[Federal Register Volume 67, Number 78 (Tuesday, April 23, 2002)]
[Notices]
[Pages 19782-19783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-9881]


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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-13; SEC File No. 270-27; OMB Control No. 3235-
0035

    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 collection of information on the following rule: 17 CFR 
240.17a-13 Quarterly Security Counts to be Made by Certain Exchange 
Members, Brokers, and Dealers.
    Rule 17a-13(b) generally requires that at least once each calendar 
quarter, all registered brokers and dealers physically examine and 
count all 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 
counts, 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

[[Page 19783]]

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 91% of all registered broker-dealers are subject to Rule 
17a-13. Accordingly, approximately 6,579 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 657,900 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\ 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.
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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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    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 16, 2002.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-9881 Filed 4-22-02; 8:45 am]
BILLING CODE 8010-01-P