be able to comply with certain provisions of the Exchange Act and to
oversee the disciplinary activities of the SROs if this information was not reported.
3.

Consideration Given to Information Technology

SROs submit notices electronically to the Commission’s Rule 19d-1 Filing System. If
notices are received in paper format, they are not uploaded to the electronic system but are stored
in paper form and available for review. Very few notices are received in paper format.
4.

Duplication

There is no duplication of this notification process to the Commission.
5.

Effect on Small Entities

Not applicable. Rule 19d-1 does not affect small entities because the SRO respondents do
not meet the definition of “small entities” found in Rule 0-10 of the Exchange Act.
6.

Consequences of Not Conducting Collection

The principal purpose of Rule 19d-1 is to provide the Commission with an opportunity to
help ensure that SRO enforcement of the federal securities laws is performed diligently and fairly.
Rule 19d-1 under the Exchange Act requires that these notices be filed “promptly.”1 Accordingly, a
less frequent reporting requirement would weaken the Commission’s ability to oversee the
disciplinary activities of the SROs in a timely fashion. Moreover, a less frequent collection of
information is not practical if the Commission is to have a meaningful and timely opportunity to
review any final action of an SRO.
7.

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

Other than the record retention requirements described below, there are no special
circumstances and this collection is consistent with the guidelines in 5 CFR 1320.5(d)(2).
Rule 19d-1 does not include a recordkeeping or retention requirement in the text
of the rule. That requirement is in Rule 17a-1 (3235-0208), which provides that all
documents that a national securities exchange or association makes respecting its selfregulatory activities be kept for a period of not less than five years, the first two in an
easily accessible place. We believe the extended retention period is appropriate as it
provides sufficient time for Commission inspections and investigations of SROs.
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

There has been no decision to provide any payment of gift to respondents.
10.
1

Confidentiality

Reporting of minor rule violations is permitted on a simplified period basis (e.g., quarterly) in
accordance with plans filed by SROs pursuant to Rule 19d-1(c) and approved by the
Commission.
2

No assurance of confidentiality is given, as the SROs generally make their final disciplinary
actions available to the public as a matter of course.
11.

Sensitive Questions

The information collection collects basic personally identifiable information including
employee identification number, name, occupation, job title, work contact information, work
history, and business associates. The collection of information constitutes a system of record for
purposes of the Privacy Act and is covered by SORN SEC-03 “Division of Trading and Markets
Records, published on February 15, 2018 (available at https://www.sec.gov/privacy). In
accordance with Section 208 of the E-Government Act of 2002, the agency has conducted a
privacy impact assessment of the Rule 19d-1 Filing Tracking System, published on August 13,
2020 (available at https://www.sec.gov/privacy).
12.

Burden of Information Collection

The Commission estimates that this rule imposes a total estimated industry burden of 912
hours per year. Based upon past submissions, we estimate that approximately 17 respondents will
utilize this notification procedure annually, with a burden of approximately 912 total hours. This
figure represents approximately 48 hours spent, per respondent. It is estimated that each respondent
will submit approximately 48 responses per year and it is estimated that each respondent will spend
approximately 1 hour per response.2 Based on available salary data, the Commission estimates that
the internal cost per SRO is approximately $344, per response.3 Therefore, the internal labor cost of
compliance for all respondents is approximately $ 292,400 (17 respondents x 50 responses x $344
per response).
Summary of Hourly Burdens (Annual)
Name of
Information
Collection

Type of
Burden

Number Number
Burden
of
of
per
Entities Responses Response
per Entity

Total
Burden
Per
Entity

Total
Total
Number
Industry
of
Burden
Responses

For purposes of entering the estimated burdens into OMB’s ROCIS system, we have provided
a number of respondents and then a number of responses per respondent. We note, however, that
SROs submit varying numbers of notices, and that the majority are submitted by the Financial
Industry Regulatory Authority.
2

3

This estimate was calculated using a $344 per hour wage for a Compliance Manager, based on
the Security Industry and Financial Markets Association’s, Management & Professional
Earnings in the Securities Industry 2013, which has been modified by Commission staff to
account for an 1,800-hour work year as well as inflation, and multiplied by 5.35 to account for
bonuses, firm size, employee benefits and overhead.
3

Rule 19d-1
Notices

Reporting

17

50

1

50

850

TOTAL BURDEN
13.

850
850

Costs to Respondents

It is not anticipated that respondents will have to incur any capital and start-up costs, nor any
additional operational or maintenance costs (other than as provided in Item 12), to comply with the
collection of information.
14.

Costs to Federal Government

The government would not experience any new costs based on the extension of the
recordkeeping and reporting required pursuant to Rule 19d-3. The information collected by the
respondents would be reviewed using current Commission staff and resources.
15.

Changes in Burden

The Commission revised the burden to reflect the recent number of notices received per
year. In 2022 there were a total of 819 submissions, in 2023 there were a total of 667
submissions and 837 in 2024. As a conservative measure, we are using the largest annual
submissions number. This resulted in an average of 50 responses per respondent. 4 In addition, we
are decreasing the estimated number of respondents from 19 to 17 because in the past three years
17 SROs submitted notices. This results in an increase to the estimated number of responses per
respondent from 48 to 50 because the number of respondents decreased. However, the change in
the total estimated annual burden is a decrease from 912 hours to 850 hours 5 due to the fact that
the total number of submissions has decreased. 6
(837)/17 = 49.23, rounded up to 50. In previous extensions, we have added 10 percent to the
largest annual submissions number in case the number of submissions increased in the future.
However, we did not do so in this extension because the average annual number of submissions
over the past three years has decreased in comparison to the previous extensions.
4

5

In the 2019 extension, the Commission increased the estimated burden per response from 0.5
hours to 1 hours, as a conservative measure, in the event that some notices take more than 0.5
hours to prepare. We continue to believe that this is a conservative estimate and note that many
notices may take only 0.5 hours to prepare.
6

17 respondents x 50 responses per respondent x 1 hour per response = 850 hours. The total
estimated annual burden is greater than the 837 number of annual submissions in 2024 because
we rounded the number of responses per respondent from 49.23 to 50.
4

Summary of Change in Burden (Annual)
Previously
Approved
Burden
912

New Estimated
Burden

850

Change in Burden

Reason for the Change

The estimated number of responses
decreased based on data from recent
filings.

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TOTAL CHANGE IN
BURDEN
16.

Information Collections Planned for Statistical Purposes

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

Approval to Omit OMB Expiration Date

The Commission is not seeking approval to omit the expiration date.
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 METHOD
This collection does not involve statistical methods.

5

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