83 FR 48733 - Amendment to Single Issuer Exemption for Broker-Dealers
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 188 (September 27, 2018)
Federal Register Volume 83, Issue 188 (September 27, 2018)
| Page Range | 48733-48737 | |
| FR Document | 2018-20880 |
[Federal Register Volume 83, Number 188 (Thursday, September 27, 2018)] [Proposed Rules] [Pages 48733-48737] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-20880] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 240 [Release No. 34-84225; File No. S7-21-18] RIN 3235-AM47 Amendment to Single Issuer Exemption for Broker-Dealers AGENCY: Securities and Exchange Commission (``Commission''). ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: The Commission is proposing an amendment to the exemption provisions in the broker-dealer annual reporting rule under the Securities Exchange Act of 1934 (``Exchange Act''). The amendment would provide that a broker-dealer is not required to engage an independent public accountant to certify the broker-dealer's annual reports if, among other things, the securities business of the broker-dealer has been limited to acting as broker (agent) for a single issuer in soliciting subscriptions for securities of that issuer. DATES: Comments should be received on or before October 29, 2018. ADDRESSES: Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's internet comment form (http://www.sec.gov/rules/proposed.shtml); or Send an email to [email protected]. Please include File Number S7-21-18 on the subject line. Paper Comments Send paper comments to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File Number S7-21-18. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's internet website (http://www.sec.gov/rules/proposed.shtml). Comments are also available for website viewing and printing in the Commission's Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. All comments received will be posted without change. Persons submitting comments are cautioned that the Commission does not redact or edit personal identifying [[Page 48734]] information from comment submissions. You should submit only information that you wish to make publicly available. Studies, memoranda, or other substantive items may be added by the Commission or staff to the comment file during this rulemaking. A notification of the inclusion in the comment file of any such materials will be made available on the Commission's website. To ensure direct electronic receipt of such notifications, sign up through the ``Stay Connected'' option at www.sec.gov to receive notifications by email. FOR FURTHER INFORMATION CONTACT: Michael A. Macchiaroli, Associate Director, at (202) 551-5525; Thomas K. McGowan, Associate Director, at (202) 551-5521; Randall W. Roy, Deputy Associate Director, at (202) 551-5522; Timothy C. Fox, Branch Chief, at (202) 551-5687; or Rose Russo Wells, Senior Counsel, at (202) 551-5527, Office of Financial Responsibility, Division of Trading and Markets, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-7010. SUPPLEMENTARY INFORMATION: I. Background Most broker-dealers registered with the Commission must file annual reports with the Commission.\1\ The annual reports must include a financial report and either a compliance report or an exemption report.\2\ In addition, the annual reports generally must include reports prepared by an independent public accountant covering the financial report and, as applicable, the compliance or exemption report.\3\ The independent public accountant must be registered with the Public Company Accounting Oversight Board (``PCAOB'') if required by the Sarbanes-Oxley Act of 2002.\4\ In addition, the accountant's reports must be prepared in accordance with standards of the PCAOB.\5\ --------------------------------------------------------------------------- \1\ 15 U.S.C. 78q(a)(1); 15 U.S.C. 78q(e)(1)(A); 17 CFR 240.17a- 5(d). See also 17 CFR 240.17a-5(d)(1)(iii) and (iv) (setting forth the limited circumstances under which the annual reports need not be filed). \2\ See 17 CFR 240.17a-5(d)(1). The financial report must include a statement of financial condition, a statement of income, a statement of cash flows, a statement of changes in stockholders' or partners' or sole proprietor's equity, a statement of changes in liabilities subordinated to claims of general creditors, and certain supporting schedules. 17 CFR 240.17a-5(d)(2). A broker-dealer that does not claim it was exempt from 17 CFR 240.15c3-3 (``Rule 15c3- 3'') throughout the most recent fiscal year must file the compliance report, and a broker-dealer that does claim it was exempt from Rule 15c3-3 throughout the most recent fiscal year must file the exemption report. 17 CFR 240.17a-5(d)(1)(i)(B)(1) and (2). The compliance report must contain statements about the broker-dealer's internal controls over, and compliance with, certain financial responsibility rules. 