[Federal Register Volume 89, Number 56 (Thursday, March 21, 2024)]
[Notices]
[Pages 20258-20259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-05993]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-667, OMB Control No. 3235-0745]


Submission for OMB Review; Comment Request; Extension: Rule 18a-5

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 18a-
5, under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
    Rule 18a-5 enumerates the recordkeeping and reporting requirements 
for security-based swap dealers (``SBSDs'') and major security-based 
swap participants (``MSBSPs''). More specifically, Rule 18a-5 
establishes recordkeeping requirements applicable to stand-alone SBSDs, 
stand-alone MSBSPs, bank SBSDs, and bank MSBSPs. Rule 18a-5 was modeled 
on Rule 17a-3 under the Exchange Act, which applies to broker-dealers, 
but Rule 18a-5 does not include a parallel requirement for every 
requirement in Rule 17a-3 because some of the requirements in Rule 17a-
3 relate to activities that are not expected or permitted of SBSDs and 
MSBSPs. The collections of information under Rule 18a-5 include the 
following types of

[[Page 20259]]

records that are required to be created: trade blotters, general 
ledger, ledgers for customers and non-customer accounts, stock record, 
memoranda of brokerage orders, memoranda of proprietary orders, 
confirmations, accountholder information, options positions, trial 
balances and computation of net capital, associated person's employment 
application, account equity and margin calculations under Rule 18a-3, 
possession or control requirements for security-based swap customers, 
customer reserve requirements for security-based swap customers, 
unverified transactions, political contributions, and compliance with 
business conduct requirements. The purpose of requiring stand-alone 
SBSDs, stand-alone MSBSPs, bank SBSDs, and bank MSBSPs to create the 
records specified in Rule 18a-5 is to enhance regulators' ability to 
protect investors. These records and the information contained therein 
are used by examiners and other representatives of the Commission to 
determine whether stand-alone SBSDs, stand-alone MSBSPs, bank SBSDs, 
and bank MSBSPs are in compliance with the Commission's anti-fraud and 
anti-manipulation rules, financial responsibility program, and other 
laws, rules, and regulations.
    Not all types of records enumerated in Rule 18a-5 are required to 
be made by each of the entities to which Rule 18a-5 applies. For 
example, Rule 18a-5 requires thirteen types of records to be made and 
kept current by stand-alone SBSDs and stand-alone MSBSPs.\1\ Rule 18a-5 
also requires three types of records to be made and kept current by 
stand-alone SBSDs.\2\ Rule 18a-5 requires 10 types of records to be 
made and kept current by bank SBSDs and bank MSBSPs, all of which are 
limited to the firm's business as an SBSD or MSBSP.\3\ Further, Rule 
18a-5 includes paragraphs (b)(9), (b)(10), and (b)(12) which requires 
bank SBSDs to make and keep current various records for security-based 
swaps.\4\
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    \1\ See Rule 18a-5 (paragraph (a)(1) (trade blotters); paragraph 
(a)(2) (general ledgers); paragraph (a)(3) (ledgers of customer and 
non-customer accounts); paragraph (a)(4) (stock record); paragraph 
(a)(5) (memoranda of proprietary orders); paragraph (a)(6) 
(confirmations); paragraph (a)(7) (accountholder information); 
paragraph (a)(8) (options positions); paragraph (a)(9) (trial 
balances and computation of net capital); paragraph (a)(10) 
(associated person's application); paragraph (a)(12) (Rule 18a-3 
calculations); paragraph (a)(15) (unverified transactions); 
paragraph (a)(17) (compliance with business conduct standards)).
    \2\ See Rule 18a-5 (paragraph (a)(13) (compliance with Rule 18a-
4 possession or control requirements); paragraph (a)(14) (Rule 18a-4 
reserve account computations); and paragraph (a)(16) (political 
contributions)).
    \3\ See Rule 18a-5 (paragraph (b)(1) (trade blotters); paragraph 
(b)(2) (general ledgers); paragraph (b)(3) (stock record); paragraph 
(b)(4) (memoranda of brokerage orders); paragraph (b)(5) (memoranda 
of proprietary orders); paragraph (b)(6) (confirmations); paragraph 
(b)(7) accountholder information); paragraph (b)(8) (associated 
person's application); paragraph (b)(11) (unverified transactions); 
and paragraph (b)(13) (compliance with business conduct 
requirements)).
    \4\ See Rule 18a-5 (paragraph (b)(9) (possession or control 
requirements under Rule 18a-4); paragraph (b)(10) (customer reserve 
requirements under Rule 18a-4); and paragraph (b)(12) (political 
contributions)).
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    As of November 30, 2023, there are 11 stand-alone SBSDs, zero 
stand-alone MSBSPs, 29 bank SBSDs, and zero bank MSBSPs registered with 
the Commission. The Commission estimates that each recordkeeping 
provision of Rule 18a-5 imposes on each firm that is subject to the 
provision an initial burden and an ongoing annual burden. The total 
initial industry hour burden attributable to Rule 18a-5 is estimated to 
be 11,060 hours in the first year and the total industry ongoing hour 
burden attributable to Rule 18a-5 is estimated to be 13,825 hours per 
year (including the first year). Over a three-year period, the total 
estimated industry burden is estimated to be 52,535 hours, or about 
17,511 hours per year when annualized. These burdens are recordkeeping 
burdens.
    In addition, the Commission estimates that Rule 18a-5 causes a 
stand-alone SBSD or stand-alone MSBSP to incur an initial dollar cost 
of approximately $1,000 to purchase recordkeeping system software and 
an ongoing dollar cost of $4,650 per year to provide adequate physical 
space and computer hardware and software for storage. As of November 
30, 2023, there are 11 respondents (11 stand-alone SBSDs and zero 
stand-alone MSBSPs), resulting in an estimated industry-wide initial 
burden of $11,000 and an industry-wide ongoing burden of $51,150 per 
year. Over a three-year period, the total estimated industry burden 
would be $164,450, or about $54,817 per year when annualized.
    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 April 22, 2024 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].

    Dated: March 18, 2024.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-05993 Filed 3-20-24; 8:45 am]
BILLING CODE 8011-01-P