[Federal Register Volume 64, Number 89 (Monday, May 10, 1999)]
[Rules and Regulations]
[Pages 25144-25152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11359]



[[Page 25143]]

_______________________________________________________________________

Part V





Securities and Exchange Commission





_______________________________________________________________________



17 CFR Parts 240 and 249



Broker-Dealer Registration and Reporting; Final Rule and Proposed Rule

  Federal Register / Vol. 64, No. 89 / Monday, May 10, 1999 / Rules and 
Regulations  

[[Page 25144]]



SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 240 and 249

[Release No. 34-41356; File No. S7-17-96]
RIN 3235-AG69


Broker-Dealer Registration and Reporting

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: The Securities and Exchange Commission is amending Form BDW 
and related filing procedures under the Securities Exchange Act of 
1934. The amendments implement changes recommended to allow filings 
from the World Wide Web. The amendments clarify Form BDW and its filing 
procedures. Some other minor rule revisions relating to the status of 
Form BDW as a report under the Securities Exchange Act of 1934 and when 
a filed Form BDW becomes effective are also being adopted.

EFFECTIVE DATE: June 9, 1999.

FOR FURTHER INFORMATION CONTACT: Catherine McGuire, Chief Counsel, or 
Brian Baysinger, Attorney, (202) 942-0073, Office of Chief Counsel, 
Division of Market Regulation, Securities and Exchange Commission, 450 
Fifth Street, NW, Washington, DC 20549-1001.

SUPPLEMENTARY INFORMATION:

I. Introduction

    As part of its continuing effort to simplify the registration forms 
used by broker-dealers, the Securities and Exchange Commission 
(``Commission'') is revising Form BDW,\1\ the uniform request for 
broker-dealer withdrawal under the Securities Exchange Act of 1934 
(``Exchange Act'').\2\ The amendments to Form BDW adopted today by the 
Commission are the result of discussions held among the Commission 
staff, the Forms/CRD Committee of the North American Securities 
Administrators Association, Inc. (``NASAA''), National Association of 
Securities Dealers, Inc. (``NASD''), the New York Stock Exchange, and 
representatives of the securities industry. The amendments adopted 
today were proposed in Securities Exchange Act Release No. 37432.\3\ 
The comment period for the Proposing Release ended on August 19, 1996. 
No comments were received.
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    \1\ Form BDW is required to be used by all broker-dealers that 
seek to withdraw from registration with the Commission. See 17 CFR 
240.15b6-1; 17 CFR 249.501a.
    \2\ 15 U.S.C. 78a et seq.
    \3\ Securities Exchange Act Release No. 37432 (July 12, 1996), 
61 FR 37701 (July 19, 1996)(``Proposing Release''). The Proposing 
Release also proposed amendments relating to filing procedures for 
Forms BD and BDW that are not being adopted today because changes to 
the design of the CRD system made since the Proposing Release, have 
necessitated changes to those proposed filing procedures. The 
Commission is today proposing in a separate release revisions to 
Form BD, the rules and instructions relating to Form BD, and the 
filing procedures relating to Forms BD. See Securities Exchange Act 
Release No. 34-41351.
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    By simplifying the form and clarifying its requirements, the 
revisions are designed to reduce the regulatory burden on broker-
dealers and to improve the usefulness of the information contained in 
Form BDW to the Commission, self-regulatory organizations (``SROs''), 
and state securities regulators. The amendments are also designed to 
implement changes recommended in connection with changes to the Central 
Registration Depository system (``CRD'') that will allow filings from 
the World Wide Web. The CRD, a computer system operated by the NASD, 
maintains registration information regarding broker-dealers and their 
registered personnel for use by the Commission, SROs and state 
securities regulators.\4\ The new system will be known as ``Web 
CRD''.\5\
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    \4\ The revisions to Form BDW in certain respects conform it to 
analogous amendments to Form BD that were adopted on July 12, 1996. 
Although adopted, those amendments to Form BD have not yet been 
implemented because Web CRD is not yet operational. See Securities 
Exchange Act Release No. 37431 (July 12, 1996), 61 FR 37701 (``Form 
BD Release''). The Commission is today proposing in a separate 
release further revisions to the adopted but not implemented Form BD 
that will facilitate its use on Web CRD scheduled to become 
operational on August 16, 1999. See Securities Exchange Act Release 
No. 34-41351.
    \5\ CRD/PD Bulletin, Volume 6, No. 5, March 1999 (available from 
the www.nasdr.com website).
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    The NASD anticipates Web CRD will become operational on August 16, 
1999. Adoption of the amendments to Form BDW now will facilitate the 
NASD's implementation of the new system. Web CRD is expected to provide 
the Commission, SROs, and state securities regulators with (i) 
streamlined capture and display of data; (ii) better access to 
information through the use of standardized and specialized computer 
searches; and (iii) electronic filing by broker-dealers of uniform 
forms, including Forms BD, BDW, U-4, and U-5.\6\ The Commission is also 
amending Exchange Act Rule 15b6-1 \7\ to permit broker-dealers that are 
withdrawing from registration to consent to a delay in the 
effectiveness of their notice of withdrawal. The amendments will also 
permit the Commission to extend the effective date for such period as 
the Commission by order may determine is necessary or appropriate in 
the public interest or for the protection of investors. The Commission 
is similarly amending Rules 15Bc3-1 \8\ and 15Cc1-1 \9\ relating to the 
withdrawal from registration of municipal securities dealers and 
government securities brokers and government securities dealers. These 
amendments are being adopted, in part, to provide the broker-dealers, 
municipal securities dealers and government securities brokers and 
government securities dealers adequate flexibility to bring their 
business operations to an orderly close in circumstances in which the 
60-day period currently provided under Rule 15b6-1, 15Bc3-1 or 15Cc1-1 
would not be sufficient. These amendments are also being adopted to 
provide the Commission greater flexibility in concluding investigations 
of broker-dealers, municipal securities dealers and government 
securities brokers and government securities dealers before they 
complete the withdrawal process.
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    \6\ Forms BD and BDW are joint forms used by the Commission, 
certain; SROs, and all of the states to register, and terminate the 
registration of, broker-dealers. Forms U-4 and U-5 are used by the 
SROs and states to register, and terminate the employment of, 
broker-dealer personnel.
    \7\ 17 CFR 240.15b6-1.
    \8\ 17 CFR 240.15Bc3-1
    \9\ 17 CFR 240.15Cc1-1
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    The amendments to Rules 15b6-1, 15Bc3-1 and 15Cc1-1, together with 
amendments to Form BDW, are discussed further below.