17 CFR 240.17a-5(d)(3). The exemption report must contain statements about the broker-dealer's exemption from Rule 15c3-3. 17 CFR 240.17a-5(d)(4). \3\ 17 CFR 240.17a-5(d)(1)(i)(C). \4\ Public Law 107-204, 116 Stat. 745 (2002). See 17 CFR 240.17a-5(f)(1). \5\ 17 CFR 240.17a-5(g). --------------------------------------------------------------------------- However, a broker-dealer is not required to engage an independent public accountant to provide the accountant's reports if, since the date of the registration of the broker-dealer with the Commission or of the previous annual reports filed with the Commission, the securities business of the broker-dealer ``has been limited to acting as broker (agent) for the issuer in soliciting subscriptions for securities of the issuer, the broker has promptly transmitted to the issuer all funds and promptly delivered to the subscriber all securities received in connection with the transaction, and the broker has not otherwise held funds or securities for or owed money or securities to customers[.]'' \6\ --------------------------------------------------------------------------- \6\ 17 CFR 240.17a-5(e)(1)(i)(A) (emphasis added). --------------------------------------------------------------------------- The Commission first adopted the exemption in 1957.\7\ At that time, the pertinent rule text provided that the exemption was available to a broker-dealer if ``his or its securities business has been limited to acting as broker (agent) for the issuer in soliciting subscriptions for securities of such issuer, said broker has promptly transmitted to such issuer all funds . . .'' \8\ The Commission stated in the adopting release that the ``exemption is available to a broker who, from the date of his previous report, has limited his securities business to soliciting subscriptions as an agent for issuers, has transmitted funds and securities promptly and has not otherwise held funds or securities for or owed money or securities to customers (i.e. one who would have been exempt during that entire period from the Commission's aggregate- indebtedness-net-capital Sec. 240.15c3-1 (Rule 15c3-1) by reason of paragraph (b)(1) thereof).'' \9\ --------------------------------------------------------------------------- \7\ See Registration of Brokers and Dealers; Preservation of Records and Reports of Certain Stabilizing Activities, 22 FR 6492 (Aug. 14, 1957). \8\ Id. at 6493. \9\ Id. --------------------------------------------------------------------------- In 1975, as part of a set of comprehensive amendments to broker- dealer reporting rules, the Commission amended the text of the exemption to provide, in pertinent part, that the exemption was available if ``the securities business of such broker or dealer has been limited to acting as broker (agent) for the issuer in soliciting subscriptions for securities of such issuer . . .''.\10\ The Commission did not explain the purpose of the amendment. In 1977, the Commission again amended the text of the exemption to modify the phrase ``has been limited to acting as broker (agent) for the issuer'' to ``has been limited to acting as broker (agent) for an issuer.'' \11\ Although the Commission did not explain the purpose of the amendment in the adopting release, the Commission later clarified that the exemption applies only to a broker-dealer acting as an agent for a single issuer.\12\ --------------------------------------------------------------------------- \10\ See Announcement of the Adoption of the FOCUS Report, a Program to Streamline the Financial and Operational Reporting of Brokers and Dealers, Including Amendments to Rule 17a-4, Rule 17a-5 and Related Form X-17a-5, Rule 17a-10 and Related Form X-17a-10, Rule 17a-11 and Related Form X-17a-11, and Rule 17a-20 and Related Form X-17a-20 Under the Securities Exchange Act Of 1934, and the Approval of Plans Submitted Pursuant to Rule 17a-5, Rule 17a-10 and Rule 17a-20, Exchange Act Release No. 11935, Dec. 17, 1975, 40 FR 59706 (Dec. 30, 1975). See also Proposal to Adopt the FOCUS Report, a Program to Streamline the Financial and Operational Reporting of Brokers and Dealers, Including Amendments to Rule 17a-4, Rule 17a-5 and Related Form X-17a-5, Rule 17a-10 and Related Form X-17a-10, Rule17a-11 and Related Form X-17a-11, and Rule 17a-20 and Related Form X-17a-20 Under the Securities Exchange Act Of 1934, Exchange Act Release No. 11748 (Oct. 16, 1975), 40 FR 51060 (Nov. 3, 1975). \11\ See FOCUS Reporting System, Exchange Act Release No. 13462 (Apr. 22, 1977), 42 FR 23786, 23788 (May 10, 1977) (emphasis added). \12\ See In the Matter of the Application of First Nevada Securities., Inc., Exchange Act Release No. 30774, at n.6 (June 4, 1992). --------------------------------------------------------------------------- While the 1977 amendment was published in the Federal Register, an error was made when printing the amended rules in the Code of Federal Regulations. In particular, the Code of Federal Regulations continued to describe the exemption as limited to a broker that acts as an agent ``for the issuer.'' \13\ --------------------------------------------------------------------------- \13\ See, e.g., In the Matter of the Application of Sharemaster, Exchange Act Release No. 83138 (Apr. 30, 2018) (``Sharemaster''). --------------------------------------------------------------------------- Finally, in 2013, the exemption provision was amended again, but solely to modernize certain terms in the rule text.