81 FR 57963 - Proposed Collection; Comment Request
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 164 (August 24, 2016)
Federal Register Volume 81, Issue 164 (August 24, 2016)
| Page Range | 57963-57964 | |
| FR Document | 2016-20256 |
[Federal Register Volume 81, Number 164 (Wednesday, August 24, 2016)] [Notices] [Pages 57963-57964] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-20256] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Proposed Collection; 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 17a-3, SEC File No. 270-026, OMB Control No. 3235-0033. 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 existing collection of information provided for in Rule 17a-3 (17 CFR 240.17a- 3), under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). The Commission plans to submit this existing collection of information to the Office of Management and Budget (``OMB'') for extension and approval. Rule 17a-3 under the Securities Exchange Act of 1934 establishes minimum standards with respect to business records that broker-dealers registered with the Commission must make and keep current. These records are maintained by the broker-dealer (in accordance with a separate rule), so they can be used by the broker-dealer and reviewed by Commission examiners, as well as other regulatory authority examiners, during inspections of the broker-dealer. The collections of information included in Rule 17a-3 are necessary to provide Commission, self-regulatory organization (``SRO'') and state examiners to conduct effective and efficient examinations to determine whether broker-dealers are complying with relevant laws, rules, and regulations. If broker-dealers were not required to create these baseline, standardized records, Commission, SRO and state examiners could be unable to determine whether broker-dealers are in compliance with the Commission's antifraud and anti-manipulation rules, financial responsibility program, and other Commission, SRO, and State laws, rules, and regulations. As of April 1, 2016 there were 4,104 broker-dealers registered with the Commission. The Commission estimates that these broker-dealer respondents incur a total burden of 2,763,566 hours per year to comply with Rule 17a-3. In addition, Rule 17a-3 contains ongoing operation and maintenance costs for broker-dealers, including the cost of postage to provide customers with account information, and costs for equipment and systems development. The Commission estimates that under Rule 17a-3(a)(17), approximately 41,143,233 customers will need to be provided with information regarding their account on a yearly basis. The Commission estimates that the postage costs associated with providing those customers with copies of their account record information would be approximately $13,577,267 per year (41,143,233 x $0.33).\1\ The staff estimates that broker-dealers establishing liquidity, credit, and market risk management controls pursuant to Rule 17a-3(a)(23) incur one-time startup costs of $924,000, or $308,000 amortized over a three- year approval period, to hire outside counsel to review the controls. The staff further estimates that the ongoing equipment and systems development costs relating to Rule 17a-3 for the industry would be about $30,677,094 per year. Consequently, the total cost burden associated with Rule 17a-3 would be approximately $44,562,361 per year. --------------------------------------------------------------------------- \1\ Estimates of postage costs are derived from past conversations with industry representatives and have been adjusted to account for inflation and increases in postage costs. --------------------------------------------------------------------------- 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 shall have practical utility; (b) the accuracy of the Commission's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be 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 [[Page 57964]] 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: Pamela Dyson, 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: August 19, 2016. Brent J. Fields, Secretary. [FR Doc. 2016-20256 Filed 8-23-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 164 / Wednesday, August 24, 2016 / Notices 57963
submission, all subsequent VII. Conclusion standardized records, Commission, SRO
amendments, all written statements It Is Therefore Ordered, pursuant to and state examiners could be unable to
with respect to the proposed rule Section 19(b)(2) of the Act,21 that the determine whether broker-dealers are in
change that are filed with the proposed rule change (SR–MSRB–2016– compliance with the Commission’s
Commission, and all written 07), as modified by Amendment No. 1, antifraud and anti-manipulation rules,
communications relating to the be, and hereby is, approved on an financial responsibility program, and
proposed rule change between the accelerated basis. other Commission, SRO, and State laws,
Commission and any person, other than rules, and regulations.