II. Form BDW

A. Items 4, 5, 6, and 8

    The Commission is amending Items 4, 5, 6, and 8 of Form BDW. Item 4 
asks when the withdrawing broker-dealer stopped doing business and, in 
the case of partial withdrawals from registration,\10\ when the broker-
dealer stopped doing business in the states designated in Item 3. As 
currently drafted, Item 4 presumes that broker-dealers filing Form BDW 
are registered entities. Certain states, however, also require broker-
dealers with pending applications for registration on Form BD to file 
Form BDW to withdraw their pending applications.\11\ In order to 
accommodate those states, Item 4 is being amended to require disclosure 
of

[[Page 25145]]

the date on which the broker-dealer withdrew its request for 
registration.
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    \10\ The instructions to the form have been revised to explain 
that a partial withdrawal terminates registration only with 
designated states and SROs, but does not terminate registration with 
the Commission and at least one SRO and state.
    \11\ The Commission does not require a broker-dealer that has an 
application for registration pending to file Form BDW in order to 
withdraw its pending application. Broker-dealers may withdraw a 
pending application simply by providing notice in writing to the 
Commission and the applicable SRO.
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    The Commission is also amending Item 5, which requests information 
concerning any funds and securities that withdrawing broker-dealers may 
owe to their customers or to other broker-dealers. Specifically, Item 5 
requires disclosure of the number of customers to which funds or 
securities are owed, the amount of money and the market value of 
securities owed to customers or other broker-dealers, and the 
arrangements that have been made for payment. As amended, Item 5 will 
require a broker-dealer that files a partial withdrawal (i.e., a 
withdrawal from registration with a specific state or SRO) to provide 
the names of the states from which it is requesting withdrawal and in 
which it still owes customer funds or securities. This amendment will 
assist state securities regulators in monitoring the amount of funds or 
securities owed to customers in their states.
    The proposed revisions to Item 5 will also change the requirement 
that broker-dealers submit a FOCUS report or a statement of financial 
condition when filing Form BDW. Currently, a broker-dealer is required 
to file with Form BDW, a FOCUS report or, if the broker-dealer is not 
subject to the FOCUS filing requirement, a statement of financial 
condition, regardless of whether the broker-dealer owes funds or 
securities to customers or to other broker-dealers. The Commission is 
reducing the filing burden on broker-dealers by requiring only that a 
FOCUS report or a statement of financial condition be filed with Form 
BDW when a broker-dealer is requesting full withdrawal from 
registration (i.e., a withdrawal from registration with the Commission, 
all SROs, and all states) and the broker-dealer owes money or 
securities to any customer or to any other broker-dealer.
    In addition, the Commission is amending Item 6 of Form BDW, which 
requires disclosure of certain regulatory and other disciplinary 
matters that are also reportable on Form BD. Item 6 is being amended to 
delete the requirement that broker-dealers reiterate information 
already required to be disclosed on Form BD or elsewhere on Form 
BDW.\12\ Instead, Item 6 will remind broker-dealers that they must 
update any incomplete or inaccurate disciplinary information on Form BD 
prior to filing Form BDW.\13\
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    \12\ Specifically, the question ``is broker-dealer now the 
subject of any unsatisfied customer claims for funds or securities 
not reported under Item 5'' would be deleted. These claims generally 
are already reportable under Item 5.
    \13\ Exchange Act Rule 15b3-1 [17 CFR 240.15b3-1] requires 
broker-dealers to amend any information on Form BD whenever it 
becomes inaccurate.
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    Item 6 is also being amended to ask whether the broker-dealer is 
the subject of, or is named in, any investment-related investigation, 
consumer-initiated complaint, or private civil litigation. Item 6 
currently requires disclosure if the broker-dealer is the subject of 
any ``proceeding'' not reported on Form BD, or any complaint or 
investigation. The question, therefore, is being revised to elicit more 
precise information by using specific, rather than general, terms.
    Finally, the Commission is expanding Item 8, the execution 
paragraph, to require the registrant's agent to certify that the 
information contained on Form BDW is complete and current, and to 
certify further that all of the information on Form BD is accurate and 
complete at the time Form BDW is filed.

