[Federal Register Volume 88, Number 92 (Friday, May 12, 2023)]
[Notices]
[Pages 30809-30810]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-10114]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-455, OMB Control No. 3235-0514]


Submission for OMB Review; Comment Request; Extension: Rule 8c-1

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 
20549-2736

    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\
---------------------------------------------------------------------------

    \1\ See Exchange Act Release No. 2690 (November 15, 1940); 
Exchange Act Release No. 9428 (December 29, 1971).
---------------------------------------------------------------------------

    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 43 respondents as of the end of 2022 (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 approximately 
1,935 responses per year.\2\ Each response takes approximately 0.5 
hours to complete. Therefore, the total third-party disclosure burden 
per year is approximately 968 hours.\3\
---------------------------------------------------------------------------

    \2\ 43 respondents x 45 annual responses = 1,935 aggregate total 
of annual responses.
    \3\ 1,935 responses x 0.5 hours = 967.5 hours, rounded up to 968 
hours.
---------------------------------------------------------------------------

    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 by June 12, 2023 to (i) www.reginfo.gov/public/do/PRAMain and (ii) David Bottom, Director/Chief Information 
Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F 
Street NE, Washington, DC 20549, or by sending an email to: 
[email protected].


[[Page 30810]]


    Dated: May 8, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-10114 Filed 5-11-23; 8:45 am]
BILLING CODE 8011-01-P