[Federal Register Volume 69, Number 138 (Tuesday, July 20, 2004)]
[Notices]
[Page 43482]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-16439]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50020]


Extension of Order Regarding Broker-Dealer Financial Statement 
Requirements Under Section 17 of the Exchange Act

July 14, 2004.
    The Securities and Exchange Commission (``Commission'') is 
extending its Order, originally issued on August 4, 2003 (the ``2003 
Order'') \1\ under Section 17(e) of the Securities Exchange Act of 1934 
(``Exchange Act''), regarding audits of financial statements of broker-
dealers that are not issuers (``non-public broker-dealers''). The 2003 
Order provided that non-public broker-dealers may file with the 
Commission and may send to their customers documents and information 
required by Section 17(e) certified by an independent public 
accountant, instead of by a registered public accounting firm, until 
January 1, 2005, unless rules are in place regarding Board registration 
of auditors of non-public broker-dealers that set an earlier date.
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    \1\ Exchange Act Release No. 48281.
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    Section 17(e)(1)(A) of the Exchange Act requires that every 
registered broker-dealer annually file with the Commission a certified 
balance sheet and income statement, and Section 17(e)(1)(B) requires 
that the broker-dealer annually send to its customers its ``certified 
balance sheet.'' \2\ The Sarbanes-Oxley Act of 2002 (``Act'') \3\ 
established the Public Company Accounting Oversight Board (``Board'') 
\4\ and amended Section 17(e) to replace the words ``an independent 
public accountant'' with ``a registered public accounting firm.'' \5\
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    \2\ Exchange Act Rule 17a-5 requires registered broker-dealers 
to provide to the Commission and to customers of the broker-dealer 
other specified financial information.
    \3\ Public Law 107-204.
    \4\ Section 101 of the Act.
    \5\ Section 205(c)(2) of the Act.
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    The Act establishes a deadline for registration with the Board of 
auditors of financial statements of ``issuers,'' as that term is 
defined in the Act.\6\ The Act does not provide a deadline for 
registration of auditors of non-public broker-dealers.
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    \6\ Section 2 of the Act defines ``issuer.'' Section 102 of the 
Act establishes a specific deadline by which auditors of issuers 
must register with the Board. Based on the statutory deadline of 180 
days after the Commission determined the Board was ready to carry 
out the requirements of the Act, that date was October 22, 2003. See 
Exchange Act Release No. 48180 (July 16, 2003). The registration 
deadline for non-U.S. public accounting firms has been extended to 
July 19, 2004. See Exchange Act Release No. 49473 (March 25, 2004).
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    The 2003 Order expires January 1, 2005. Application of registration 
requirements and procedures to auditors of non-public broker-dealers is 
still being considered. The Commission has therefore determined that 
extending the Order is consistent with the public interest and the 
protection of investors.
    Accordingly, it is ordered, pursuant to Section 17(e) of the 
Exchange Act, that non-public broker-dealers may file with the 
Commission a balance sheet and income statement and may send to their 
customers a balance sheet certified by an independent public 
accountant, instead of by a registered public accounting firm, for 
fiscal years ending before January 1, 2006, unless the Commission has 
approved rules regarding Board registration of auditors of non-public 
broker-dealers that set an earlier date.

By the Commission.
Margaret H. McFarland,
Deputy Secretary.***FOOTNOTES**
[FR Doc. 04-16439 Filed 7-19-04; 8:45 am]
BILLING CODE 8010-01-P