B. Instructions

    The Commission is also expanding the general filing instructions to 
Form BDW to provide greater guidance to broker-dealers filing Form 
BDW.\14\ The revised instructions also clarify attendant requirements 
that may arise out of filing Form BDW, particularly those raised by 
filing the form electronically with Web CRD. As amended, the 
instructions also include an explanation of the terms ``jurisdiction,'' 
``investment-related,'' and ``investigation.'' \15\ These definitions 
are intended to assist broker-dealers in responding to questions about 
their disciplinary history and are consistent with the definitions 
adopted in the Form BD Release.\16\
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    \14\ The changes to Form BDW and its instructions are those 
identified in the proposing release except that the words ``or 
paper'' are being deleted from the second sentence of section 
``A.1.`' of the Form BDW Instructions and the abbreviations ``ASE'' 
and ``PSE`' in section 3 of Form BDW are being updated to ``AMEX`' 
and ``PCX''.
    \15\ E.g., the definition of the term ``investigation'' includes 
grand jury investigations, Commission investigations after the 
``Wells'' notice has been given, formal investigations by SROs, or 
actions or procedures designated as investigations by states. The 
definition does not include subpoenas, preliminary or routine 
regulatory inquiries or requests for information, deficiency 
letters, ``blue sheet'' requests or other trading questionnaires, or 
examinations.
    \16\ See supra notes 1 and 4 and accompanying text.
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C. Clarifying Amendments

    In addition to the substantive amendments to Form BDW discussed 
above, the Commission is adopting several clarifying amendments to Form 
BDW. Item 3, for example, is being revised to inform broker-dealers 
that the ``SEC'' box should be checked only if a broker-dealer is 
intending to conduct an intrastate brokerage business and is not a 
municipal securities dealer.\17\
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    \17\ Exchange Act Rule 15Ba2-2 [17 CFR 240.15Ba2-2] requires a 
non-bank municipal securities dealer whose business is exclusively 
intrastate to file with its application on Form BD a statement that 
it is filing for registration as an intrastate dealer. Thus, a non-
bank municipal securities dealer cannot conduct an intrastate 
municipal securities business without being registered with the 
Commission.
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III. Rule 15b6-1

    The Commission is also amending Exchange Act Rule 15b6-1,\18\ which 
requires broker-dealers to file a notice of withdrawal on Form BDW in 
accordance with that form's instructions. The rule provides generally 
that withdrawal from broker-dealer registration automatically becomes 
effective 60 days after the filing date of the Form BDW, unless the 
Commission institutes a proceeding to impose terms or conditions upon 
the withdrawal.\19\ As amended, the rule will also permit broker-
dealers to consent to a delay in the effectiveness of their notice of 
withdrawal. In addition, the amendments will allow the Commission to 
extend the effective date of withdrawal for the period of time that the 
Commission determines is necessary or appropriate in the public 
interest or for the protection of investors. Under the rule, the 
Commission must make this determination by order.
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    \18\ 17 CFR 240.15b6-1. See also supra notes 6, 7 and 8 and 
accompanying text. The Commission is considering further amendments 
to Rules 15b6-1, 15Bc3-1, and 15Cc1-1 [17 CFR 240.15b6-1, 17 CFR 
15Bc3-1, and 17 CFR 15Cc1-1] to provide for electronic filing of 
Form BDW with Web CRD.
    \19\ The amendment to Rule 15b6-1 [17 CFR 240.15b6-1] is 
consistent with a similar provision under Section 15(b)(1) of the 
Exchange Act [15 U.S.C. Sec. 78o(b)]. Section 15(b)(1) generally 
requires broker-dealer registration to be granted within 45 days 
after the filing of Form BD, unless the applicant consents to a 
longer period of time.
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    As explained in the Proposing Release, the Commission determined 
that there may be circumstances in which it would be advisable to 
provide broker-dealers seeking to withdraw from registration greater 
flexibility in scheduling the termination of their business operations. 
While a broker-dealer must cease all securities activities when it 
files a request for withdrawal on Form BDW, it may need additional time 
to unwind its non-securities business operations before its Form BDW 
becomes effective. The Commission, too, may determine that it would be 
appropriate for a broker-dealer that is under investigation by the 
Commission to maintain its registered status in order to allow the 
Commission to conclude its pending investigation without

