[Federal Register Volume 79, Number 36 (Monday, February 24, 2014)]
[Notices]
[Pages 10210-10211]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-03785]


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SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: U.S. 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'') has submitted to the Office of 
Management and Budget (``OMB'') a request for approval of extension of 
the previously approved 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. 78a et seq.) (``Exchange Act'').
    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 that they 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 the 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 broker-dealer to account for all securities in its 
possession or subject to its control or direction. Many broker-dealers 
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 financial reports filed with the Commission--
may spend little or no time complying with Rule 17a-13, 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.
    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.

[[Page 10211]]

    The public may view background documentation for this information 
collection at the following Web site: www.reginfo.gov. Comments should 
be directed to: (i) Desk Officer for the Securities and Exchange 
Commission, Office of Information and Regulatory Affairs, Office of 
Management and Budget, Room 10102, New Executive Office Building, 
Washington, DC 20503, or by sending an email to: [email protected]; and (ii) Thomas Bayer, Director/Chief Information 
Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 
F Street, NE Washington, DC 20549, or by sending an email to: [email protected]. Comments must be submitted to OMB within 30 days of 
this notice.

    Dated: February 18, 2014.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-03785 Filed 2-21-14; 8:45 am]
BILLING CODE 8011-01-P