For the Commission, pursuant to delegated As of April 1, 2016 there were 4,104
those that may be withheld from the
authority.22
public in accordance with the broker-dealers registered with the
Robert W. Errett, Commission. The Commission estimates
provisions of 5 U.S.C. 552, will be
available for Web site viewing and Deputy Secretary. that these broker-dealer respondents
printing in the Commission’s Public [FR Doc. 2016–20205 Filed 8–23–16; 8:45 am] incur a total burden of 2,763,566 hours
Reference Room, 100 F Street NE., BILLING CODE 8011–01–P per year to comply with Rule 17a–3.
Washington, DC 20549 on official In addition, Rule 17a–3 contains
business days between the hours of ongoing operation and maintenance
10:00 a.m. and 3:00 p.m. Copies of the SECURITIES AND EXCHANGE costs for broker-dealers, including the
filing also will be available for COMMISSION cost of postage to provide customers
inspection and copying at the principal with account information, and costs for
Proposed Collection; Comment equipment and systems development.
office of the MSRB. All comments
Request The Commission estimates that under
received will be posted without change;
the Commission does not edit personal Upon Written Request, Copies Available Rule 17a–3(a)(17), approximately
identifying information from From: Securities and Exchange 41,143,233 customers will need to be
submissions. You should submit only Commission, Office of FOIA Services, provided with information regarding
information that you wish to make 100 F Street NE., Washington, DC their account on a yearly basis. The
available publicly. All submissions 20549–2736. Commission estimates that the postage
should refer to File Number SR–MSRB– costs associated with providing those
Extension:
2016–07 and should be submitted on or Rule 17a–3, SEC File No. 270–026, OMB customers with copies of their account
before September 14, 2016. Control No. 3235–0033. record information would be
approximately $13,577,267 per year
VI. Accelerated Approval of Proposed Notice is hereby given that pursuant (41,143,233 × $0.33).1 The staff
Rule Change as Modified by to the Paperwork Reduction Act of 1995 estimates that broker-dealers
Amendment No. 1 (‘‘PRA’’) (44 U.S.C. 3501 et seq.) the establishing liquidity, credit, and
Securities and Exchange Commission market risk management controls
The Commission finds good cause for (‘‘Commission’’) is soliciting comments pursuant to Rule 17a–3(a)(23) incur one-
approving the proposed rule change, as on the existing collection of information time startup costs of $924,000, or
amended by Amendment No. 1, prior to provided for in Rule 17a–3 (17 CFR $308,000 amortized over a three-year
the 30th day after the date of 240.17a–3), under the Securities approval period, to hire outside counsel
publication of notice in the Federal Exchange Act of 1934 (15 U.S.C. 78a et to review the controls. The staff further
Register. As discussed above, seq.). The Commission plans to submit estimates that the ongoing equipment
Amendment No. 1 amends the proposed this existing collection of information to and systems development costs relating
rule change by shortening the required the Office of Management and Budget to Rule 17a–3 for the industry would be
time frame for firms to resolve an inter- (‘‘OMB’’) for extension and approval. about $30,677,094 per year.
dealer fail from 20 calendar days to 10 Rule 17a–3 under the Securities
Consequently, the total cost burden
calendar days, and permitting the buyer Exchange Act of 1934 establishes
associated with Rule 17a–3 would be
to grant the seller a one-time 10 minimum standards with respect to
approximately $44,562,361 per year.
calendar day extension. business records that broker-dealers Written comments are invited on: (a)
The MSRB has proposed the revisions registered with the Commission must Whether the proposed collection of
included in Amendment No. 1 to further make and keep current. These records information is necessary for the proper
reduce the risk and cost associated with are maintained by the broker-dealer (in performance of the functions of the
inter-dealer fails. As noted by the accordance with a separate rule), so they Commission, including whether the
MSRB, the only substantive change to can be used by the broker-dealer and information shall have practical utility;
the proposed amendment, the reviewed by Commission examiners, as (b) the accuracy of the Commission’s
shortening of the close-out period, was well as other regulatory authority estimate of the burden of the proposed
made to address concerns raised during examiners, during inspections of the collection of information; (c) ways to
the comment period. The MSRB has broker-dealer. enhance the quality, utility, and clarity
further noted that, in light of the stated The collections of information
of the information to be collected; and
goal of the original proposal to compress included in Rule 17a–3 are necessary to
(d) ways to minimize the burden of the
the timing for initiating and completing provide Commission, self-regulatory
collection of information on
a close-out, the revisions are consistent organization (‘‘SRO’’) and state
respondents, including through the use
with the original proposal and are examiners to conduct effective and
of automated collection techniques or
mstockstill on DSK3G9T082PROD with NOTICES
unlikely to be controversial. efficient examinations to determine
other forms of information technology.