[[Page 25146]]

prematurely instituting a proceeding to impose conditions on the 
broker-dealer's withdrawal. In such instances, the interests of the 
Commission may be served by having the broker-dealer consent to an 
extension of the effective date of the broker-dealer's withdrawal from 
registration beyond the 60-day period currently provided under Rule 
15b6-1. The Commission's interests also may be served by permitting the 
Commission to extend the effective date for a period that it determines 
by order is necessary or appropriate in the public interest or for the 
protection of investors.
    Withdrawal from broker-dealer registration will continue to become 
effective automatically 60 days after the filing date in all other 
cases--that is, unless there has been express consent by the broker-
dealer, the issuance of a Commission order, or the initiation of a 
proceeding by the Commission extending the effective date of 
withdrawal.
    The Commission is similarly amending Rules 15Bc3-1 \20\ and 15Cc1-1 
\21\ relating to the withdrawal from registration of municipal 
securities dealers and government securities brokers and government 
securities dealers.
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    \20\ 17 CFR 240.15Bc3-1.
    \21\ 17 CFR 240.15Cc1-1.
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IV. Conforming Amendments

    The Commission is amending Exchange Act Rule 15b1-1 \22\ to clarify 
that an application for registration filed on Form BD with the Central 
Registration Depository shall be considered a ``report'' filed with the 
Commission for purposes of Section 15(b) of the Exchange Act.\23\ This 
amendment is intended to conform the language in Rule 15b1-1 with 
language already contained in corresponding rules governing the filing 
requirements for municipal securities dealers, government securities 
brokers, and government securities dealers. The Commission is also 
amending Rules 15b1-1, 15b3-1, 15b6-1, 15Ba2-2, 15Bc3-1, and 15Cc1-1 
under the Exchange Act \24\ to clarify that the filing of Form BD or 
Form BDW by broker-dealers, municipal securities dealers, and 
government securities brokers and government securities dealers would, 
in each instance, constitute a ``report'' filed with the Commission 
within the meaning of Sections 15(b), 15B(c), 15C(c) 17(a), 18(a), and 
32(a) of the Exchange Act.\25\ The Commission is also amending Rule 
15Ca1-1 to clarify when notice of government securities broker-dealer 
activities would be considered filed with the Commission.
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    \22\ 17 CFR 240.15b1-1.
    \23\ 15 U.S.C. 78o(b).
    \24\ 17 CFR 240.15b1-1, 17 CFR 240.15b3-1, 17 CFR 240.15b6-1, 17 
CFR 240.15Ba2-2, 17 CFR 240.15Bc3-1, and 17 CFR 240.15Cc1-1.
    \25\ 15 U.S.C. 78o(b), 78o-4(c), 78o-5(c), 78q(a), 78r(a), and 
78ff(a).
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V. Effective Date

    Use of the revised Form BDW adopted today is intended to coincide 
with the implementation of Web CRD scheduled to begin on August 1, 
1999. As a result, the amendments to Form BDW become effective on 
August 1, 1999. Thus, all Form BDW filings made on or after August 1, 
1999 must be made on the revised Form BDW adopted today.
    Amendments to Rules 15b1-1, 15b3-1, 15b6-1, 15Ba2-2, 15Bc3-1, 
15Ca1-1, and 15Cc1-1 become effective June 9, 1999.

VI. Cost Benefit Analysis

    Form BDW is filed only one time by a registered broker-dealer. The 
amendments to Form BDW adopted today do not materially alter the 
disclosure required on Form BDW. As a result, the costs to broker-
dealers of gathering the information necessary to complete a Form BDW 
will remain the same as those currently applicable under the present 
Form BDW.
    The actual filing of the Form on Web CRD will result in savings of 
approximately 15 minutes per Form over the current paper filing system 
according to staff estimates.
    In addition, the implementation of the amendments to Form BDW will 
facilitate the overall internet-based filing system of Web CRD covering 
Forms BD and BDW as well as U-4 and U-5. This internet-based filing 
system will provide ongoing efficiencies for filers, regulators, and 
the public through reductions in the time required for filing and 
accessing filed information.