\14\ However, in making these amendments, the release used the rule text as then published in the Code of Federal Regulations and, therefore, inadvertently re-introduced the language of the exemption as it existed prior to 1977 (i.e., amended the exemption provision to provide that the exemption applied if the broker solicited subscriptions for ``the issuer'' rather than ``an issuer''). Today, the Commission is proposing an amendment to correct that error and to [[Page 48735]] clarify that the exemption applies to a broker-dealer whose securities business has been limited to acting as broker (agent) for a single issuer in soliciting subscriptions for securities of that issuer. --------------------------------------------------------------------------- \14\ See Broker-Dealer Reports, Exchange Act Release No. 70073 (Jul. 30, 2013), 78 FR 51910, 51943 (Aug. 21, 2013). For example, the amendment replaced the phrase ``such broker or dealer'' with ``the broker or dealer.'' --------------------------------------------------------------------------- II. Proposed Amendment to Rule 17a-5 Section 17(e)(1)(A) of the Exchange Act, among other things, requires a registered broker-dealer to file certain audited financial statements annually with the Commission.\15\ Section 17(e)(1)(C) of the Exchange Act provides that the Commission may exempt any registered broker-dealer from any provision of Section 17(e)(1) ``if the Commission determines that the exemption is consistent with the public interest and the protection of investors.'' \16\ The Commission adopted Rule 17a-5 under the Exchange Act (``Rule 17a-5''), in part, under these provisions. --------------------------------------------------------------------------- \15\ See 15 U.S.C. 78q(e)(1)(A). \16\ See 15 U.S.C. 78q(e)(1)(C). --------------------------------------------------------------------------- The Commission is proposing to amend the exemption provision in paragraph (e)(1)(i)(A) of Rule 17a-5 to clarify in the rule text that the exemption is limited to a broker-dealer that acts as an agent for a single issuer. Specifically, the Commission is proposing to replace the phrase ``has been limited to acting as broker (agent) for the issuer in soliciting subscriptions for securities of the issuer'' with the phrase ``has been limited to acting as broker (agent) for a single issuer in soliciting subscriptions for securities of that issuer.'' Broker-dealers serve an important capital formation role by performing numerous services. These services include, among others, underwriting securities issuances, facilitating purchases and sales of securities on behalf of customers, making markets in securities, participating in private placements of securities, and providing investment research and recommendations. The annual reports broker- dealers file with the Commission are used by the Commission and the broker-dealer's designated examining authority to monitor the financial and operational condition of the broker-dealer. The annual reports also are one of the primary means of monitoring compliance with the Commission's broker-dealer financial responsibility rules. The requirement that the annual reports be certified by an independent public accountant is intended to enhance the reliability of the information filed by the broker-dealer, including information relevant to its financial condition and ability to continue as a going concern. This also benefits investors who are customers or potential customers of the broker-dealer and who do not have access to the same level of information about the financial condition and operations of the broker- dealer as the independent public accountant performing the audit. These investors rely on the independent public accountant to audit this information, which--as noted above--is relevant to the broker-dealer's financial condition and ability to continue as a going concern. This very limited exemption to the requirement that a broker- dealer's annual reports be certified by an independent public accountant is consistent with the objectives of the rule. In particular, the exemption applies when the broker-dealer's sole reason for being registered with the Commission as a broker-dealer is to act as an agent to solicit subscriptions for the securities of a single issuer--typically an affiliate of the broker-dealer.