[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
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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
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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