VII. Effects on Competition, Efficiency, and Capital Formation

    Section 23(a)(2) of the Exchange Act \26\ requires the Commission, 
in adopting rules under the Exchange Act, to consider the competitive 
effects of such rules, if any, and to refrain from adopting a rule that 
would impose a burden on competition not necessary or appropriate in 
furthering the purpose of the Exchange Act. Moreover, Section 3 of the 
Exchange Act as amended by the National Securities Markets Improvement 
Act of 1996 provides that whenever the Commission is engaged in a 
rulemaking and is required to consider or determine whether an action 
is necessary or appropriate in the public interest, the Commission 
shall consider, in addition to the protection of investors, whether the 
action will promote efficiency, competition and capital formation.
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    \26\ 15 U.S.C. 78w(a)(2).
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    The Commission is of the view that the amendments to Form BDW, and 
the amendments to Rules 15b1-1, 15b3-1, 15b6-1, 15Ba2-2, 15Bc3-1, 
15Ca1-1, and 15Cc1-1 under the Exchange Act \27\ would not result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Exchange Act. As noted above, the 
form revisions and rule amendments adopted today will reduce the 
regulatory burden on broker-dealers by clarifying the information 
required to be filed on Form BDW and by facilitating the filing of Form 
BDW electronically with the CRD.
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    \27\ 17 CFR 240.15b1-1, 17 CFR 240.15b3-1, 17 CFR 240.15b6-1, 17 
CFR 240.15Ba2-2, 17 CFR 240.15Bc3-1, 17 CFR 240.15Ca1-1, and 17 CFR 
240.15Cc1-1.
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VIII. Regulatory Flexibility Act Certification

    Pursuant to Section 605(b) of the Regulatory Flexibility Act, 5 
U.S.C. 605(b), the Chairman of the Commission has certified that the 
adoption of the amendments would not have a significant economic impact 
on a substantial number of small entities.\28\ This certification, 
including the reasons therefor, is attached to this release as Appendix 
A.
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    \28\ Under the Exchange Act, a small broker or dealer entity is 
defined as ``a broker or dealer that had total capital (net worth 
plus subordinated liabilities) of less than $500,000 on the last 
business day of the preceding fiscal year as of which its audited 
statements were prepared pursuant to 240.17a-5(d) or, if not 
required to file such statements, a broker or dealer that had total 
capital (net worth plus subordinated liabilities) of less than 
$500,000 on the last business day of the preceding fiscal year (or 
in the time that it has been in business, if shorter) and is not 
affiliated with any person (other than a natural person) that is not 
a small business or small organization as defined in this section.'' 
17 CFR 240.010(c).
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IX. Paperwork Reduction Act Analysis

    Certain of the amendments to Form BDW contain ``collection of 
information'' requirements within the meaning of the Paperwork 
Reduction Act of 1995 (44 U.S.C. Section 3501 et seq.) (``PRA''). The 
Commission submitted the proposal to the Office of Management and 
Budget (``OMB'') for review in accordance with PRA requirements in 
effect at the time the amendments were proposed. The title for this 
collection of information is: ``Form BDW.'' OMB has approved the 
amendments to Form BDW and has assigned Form BDW OMB Number

[[Page 25147]]

3235-0018, with an expiration date of October 31, 1999.
    The Commission solicited public comment on the collection of 
information requirements contained in the Proposing Release. No 
comments were received.
    The amendments to Form BDW are designed to reduce the regulatory 
burden on broker-dealers and to improve the usefulness of the 
information to federal and state securities regulators by simplifying 
the form and clarifying its requirements. The amendments are also 
designed to implement changes to the CRD system, including providing 
for electronic filing of Form BDW.\29\
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    \29\ Rules 15b6-1, 15Bc3-1, and 15Cc1-1 under the Exchange Act 
[17 CFR 240.15b6-1, 17 CFR 240.15B3-1, and 17 CFR 240.15Cc1-1] 
require broker-dealers to file a notice of withdrawal on Form BDW in 
accordance with the instructions contained therein.
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    This collection of information will be used by the Commission to 
determine whether it is in the public interest to permit a broker-
dealer to withdraw its registration. This collection of information is 
also important to a withdrawing broker-dealer's customers and to the 
general public because it provides, among other things, the name and 
address of the broker-dealer's agent to contact regarding the broker-
dealer's unfinished business.
    The likely respondents to the proposed collection of information 
will be the 900 or fewer broker-dealers that withdraw from registration 
annually. They will be required to respond to the proposed collection 
of information before being allowed to withdraw their registration with 
the Commission. The Commission expects that the proposed collection of 
information on revised Form BDW will result in no additional burdens to 
broker-dealers seeking to withdraw from registration on Form BDW. The 
Commission estimates that the average burden to complete Form BDW will 
be approximately 15 minutes, or 0.25 hours. (based on the Commission 
staff's experience in administering the form). Approximately 900 
respondents file one response per year, resulting in an estimated total 
annual reporting burden of 225 hours.
    As adopted, respondents will be required to retain the collection 
of information for a period of no less than six years and to make it 
available for inspection upon a regulatory request. Disclosure of data 
solicited in this collection of information by the respondents is 
mandatory before a request for withdrawal from registration may become 
effective. Disclosure of social security numbers, however, is 
voluntary. The responses provided by the respondents will be made a 
matter of public record and will be available for inspection by any 
member of the public.
    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.