\17\ In this case, the issuer is the broker-dealer's only customer. Due to this special relationship, the issuer likely has the ability to access sufficient information about the financial condition and operations of the broker- dealer to make an informed decision about continuing to use the broker- dealer to effect transactions in its securities.\18\ Therefore, requiring that an independent public accountant audit this information would not provide the single customer of the broker-dealer (i.e., the issuer) a meaningful benefit. The risk of harm from not requiring that an independent public accountant audit the information would be mitigated by the single customer's ability to access any necessary information regarding the broker-dealer's operational and financial condition, as noted above. Moreover, any harm would be limited to the broker-dealer's single customer. Further, based on the annual reports broker-dealers filed with the Commission, it appears that only three broker-dealers have relied on the exemption in the past year. --------------------------------------------------------------------------- \17\ See also 17 CFR 240.3a4-1 (which provides a limited safe harbor from the requirement to register as a broker-dealer for certain associated persons of an issuer that participate in the sale of the securities of the issuer under certain enumerated conditions). \18\ See Sharemaster at 10 (``It is the limited nature of the business of a broker that solicits subscriptions for a single issuer and the relationship between the broker and that issuer, such as when the broker is engaged only in underwriting the issues of its parent that renders an audit requirement on the broker-dealer unnecessary.''). --------------------------------------------------------------------------- III. Request for Comment The Commission generally requests comment on all aspects of the proposal. This request for comment is limited to the proposed rule amendment; the Commission is not requesting comment on any other aspect of Rule 17a-5. IV. Paperwork Reduction Act The proposed rule amendment would clarify the scope of an existing exemption available to certain broker-dealers from the requirement to engage an independent public accountant to provide the reports required under paragraph (d)(1)(i)(C) of Rule 17a-5.\19\ The proposed rule amendment does not create any new, or revise any existing, collection of information pursuant to the Paperwork Reduction Act of 1995.\20\ Accordingly, no information has been submitted to the Office of Management and Budget for review. --------------------------------------------------------------------------- \19\ See 17 CFR 240.17a-5(d)(1)(i)(C). \20\ 44 U.S.C. 3501 et seq. --------------------------------------------------------------------------- The Commission requests comment on the assertion that the proposed rule amendment will not create any new, or revise any existing, collection of information pursuant to the Paperwork Reduction Act. V. Economic Analysis The Commission is mindful of the costs imposed by, and the benefits obtained from, its rules. Whenever the Commission engages in rulemaking and is required to consider or determine whether an action is necessary or appropriate in the public interest, Section 3(f) of the Exchange Act requires the Commission to consider whether the action would promote efficiency, competition, and capital formation, in addition to the protection of investors. Further, when engaged in rulemaking under the Exchange Act, Section 23(a)(2) of the Exchange Act requires the Commission to consider the impact such rules would have on competition. Section 23(a)(2) of the Exchange Act also prohibits the Commission from adopting any rule that would impose a burden on competition not necessary or appropriate in furtherance of the purposes of the Exchange Act. The following analysis considers the potential economic effects that may result from the proposed rule amendment, including the benefits and costs to market participants as well as the broader implications of the proposal for efficiency, competition, and capital formation. As noted above, broker-dealers serve an important role in capital formation by performing numerous services, including with respect to the [[Page 48736]] distribution of securities. Broker-dealer annual reports are one of the primary means of monitoring compliance with the Commission's broker- dealer financial responsibility rules, and the requirement that the annual reports be certified by an independent public accountant is intended to help enhance the reliability of the information filed by the broker-dealer. The exemption in paragraph (e)(1)(i)(A) of Rule 17a- 5 is designed to streamline regulatory compliance for certain broker- dealers by permitting broker-dealers that underwrite offerings by a single issuer--typically an affiliate of the broker-dealer--to do so without needing to meet this requirement. With respect to the baseline, broker-dealers rarely rely