trade-throughs is execution of a transaction in its market at a price that is inferior to a bid in another market.
- The SEC adopted Rule 611 of Regulation NMS under the Exchange Act to require any national securities exchange, national securities association, alternative trading system, exchange market maker, over-the-counter market maker, and any other broker-dealer that executes orders internally by trading as principal or crossing orders as agent, to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the execution of a transaction in its market at a price that is inferior to a bid or offer displayed in another market at the time of execution (a “trade-though”), absent an applicable exception and, if relying on an exception, that are reasonably designed to assure compliance with the terms of the exception.
- Without this collection of information, respondents would not have a means to enforce compliance with the Commission’s intention to prevent trade-throughs pursuant to the rule.
- There are approximately 235 respondents per year that will require an aggregate total of approximately 14,100 hours to comply with this Rule.
- It is anticipated that each respondent will continue to expend approximately 60 hours annually: two hours per month of internal legal time and three hours per month of internal compliance time to ensure that its written policies and procedures are up-to-date and remain in compliance with Rule 611.
- The estimated cost for an inhouse attorney is $489 per hour and the estimated cost for an assistant compliance director in the securities industry is $432 per hour.
- Therefore the estimated total internal cost of compliance for the annual hour burden is as follows: [(2 legal hours x 12 months x $489) x 235] + [(3 compliance hours x 12 months x $432) x 235] = $6,412,680.
Written comments are invited on:
- (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility;
- (b) the accuracy of the Commission’s estimates of the burden of the proposed collection of information;
- (c) ways to enhance the quality, utility, and clarity of the information to be collected;
- (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.
[email protected]subject SEC File No. 270-540, OMB Control No. 3235-0600]
- Comments due 60 days from 5/2
- All comments could be shared as is along with your email address.