[Federal Register Volume 64, Number 113 (Monday, June 14, 1999)]
[Notices]
[Pages 31884-31885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14988]


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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-11, SEC File No. 270-94, OMB Control No. 3235-0085


[[Page 31885]]


    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 a request for extension of the previously approved 
collection of information discussed below.
    Rule 17a-11 (17 CFR 240.17a-11) requires broker-dealers to give 
notice when certain specified events occur. Specifically, the rule 
requires a broker-dealer to give notice of a net capital deficiency on 
the same day that the net capital deficiency is discovered or a broker-
dealer is informed by its designated examining authority or the 
Commission that it is, or has been, in violation of its minimum 
requirement under Rule 15c3-1 (17 CFR 240.15c3-1) of the Securities 
Exchange Act of 1934 (``Exchange Act'').
    Rule 17a-11 also requires a broker-dealer to send notice promptly 
(within 24 hours) after the broker-dealer's aggregate indebtedness is 
in excess of 1,200 percent of its net capital, its net capital is less 
than 5 percent of aggregate debit items, or its total net capital is 
less than 120 percent of its required minimum net capital. In addition, 
a broker-dealer must give notice if it fails to make and keep current 
books and records required by Rule 17a-3 (17 CFR 240.17a-3), if any 
material inadequacy is discovered as defined in Rule 17a-5(g) (17 CFR 
240.17a-5(g)), and if backtesting exceptions are identified pursuant to 
Appendix F of Rule 15c3-1 (17 CFR 15c3-1f) for a broker-dealer 
registered as an OTC derivatives dealer.
    The notice required by the rule alerts the Commission, self-
regulatory organizations (``SROs''), and the Commodity Futures Trading 
Commission (``CFTC'') if the broker-dealer is registered as a futures 
commission merchant, which have oversight responsibility over broker-
dealers, to those firms having financial or operational problems.
    Because broker-dealers are required to file pursuant to Rule 17a-11 
only when certain specified events occur, it is difficult to develop a 
meaningful figure for the cost of compliance with Rule 17a-11. The 
Commission receives approximately 656 notices under this rule each year 
from approximately 362 broker-dealers. Each broker-dealer will spend 
approximately one hour per year complying with Rule 17a-11. 
Accordingly, the aggregate burden is estimated to be approximately 656 
hours. With respect to those broker-dealers that must give notice under 
Rule 17a-11, the cost is approximately $10 per response for a total 
annual expense for all broker-dealers of $6,560.
    Broker-dealers providing notice and reports under Rule 17a-11 are 
required to preserve such records under rule 17a-4 (17 CFR 240.17a-4) 
for a period of not less than three years, the first two years in an 
accessible place. Compliance with the Rule is mandatory. The Commission 
will generally not publish or make available to any person notice or 
reports received pursuant to Rule 17a-11. The Commission believes that 
information obtained under Rule 17a-11 relates to a condition report 
prepared for the use of the Commission, other federal governmental 
authorities, and securities industry self-regulatory organizations 
responsible for the regulation or supervision of financial 
institutions.
    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: June 7, 1999.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-14988 Filed 6-11-99; 8:45 am]
BILLING CODE 8010-01-M