on the very limited exemption in paragraph (e)(1)(i)(A) of Rule 17a-5. Staff analysis of annual reports filed by broker-dealers revealed that only three broker-dealers--out of approximately 4,000 registered with the Commission--relied on the exemption in the last year. The low level of use suggests that broker-dealers generally do not avail themselves of the existing exemption to compete with one another or to improve the efficiency of their underwriting activities. The Commission recognizes the value of requiring that broker-dealer annual reports be certified by an independent public accountant. However, when a broker-dealer is acting solely as an agent for a single issuer's securities, typically an affiliate, the issuer is likely to have sufficient information about the broker-dealer's financial and operational condition. In that case, there would be minimal benefit in a requirement that the broker-dealer-dealer's annual reports be certified by an independent public accountant. At the same time, a broker-dealer required to obtain certification for its annual reports could bear significant costs to do so.\21\ --------------------------------------------------------------------------- \21\ According to one broker-dealer, the requirement for an audit prepared by a PCAOB-registered accountant was $2,800 in 2010. See Sharemaster, at n. 4. Adjusting this amount for inflation yields approximately $3,200 in 2018 (inflation calculator available at https://www.bls.gov/data/inflation_calculator.htm). --------------------------------------------------------------------------- In cases where a broker-dealer is acting solely as an agent for a single unaffiliated issuer, the benefits of certification are likely to be higher because the larger degree of information asymmetry between the broker-dealer and the unaffiliated issuer makes third-party certification more valuable. The Commission believes the likelihood of such a narrow arrangement between a broker-dealer and a single unaffiliated issuer is low because for such a broker-dealer, the costs of certification are likely lower than the expected benefits from acting as an agent for additional unaffiliated issuers. The Commission expects the amendment to benefit issuers that rely on broker-dealers to underwrite securities offerings by providing increased regulatory certainty about a broker-dealer's obligation to have its annual reports certified by an independent public accountant when the broker-dealer acts as an agent for multiple issuers. This will benefit issuers by helping ensure that broker-dealers do not inappropriately rely on the exemption in paragraph (e)(1)(i)(A) of Rule 17a-5. When the broker-dealer is not acting solely as an agent for a single affiliate's securities, the benefits of certification are likely to be more substantial because the issuers are less likely to have sufficient information about the broker-dealer's financial condition. The Commission acknowledges that, to the extent this proposal limits use of the exemption, broker-dealers that would no longer be able to use the exemption in the future could bear costs as a result of the proposed amendment. For such a broker-dealer, the Commission believes the cost of a small broker-dealer obtaining certification of its annual reports by an independent public accountant in accordance with paragraph (d)(1)(i)(C) of Rule 17a-5 could be approximately $3,200 per year.\22\ Based on the low reliance on the exemption currently, and the expectation that the number of broker-dealers relying on the exemption will not materially increase or decrease as a result of the amendment, the overall economic impact of the proposal is likely to be small. --------------------------------------------------------------------------- \22\ Id. --------------------------------------------------------------------------- The Commission expects the proposed amendment to have only a marginal impact on efficiency, competition, and capital formation. This assessment is primarily based on the belief that the amendment does not revise the scope of the exemption or change current practice and that the exemption is claimed by only a few broker-dealers. The Commission nevertheless acknowledges that the proposed amendment may marginally impair capital formation if it prompts broker-dealers to reduce underwriting activity or to increase the price of underwriting activities for potential issuers. The Commission considered several alternatives in terms of the scope of the exemption. First, the Commission considered broadening the scope of the exemption to include broker-dealers whose securities business is limited to acting as an agent for multiple issuers. Staff analysis of information provided by broker-dealers indicates that a substantial number of registered broker-dealers underwrite corporate securities or are selling group participants for corporate securities and may otherwise be eligible to take advantage of the exemption if its scope were broadened in this way.