whether broker-dealers are complying
For the foregoing reasons, the Consideration will be given to
with relevant laws, rules, and
Commission finds good cause for comments and suggestions submitted in
regulations. If broker-dealers were not
approving the proposed rule change, as required to create these baseline, 1 Estimates of postage costs are derived from past
modified by Amendment No. 1, on an
conversations with industry representatives and
accelerated basis, pursuant to Section 21 15 U.S.C. 78s(b)(2). have been adjusted to account for inflation and
19(b)(2) of the Act. 22 17 CFR 200.30–3(a)(12). increases in postage costs.
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![57964 Federal Register / Vol. 81, No. 164 / Wednesday, August 24, 2016 / Notices
writing within 60 days of this The text of the proposed rule change Since publication of the Trade
publication. is available on FINRA’s Web site at Reporting Notice, a number of firms
An agency may not conduct or http://www.finra.org, at the principal have inquired about using the ADF as
sponsor, and a person is not required to office of FINRA and at the their secondary facility for trade
respond to, a collection of information Commission’s Public Reference Room. reporting, and at least one has inquired
under the PRA unless it displays a about using the ADF as its primary
II. Self-Regulatory Organization’s
currently valid OMB control number. facility. While the ADF historically has
Statement of the Purpose of, and
Please direct your written comments not been used by members for trade
Statutory Basis for, the Proposed Rule
to: Pamela Dyson, Director/Chief reporting without quoting activity, there
Change
Information Officer, Securities and is nothing in the ADF rules 6 to prohibit
Exchange Commission, c/o Remi Pavlik- In its filing with the Commission, it. Thus, to better accommodate firms in
Simon, 100 F Street NE., Washington, FINRA included statements concerning their efforts to comply with the
DC 20549, or send an email to: the purpose of and basis for the guidance in the Trade Reporting Notice,
PRA_Mailbox@sec.gov. proposed rule change and discussed any and to provide an alternative to
Dated: August 19, 2016. comments it received on the proposed connecting to both TRFs, FINRA will
Brent J. Fields, rule change. The text of these statements make the ADF available to members for
Secretary. may be examined at the places specified trade reporting purposes only.7 FINRA
in Item IV below. The Exchange has currently is making systems updates to
[FR Doc. 2016–20256 Filed 8–23–16; 8:45 am]
prepared summaries, set forth in the ADF and anticipates that the ADF
BILLING CODE 8011–01–P
sections A, B, and C below, of the most will be available to members before the
significant aspects of such statements. end of this year.8 Members that use the
SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s ADF for trade reporting purposes only
COMMISSION Statement of the Purpose of, and would not be able to quote on the ADF
Statutory Basis for, the Proposed Rule without registering under one of the two
[Release No. 34–78609; File No. SR–FINRA– categories of ‘‘ADF Market Participant’’
2016–031] Change
under current ADF rules (i.e., Registered
1. Purpose Reporting ADF ECN and Registered
Self-Regulatory Organizations;
Financial Industry Regulatory Background Reporting ADF Market Maker) and
Authority, Inc.; Notice of Filing and satisfying all applicable requirements
On January 20, 2016, FINRA for quoting.9
Immediate Effectiveness of a Proposed published a Trade Reporting Notice
Rule Change Relating to Use of the with guidance on firms’ over-the- Because the substantive trade
Alternative Display Facility for Trade counter (‘‘OTC’’) equity trade reporting reporting and trade reporting
Reporting Purpose Only obligations in the event of a systems participation requirements under
issue during the trading day that current ADF rules are consistent with
August 18, 2016. the trade reporting and participation
Pursuant to Section 19(b)(1) of the prevents them from reporting OTC
trades in NMS stocks in accordance requirements applicable to the TRFs,10
Securities Exchange Act of 1934 significant rulemaking is not needed to
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 with FINRA rules.4 As set forth in the
Notice, a firm that routinely reports its enable firms to use the ADF for trade
notice is hereby given that on August reporting purposes only. However,
11, 2016, Financial Industry Regulatory OTC trades in NMS stocks to only one
FINRA trade reporting facility (a firm’s FINRA is proposing the following
Authority, Inc. (‘‘FINRA’’) filed with the additional requirements that would
Securities and Exchange Commission ‘‘primary facility’’) must establish and
maintain connectivity and report to a apply specifically to members that use
(‘‘SEC’’ or ‘‘Commission’’) the proposed the ADF for trade reporting purposes
rule change as described in Items I, II, second FINRA trade reporting facility (a
firm’s ‘‘secondary facility’’), if the firm only.
