[Federal Register Volume 64, Number 75 (Tuesday, April 20, 1999)]
[Notices]
[Pages 19391-19392]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9817]
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SECURITIES AND EXCHANGE COMMISSION
Submission for OMB Review; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Filings and Information Services, Washington, DC
20549.
Extension:
Rule 17a-3, SEC File No. 270-27, OMB Control No. 3235-0035
Rule 11Ab2-1 and Form SIP, SEC File No. 270-23, OMB Control No.
3235-0043
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) has submitted to the Office of Management and
Budget (OMB) a request for the extension of the previously approved
collections of information on the following:
Rule 17a-13(b) generally requires that at least once each calendar
quarter, all registered brokers and dealers physically examine and
count all
[[Page 19392]]
securities held and 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)
provides that under specified conditions, the securities 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 filing a report
with the Commission, the discrepancies must be reported on Form X-17a-5
as required by Rule 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.
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 having problems in their back offices.
Because of the many variations in the amount of securities that
broker-dealers are accountable for, it is difficult to develop a
meaningful figure for the cost of compliance with Rule 17a-13.
Approximately 92% of all registered broker-dealers are subject to Rule
17a-13. Accordingly, approximately 7,156 broker-dealers have
obligations under the Rule, and the average time it would take each
broker-dealer to comply with the Rule is 100 hours per year, for a
total estimated annualized burden of 715,600 hours. It should be noted
that a significant number of firms subject to Rule 17a-13 have minimal
obligations under the Rule because they do not hold securities. It
should further be noted that most broker-dealers would engage in the
activities required by Rule 17a-13 even if they were not required to do
so.
Security counts under Rule 17a-13 are mandatory for broker-dealers.
If a broker-dealer has security discrepancies that must be recorded in
its records, such records must be preserved for a period of no less
than three years pursuant to Rule 17a-4(b)(1). Rule 17a-13 does not
assure confidentiality for security discrepancy records and reports on
Form X-17a-5.\1\
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\1\ The records required by Rule 17a-13 are available only to
the examination of the Commission staff, state securities
authorities and the 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.
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Rule 11Ab2-1 and Form SIP establish the procedures by which a
Securities Information Processor (SIP) files and amends its SIP
registration form. The information filed with the Commission pursuant
to Rule 11Ab2-1 and Form SIP is designed to provide the Commission with
the information necessary to make the required findings under the
Securities Exchange Act of 1934 (Act) before granting the SIP's
application for registration. In addition, the requirement that a SIP
file an amendment to correct any inaccurate information is designed to
assure that the Commission has current, accurate information with
respect to the SIP. This information is also made available to members
of the public.
Only exclusive SIP's are required to register with the Commission.
An exclusive SIP is a SIP that engages on an exclusive basis on behalf
of any national securities exchange or registered securities
association, or any national securities exchange or registered
securities association which engages on an exclusive basis on its own
behalf, in collecting, processing, or preparing for distribution or
publication, any information with respect to (i) transactions or
quotations on or effected or made by means of any facility of such
exchange or (ii) quotations distributed or published by means of any
electronic quotation system operated by such association. The federal
securities laws require that before the Commission may approve the
registration of an exclusive SIP, it must make certain mandatory
findings. It takes a SIP applicant approximately 400 hours to prepare
documents which include sufficient information to enable the Commission
to make those findings. Currently, there are only two exclusive SIPs
registered with the Commission; The Securities Information Automation
Corporation (SIAC) and The Nasdaq Stock Market, Inc. (Nasdaq). SIAC and
Nasdaq are required to keep the information on file with the Commission
current, which entails filing a form SIP annually to update
information. Accordingly, the annual reporting and recordkeeping burden
for Rule 11Ab2-1 and Form SIP is 400 hours. This annual reporting and
recordkeeping burden does not include the burden hours or cost of
amending a Form SIP because the Commission has already overstated the
compliance burdens by assuming that the Commission will receive one
initial registration pursuant to Rule 11Ab2-1 on Form SIP a year.
Rule 11Ab2-1 and Form SIP do not impose a retention period for any
recordkeeping requirements. Completing and filing Form SIP is mandatory
before an entity may become an exclusive SIP. Except in cases where
confidential treatment is requested by an applicant and granted by the
Commission pursuant to the Freedom of Information Act and the rules of
the Commission thereunder, information provided in the Form SIP will be
routinely available for public inspection.
Please note that an agency may not conduct or sponsor, and a person
is not required to respond to, a collection of information unless it
displays a currently valid control number.
Written Comments regarding the above information should be directed
to the following persons: (i) Desk Officer for the Securities And
Exchange Commission, Office of Information and Regulatory Affairs,
Office of Management and Budget, Room 10202, New Executive Office
Building, Washington, DC 20503; and (ii) Michael E. Bartell, Associate
Executive Director, Office of Information Technology, Securities and
Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549.
Comments must be submitted to OMB within 30 days of this notice.
Dated: April 12, 1999.
Jonathan G. Katz,
Secretary.
[FR Doc. 99-9817 Filed 4-19-99; 8:45 am]
BILLING CODE 8010-01-M