[Federal Register Volume 78, Number 245 (Friday, December 20, 2013)]
[Notices]
[Pages 77173-77174]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-30274]


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SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of Investor Education and Advocacy, Washington, DC 
20549-0213.

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 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and 
Exchange Commission (``Commission'') is soliciting comments on the 
collection of information provided for in Rule 17a-13 (17 CFR 240.17a-
13) under the Securities Exchange Act of 1934 (15 U.S.C. 78 et seq.) 
(``Exchange Act''). The Commission plans to submit this existing 
collection of information to the Office of Management and Budget 
(``OMB'') for extension and approval.
    Rule 17a-13(b) (17 CFR 240.17a-13(b)) generally requires that at 
least once each calendar quarter, all registered brokers-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) (17 CFR 240.17a-13(c)) provides that 
under specified conditions, the count, 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 require broker-dealers to file a report with the Commission, 
discrepancies between a broker-dealer's records and the securities 
counts may be required to be reported, for example, as a loss on Form 
X-17a-5 (17 CFR 248.617), which must be filed with the Commission under 
Exchange Act Rule 17a-5 (17 CFR 240.17a-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. Rule 17a-13 also does not 
apply to certain broker-dealers required to register only because they 
effect transactions in securities futures products.
    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 applicable self-regulatory 
organizations (``SROs'') to those firms experiencing back-office 
operational issues.
    Currently, there are approximately 4,462 broker-dealers registered 
with the Commission. However, given the variability in their 
businesses, it is difficult to quantify how many hours per year each 
broker-dealer spends complying with Rule 17a-13. As noted, Rule 17a-13 
requires a respondent to account for all securities in its possession 
or subject to its control or direction. Many respondents hold few, if 
any, securities; while others hold large quantities. Therefore, the 
time burden of complying with Rule 17a-13 will depend on respondent-
specific factors, including a broker-dealer's size, number of 
customers, and proprietary trading activity. The staff estimates that 
the average time spent per respondent is 100 hours per year on an 
ongoing basis to maintain the records required under Rule 17a-13. This 
estimate takes into account the fact that more than half of the 4,462 
respondents--according to

[[Page 77174]]

financial reports filed with the Commission--may spend little or no 
time complying with the rule, given that they do not do a public 
securities business or do not hold inventories of securities. For these 
reasons, the staff estimates that the total compliance burden per year 
is 446,200 hours (4,462 respondents x 100 hours/respondent).
    The records required to be made by Rule 17a-13 are available only 
to Commission examination staff, state securities authorities, and 
applicable 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.
    Written comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information has 
practical utility; (b) the accuracy of the Commission's estimates of 
the burden of the proposed collection of information; (c) ways to 
enhance the quality, utility, and clarity of the information collected; 
and (d) ways to minimize the burden of the collection of information on 
respondents, including through the use of automated collection 
techniques or other forms of information technology. Consideration will 
be given to comments and suggestions submitted in writing within 60 
days of this publication.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information under the PRA unless it 
displays a currently valid OMB control number.
    Please direct your written comments to: Thomas Bayer, Director/
Chief Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 100 F Street NE., Washington, DC 20549, or send an email 
to: [email protected].

    Dated: December 16, 2013.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-30274 Filed 12-19-13; 8:45 am]
BILLING CODE 8011-01-P