X. Statutory Basis

    The foregoing amendments are adopted pursuant to Sections 15(b), 
15B, 15C and 23(a) of the Exchange Act.

List of Subjects in 17 CFR Parts 240 and 249

    Broker-dealers, Reporting and recordkeeping requirements, 
Securities.

Text of Amendments

    In accordance with the foregoing, Title 17, Chapter II of the Code 
of Federal Regulations is amended as follows:

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 
1934

    1. The authority citation for part 240 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77eee, 
77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78f, 78i, 78j, 78j-1, 78k, 
78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78ll(d), 
78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4 and 
80b-11, unless otherwise noted.
* * * * *
    2. By amending Sec. 240.15b1-1 by revising paragraph (c) to read as 
follows:


Sec. 240.15b1-1  Application for registration of brokers or dealers.

* * * * *
    (c) An application for registration that is filed with the Central 
Registration Depository pursuant to this section shall be considered a 
``report'' filed with the Commission for purposes of Sections 15(b), 
17(a), 18(a), 32(a) (15 U.S.C. 78o(b), 78q(a), 78r(a), 78ff(a)) and 
other applicable provisions of the Act.
    3. By amending Sec. 240.15b3-1 by revising paragraph (c) to read as 
follows:


Sec. 240.15b3-1  Amendments to application.

* * * * *
    (c) Every amendment filed with the Central Registration Depository 
pursuant to this section shall constitute a ``report'' filed with the 
Commission within the meaning of Sections 15(b), 17(a), 18(a), 32(a) 
(15 U.S.C. 78o(b), 78q(a), 78r(a), 78ff(a)) and other applicable 
provisions of the Act.
    4. By revising Sec. 240.15b6-1 to read as follows:


Sec. 240.15b6-1  Withdrawal from registration.

    (a) Notice of withdrawal from registration as a broker or dealer 
pursuant to Section 15(b) of the Act shall be filed on Form BDW (17 CFR 
249.501a) in accordance with the instructions contained therein. Every 
notice of withdrawal from registration as a broker or dealer shall be 
filed with the Central Registration Depository (operated by the 
National Association of Securities Dealers, Inc.) in accordance with 
applicable filing requirements. Prior to filing a notice of withdrawal 
from registration on Form BDW (17 CFR 249.501a), a broker or dealer 
shall amend Form BD (17 CFR 249.501) in accordance with Sec. 240.15b3-
1(a) to update any inaccurate information.
    (b) A notice of withdrawal from registration filed by a broker or 
dealer pursuant to Section 15(b) of the Act (15 U.S.C. 78o(b)) shall 
become effective for all matters (except as provided in this paragraph 
(b) and in paragraph (c) of this section) on the 60th day after the 
filing thereof with the Commission, within such longer period of time 
as to which such broker or dealer consents or which the Commission by 
order may determine as necessary or appropriate in the public interest 
or for the protection of investors, or within such shorter period of 
time as the Commission may determine. If a notice of withdrawal from 
registration is filed with the Commission at any time subsequent to the 
date of the issuance of a Commission order instituting proceedings 
pursuant to Section 15(b) of the Act (15 U.S.C. 78o(b)) to censure, 
place limitations on the activities, functions or operations of, or 
suspend or revoke the registration of, such broker or dealer, or if 
prior to the effective date of the notice of withdrawal pursuant to 
this paragraph (b), the Commission institutes such a proceeding or a 
proceeding to impose terms or conditions upon such withdrawal, the 
notice of withdrawal shall not become effective pursuant to this 
paragraph (b) except at such time and upon such terms and conditions as 
the Commission deems necessary or appropriate in the public interest or 
for the protection of investors.
    (c) With respect to a broker's or dealer's registration status as a 
member within the meaning of Section 3(a)(2) of the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78ccc(a)(2)) for purposes of the 
application of Sections 5, 6, and 7 (15 U.S.C. 78eee, 78fff, and 78fff-
1) thereof to customer claims arising prior to the effective date of 
withdrawal pursuant to paragraph (b) of this section, the effective 
date of a