and III below, which Items have been
prepared by FINRA. FINRA has intends to continue to support OTC
6 See Rule 6200 and 7100 Series.
designated the proposed rule change as trading as an executing broker while its
7 While members will have the option of using
constituting a ‘‘non-controversial’’ rule primary facility is experiencing a
the ADF as their primary facility for trade reporting,
change under paragraph (f)(6) of Rule widespread systems issue.5 FINRA FINRA anticipates that members would be more
19b–4 under the Act,3 which renders currently has three facilities that likely to use the ADF as their secondary facility.
the proposal effective upon receipt of support member reporting of OTC trades FINRA has historically operated the ADF as a utility
in NMS stocks, as defined in SEC Rule and has not attempted to actively attract
this filing by the Commission. The participants in the OTC trade reporting space. For
Commission is publishing this notice to 600(b) of Regulation NMS: the ADF and example, FINRA does not offer a market data
solicit comments on the proposed rule two Trade Reporting Facilities (‘‘TRFs’’). revenue share program for the ADF comparable to
change from interested persons. The TRFs are facilities that are operated the TRFs. See Rules 7610A and 7610B.
8 FINRA notes that in addition to the systems
by both FINRA and its exchange
I. Self-Regulatory Organization’s updates that will be completed this year, the ADF
partners (NASDAQ and NYSE). may need additional infrastructure enhancements
Statement of the Terms of Substance of to support significant trade reporting volume.
the Proposed Rule Change 4 See Trade Reporting Notice, January 20, 2016 However, the necessary enhancements, and the
(OTC Equity Trading and Reporting in the Event of time it may take to make those enhancements, will
FINRA is proposing a proposed rule not be known until FINRA has a more concrete
Systems Issues).
mstockstill on DSK3G9T082PROD with NOTICES
change relating to use of the Alternative 5 As discussed in the Notice, if a firm chooses not understanding of the level of firms’ interest in using
Display Facility (‘‘ADF’’) by FINRA to have connectivity to a secondary facility, it the ADF for trade reporting purposes only and their
members for trade reporting purposes should cease executing OTC trades altogether when potential volume.
9 For example, in addition to registration, FINRA
only. its primary trade reporting facility is experiencing
a widespread systems issue. In that instance, the rules include certification and deposit requirements
firm could route orders for execution to an for ADF quoting participants, as well as capacity
1 15 U.S.C. 78s(b)(1). exchange or another FINRA member (i.e., a member fees and penalties. See, e.g., Rules 6271 and 7580.
2 17 CFR 240.19b–4. with connectivity and the ability to report to a 10 See, e.g., Rules 6282 and 7120; 6380A and
3 17 CFR 240.19b–4(f)(6). FINRA trade reporting facility that is operational). 7220A; and 6380B and 7220B.
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Document Created: 2016-08-24 03:02:24
Document Modified: 2016-08-24 03:02:24
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 81 FR 57963 |
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