[Federal Register Volume 85, Number 104 (Friday, May 29, 2020)]
[Notices]
[Page 32432]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11595]
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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 FOIA Services, 100 F Street NE, Washington, DC
20549-2736
Extension:
Rule 8c-1, SEC File No. 270-455, OMB Control No. 3235-0514
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 8c-1
(17 CFR 240.8c-1), under the Securities Exchange Act of 1934
(``Exchange Act'') (15 U.S.C. 78a et seq.).
Rule 8c-1 generally prohibits a broker-dealer from using its
customers' securities as collateral to finance its own trading,
speculating, or underwriting transactions. More specifically, Rule 8c-1
states three main principles: (1) A broker-dealer is prohibited from
commingling the securities of different customers as collateral for a
loan without the consent of each customer; (2) a broker-dealer cannot
commingle customers' securities with its own securities under the same
pledge; and (3) a broker-dealer can only pledge its customers'
securities to the extent that customers are in debt to the broker-
dealer. Additionally, Rule 8c-1 requires broker-dealers to make certain
written notifications to pledgees in connection with such use of
customer securities as collateral.\1\
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\1\ See Exchange Act Release No. 2690 (November 15, 1940);
Exchange Act Release No. 9428 (December 29, 1971).
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The information required by Rule 8c-1 is necessary for the
execution of the Commission's mandate under the Exchange Act to prevent
broker-dealers from hypothecating or arranging for the hypothecation of
any securities carried for the account of any customer under certain
circumstances. In addition, the information required by Rule 8c-1
provides important investor protections.
There are approximately 46 respondents as of year-end 2019 (i.e.,
broker-dealers that conducted business with the public, filed Part II
of the FOCUS Report, did not claim an exemption from the Reserve
Formula computation, and reported that they had a bank loan during at
least one quarter of the current year). Each respondent makes an
estimated 45 annual responses, for an aggregate total of 2,070
responses per year.\2\ Each response takes approximately 0.5 hours to
complete. Therefore, the total third-party disclosure burden per year
is 1,035 hours.\3\
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\2\ 46 respondents x 45 annual responses = 2,070 aggregate total
of annual responses.
\3\ 2,070 responses x 0.5 hours = 1,035 hours.
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The retention period for the recordkeeping requirement under Rule
8c-1 is three years. The recordkeeping requirement under Rule 8c-1 is
mandatory to ensure that broker-dealers do not commingle their
securities or use them to finance the broker-dealers' proprietary
business. This rule does not involve the collection of confidential or
personal identifiable information.
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.
The public may view background documentation for this information
collection at the following website: www.reginfo.gov. Find this
particular information collection by selecting ``Currently under 30-day
Review--Open for Public Comments'' or by using the search function.
Written comments and recommendations for the proposed information
collection should be sent within 30 days of publication of this notice
to (i) www.reginfo.gov/public/do/PRAMain and (ii) David Bottom,
Director/Chief Information Officer, Securities and Exchange Commission,
c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or by
sending an email to: [email protected].
Dated: May 26 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-11595 Filed 5-28-20; 8:45 am]
BILLING CODE 8011-01-P