[[Page 25148]]

broker's or dealer's withdrawal from registration pursuant to this 
paragraph (c) shall be six months after the effective date of 
withdrawal pursuant to paragraph (b) of this section or such shorter 
period of time as the Commission may determine.
    (d) Every notice of withdrawal filed with the Central Registration 
Depository pursuant to this section shall constitute a ``report'' filed 
with the Commission within the meaning of Sections 15(b), 17(a), 18(a), 
32(a) (15 U.S.C. 78o(b), 78q(a), 78r(a), 78ff(a)) and other applicable 
provisions of the Act.
    5. By amending Sec. 240.15Ba2-2 by revising paragraph (d) to read 
as follows:


Sec. 240.15Ba2-2  Application for registration of non-bank municipal 
securities dealers whose business is exclusively intrastate.

* * * * *
    (d) Every application or amendment filed with the Central 
Registration Depository pursuant to this section shall constitute a 
``report'' filed with the Commission within the meaning of Sections 
15(b), 15B(c), 17(a), 18(a), 32(a) (15 U.S.C. 78o(b), 78o-4(c), 78q(a), 
78r(a), 78ff(a)) and other applicable provisions of the Act.
    6. By revising Sec. 240.15Bc3-1 to read as follows:


Sec. 240.15Bc3-1  Withdrawal from registration of municipal securities 
dealers.

    (a) Notice of withdrawal from registration as a municipal 
securities dealer pursuant to Section 15B(c) (15 U.S.C. 78o-4(c)) shall 
be filed on Form MSDW (17 CFR 249.1110), in the case of a municipal 
securities dealer which is a bank or a separately identifiable 
department or division of a bank, or Form BDW (17 CFR 249.501a), in the 
case of any other municipal securities dealer, in accordance with the 
instructions contained therein. Prior to filing a notice of withdrawal 
from registration on Form MSDW (17 CFR 249.1110) or Form BDW (17 CFR 
249.501a), a municipal securities dealer shall amend Form MSD (17 CFR 
249.1100) in accordance with Sec. 240.15Ba2-1(b) or amend Form BD (17 
CFR 249.501) in accordance with Sec. 240.15Ba2-2(c) to update any 
inaccurate information.
    (b) Every notice of withdrawal from registration as a municipal 
securities dealer that is filed on Form BDW (17 CFR 249.501a) shall be 
filed with the Central Registration Depository (operated by the 
National Association of Securities Dealers, Inc.) in accordance with 
applicable filing requirements. Every notice of withdrawal on Form MSDW 
(17 CFR 249.1110) shall be filed with the Commission.
    (c) A notice of withdrawal from registration filed by a municipal 
securities dealer pursuant to Section 15B(c) (15 U.S.C. 78o-4(c)) shall 
become effective for all matters on the 60th day after the filing 
thereof with the Commission, within such longer period of time as to 
which such municipal securities dealer consents or which the Commission 
by order may determine as necessary or appropriate in the public 
interest or for the protection of investors, or within such shorter 
period of time as the Commission may determine. If a notice of 
withdrawal from registration is filed with the Commission at any time 
subsequent to the date of the issuance of a Commission order 
instituting proceedings pursuant to Section 15B(c) (15 U.S.C. 78o-4(c)) 
to censure, place limitations on the activities, functions or 
operations of, or suspend or revoke the registration of, such municipal 
securities dealer, or if prior to the effective date of the notice of 
withdrawal pursuant to this paragraph (c), the Commission institutes 
such a proceeding or a proceeding to impose terms or conditions upon 
such withdrawal, the notice of withdrawal shall not become effective 
pursuant to this paragraph (c) except at such time and upon such terms 
and conditions as the Commission deems necessary or appropriate in the 
public interest or for the protection of investors.
    (d) Every notice of withdrawal filed with the Central Registration 
Depository pursuant to this section shall constitute a ``report'' filed 
with the Commission within the meaning of Sections 15B(c), 17(a), 
18(a), 32(a) (15 U.S.C. 78o-4(c), 78q(a), 78r(a), 78ff(a)) and other 
applicable provisions of the Act.
    7. By amending Sec. 240.15Ca1-1 by revising paragraph (c) to read 
as follows:


Sec. 240.15Ca1-1  Notice of government securities broker-dealer 
activities.

