[Federal Register Volume 84, Number 224 (Wednesday, November 20, 2019)]
[Notices]
[Pages 64166-64167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25094]
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SECURITIES AND EXCHANGE COMMISSION
Submission for OMB Review; Comment Request
Upon Written Request, Copies Available From: U.S. Securities and
Exchange Commission, Office of FOIA Services, 100 F Street NE,
Washington, DC 20549-2736
Extension:
Rule 17a-13, SEC File No. 270- 27, OMB Control No. 3235-0035
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and
Exchange Commission (``Commission'') has submitted to the Office of
Management and Budget (``OMB'') a request for approval of extension of
the previously approved collection of information provided for in Rule
17a-13 (17 CFR 240.17a-13) under the Securities Exchange Act of 1934
(15 U.S. C. 78a et seq.) (``Exchange Act'').
Rule 17a-13(b) (17 CFR 240.17a-13(b)) generally requires that at
least once each calendar quarter, all registered brokers-dealers
physically examine and count all securities held, and that they account
for all other securities not in their possession, but subject to the
broker-dealer's control or direction. Any discrepancies between the
broker-dealer's securities count and the firm's records must be noted
and, within seven days, the unaccounted for difference must be recorded
in the firm's records. Rule 17a-13(c) (17 CFR 240.17a-13(c)) provides
that under
[[Page 64167]]
specified conditions, the count, examination, and verification of the
broker-dealer's entire list of securities may be conducted on a
cyclical basis rather than on a certain date. Although Rule 17a-13 does
not require broker-dealers to file a report with the Commission,
discrepancies between a broker-dealer's records and the securities
counts may be required to be reported, for example, as a loss on Form
X-17a-5 (17 CFR 248.617), which must be filed with the Commission under
Exchange Act Rule 17a-5 (17 CFR 240.17a-5). Rule 17a-13 exempts broker-
dealers that limit their business to the sale and redemption of
securities of registered investment companies and interests or
participation in an insurance company separate account and those who
solicit accounts for federally insured savings and loan associations,
provided that such persons promptly transmit all funds and securities
and hold no customer funds and securities. Rule 17a-13 also does not
apply to certain broker-dealers required to register only because they
effect transactions in securities futures products.
The information obtained from Rule 17a-13 is used as an inventory
control device to monitor a broker-dealer's ability to account for all
securities held in transfer, in transit, pledged, loaned, borrowed,
deposited, or otherwise subject to the firm's control or direction.
Discrepancies between the securities counts and the broker-dealer's
records alert the Commission and the self-regulatory organizations
(``SROs'') to those firms experiencing back-office operational issues.
As of June 30, 2019, there are approximately 3,744 broker-dealers
registered with the Commission. However, given the variability in their
businesses, it is difficult to quantify how many hours per year each
broker-dealer spends complying with Rule 17a-13. As noted, Rule 17a-13
requires a broker-dealer to account for all securities in its
possession or subject to its control or direction. Many broker-dealers
hold few, if any, securities; while others hold large quantities.
Therefore, the time burden of complying with Rule 17a-13 will depend on
respondent-specific factors, including a broker-dealer's size, number
of customers, and proprietary trading activity. The staff estimates
that the average time spent per respondent is 100 hours per year on an
ongoing basis to maintain the records required under Rule 17a-13. This
estimate takes into account the fact that more than half of the 3,744
respondents--according to financial reports filed with the Commission--
may spend little or no time complying with Rule 17a-13, given that they
do not do a public securities business or do not hold inventories of
securities. For these reasons, the staff estimates that the total
compliance burden per year is 374,400 hours (3,744 respondents x 100
hours/respondent).
The records required to be made by Rule 17a-13 are available only
to Commission examination staff, state securities authorities, and
applicable SROs. Subject to the provisions of the Freedom of
Information Act, 5 U.S.C. 522, and the Commission's rules thereunder
(17 CFR 200.80(b)(4)(iii)), the Commission does not generally publish
or make available information contained in any reports, summaries,
analyses, letters, or memoranda arising out of, in anticipation of, or
in connection with an examination or inspection of the books and
records of any person or any other investigation.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number.
The public may view background documentation for this information
collection at the following website: www.reginfo.gov. Comments should
be directed to: (i) 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, or by sending an email to:
[email protected]; and (ii) Charles Riddle, >Acting Director/
Chief Information Officer, Securities and Exchange Commission, c/o
Candace Kenner, 100 F Street NE, Washington, DC 20549, or by sending an
email to: [email protected]. Comments must be submitted to OMB within
30 days of this notice.
Dated: November 14, 2019.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-25094 Filed 11-19-19; 8:45 am]
BILLING CODE 8011-01-P