* * * * *
    (c) Any notice required pursuant to this section shall be 
considered filed with the Commission if it is filed with the Central 
Registration Depository (operated by the National Association of 
Securities Dealers, Inc.) in accordance with applicable filing 
requirements.
    8. By revising Sec. 240.15Cc1-1 to read as follows:


Sec. 240.15Cc1-1  Withdrawal from registration of government securities 
brokers or government securities dealers.

    (a) Notice of withdrawal from registration as a government 
securities broker or government securities dealer pursuant to Section 
15C(a)(1)(A) of the Act (15 U.S.C. 78o-5(a)(1)(A)) shall be filed on 
Form BDW (17 CFR 249.501a) in accordance with the instructions 
contained therein. Every notice of withdrawal from registration as a 
government securities broker or dealer shall be filed with the Central 
Registration Depository (operated by the National Association of 
Securities Dealers, Inc.) in accordance with applicable filing 
requirements. Prior to filing a notice of withdrawal from registration 
on Form BDW (17 CFR 249.501a), a government securities broker or 
government securities dealer shall amend Form BD (17 CFR 249.501) in 
accordance with 17 CFR 400.5(a) to update any inaccurate information.
    (b) A notice of withdrawal from registration filed by a government 
securities broker or government securities dealer shall become 
effective for all matters on the 60th day after the filing thereof with 
the Commission, within such longer period of time as to which such 
government securities broker or government securities dealer consents 
or the Commission by order may determine as necessary or appropriate in 
the public interest or for the protection of investors, or within such 
shorter period of time as the Commission may determine. If a notice of 
withdrawal from registration is filed with the Commission at any time 
subsequent to the date of the issuance of a Commission order 
instituting proceedings pursuant to Section 15C(c) (15 U.S.C. 78o-5(c)) 
to censure, place limitations on the activities, functions or 
operations of, or suspend or revoke the registration of such government 
securities broker or government securities dealer, or if prior to the 
effective date of the notice of withdrawal pursuant to this paragraph 
(b), the Commission institutes such a proceeding or a proceeding to 
impose terms or conditions upon such withdrawal, the notice of 
withdrawal shall not become effective pursuant to this paragraph (b) 
except at such time and upon such terms and conditions as the 
Commission deems necessary or appropriate in the public interest or for 
the protection of investors.
    (c) Every notice of withdrawal filed with the Central Registration 
Depository pursuant to this section shall constitute a ``report'' filed 
with the Commission within the meaning of Sections 15(b), 15C(c), 
17(a), 18(a), 32(a) (15 U.S.C. 78o(b), 78o-5(c), 78q(a), 78r(a), 
78ff(a)) and other applicable provisions of the Act.

[[Page 25149]]

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

    9. The authority citation for part 249 continues to read in part as 
follows:

    Authority: 15 U.S.C. 78a, et seq., unless otherwise noted;

* * * * *
    10. By revising Form BDW (referenced in Sec. 249.501a) to read as 
follows:

    Note: Form BDW does not and the amendments will not appear in 
the Code of Federal Regulations. Revised Form BDW is attached as an 
Appendix to this document.

    Dated: April 30, 1999.

    By the Commission.
Margaret H. McFarland,
Deputy Secretary.

Appendix A

Securities and Exchange Commission Regulatory Flexibility Act 
Certification

    I, Arthur Levitt, Jr., Chairman of the U.S. Securities and 
Exchange Commission (``Commission''), hereby certify, pursuant to 5 
U.S.C. Sec. 605(b), that the proposed amendments to Form BDW and 
Rules 15b1-1, 15b3-1, 15b6-1, 15Ba2-2, 15Bc3-1, 15Ca1-1, and 15Cc1-1 
(``Rules'') under the Securities Exchange Act of 1934 (``Exchange 
Act'') would not, if adopted, have a significant economic impact on 
a substantial number of small entities. The proposed amendments 
would facilitate implementation of filing of Form BDW (the form on 
which broker-dealers request withdrawal from registration) via the 
internet as part of Web CRD. The Commission receives roughly 900 
Forms BDW a year. The proposed amendments would also clarify certain 
provisions of Form BDW and its status as a report under the Exchange 
Act, as well as permit the Commission to delay, or broker-dealers to 
consent to delay, the effectiveness of a filed Form BDW. The 
proposed amendments should not materially affect the substance of 
the required disclosures or the filing and delivery obligations 
under Form BDW or the Rules. Consequently, no new preparation, 
printing, or distribution costs would be incurred. Finally, the 
proposed amendments would impose no new recordkeeping requirements 
or compliance burdens on small entities. Accordingly, the proposed 
amendments would not have a significant economic impact on a 
substantial number of small entities.

    Dated: April 30, 1999.
Arthur Levitt, Jr.,
Chairman.

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[FR Doc. 99-11359 Filed 5-7-99; 8:45 am]
BILLING CODE 8010-01-C