\23\ --------------------------------------------------------------------------- \23\ Commission staff analysis of Form BD data indicates that 971 registered broker-dealers reported engaging in, or expecting to engage in, the underwriting of securities at the end of 2017. --------------------------------------------------------------------------- Rule 17a-5 provides only two exemptions from the requirement that broker-dealer annual reports be certified by an independent public accountant.\24\ The Commission has provided for only these very limited exemptions from the requirement that annual reports of broker-dealers be audited due to the importance of reliable financial and operational information concerning registered broker-dealers for investor protection and the integrity of the capital markets. Broadening the exemption could benefit broker-dealers by no longer requiring them to engage independent public accountants when they act as an agent for multiple issuers in soliciting subscriptions for securities and thereby reducing their costs. However, an alternative that broadens these exceptions could impose costs on issuers to the extent that making the certification by the independent public accountant voluntary for broker-dealers that serve multiple issuers reduces the reliability of these broker-dealers' annual reports. --------------------------------------------------------------------------- \24\ One exemption is the ``single issuer'' exemption provided for in paragraph (e)(1)(i)(A) of Rule 17a-5. The other exemption is contained in paragraph (e)(1)(i)(B) of Rule 17a-5. The second exemption applies to broker-dealers whose securities business is ``limited to buying and selling evidences of indebtedness secured by mortgage, deed of trust, or other lien upon real estate or leasehold interests, and the broker or dealer has not carried any margin account, credit balance, or security for any securities customer.'' Staff analysis of annual reports filed by broker-dealers revealed that only one broker-dealer claimed this exemption in the last year. --------------------------------------------------------------------------- Given the significance of the verification of a broker-dealer's financial and operational information by an independent public accountant, the Commission is not proposing to broaden the scope of the exemption to include broker-dealers whose securities business is limited to acting as an agent for multiple issuers. When a broker- dealer acts as an agent on behalf of an issuer, the financial condition of the broker-dealer is important to the issuer because if a broker- dealer is financially constrained, it may be less able to bear the risks associated with underwriting [[Page 48737]] activities, such as holding securities in inventory. If a broker-dealer acts as an agent on behalf of multiple issuers, its financial condition is important to capital formation for multiple issuers, and so the benefits of certification are likely higher for the broker-dealer. Moreover, the Commission notes that the benefits to broker-dealers from such an alternative may be limited by competitive effects, because an issuer that is concerned about the reliability of a broker-dealer's financial statements may choose to hire a broker-dealer with certified annual reports to act as its agent. Second, the Commission considered eliminating the exemption. While the Commission is mindful of the significance of broker-dealer audits, as explained above, the Commission believes that the cost of this alternative to broker-dealers who are now eligible to take advantage of the exemption does not justify the benefits that would accrue to the broker-dealer's single customer, typically an affiliate of the broker- dealer, as a result of an audit. Therefore, the Commission preliminarily believes the exemption should continue to be available only where a broker-dealer is acting as an agent for a single issuer in soliciting subscriptions for securities of that issuer. Finally, the Commission considered further specifying that the limited exemption in paragraph (e)(1)(i)(A) of Rule 17a-5 would apply only if the broker-dealer were engaged in underwriting the securities of an affiliate. While this alternative would narrow the limited exemption, based on its observation of broker-dealers' use of this exemption to date, the Commission does not believe the benefits yielded by narrowing the exemption would be substantial. VI. Regulatory Flexibility Act Certification Section 3(a) of the Regulatory Flexibility Act requires the Commission to undertake an initial regulatory flexibility analysis of the impact of the proposed rule on small entities unless the Commission certifies that the amendments, if adopted, would not have a significant economic impact on a substantial number of small entities. As discussed above, the proposed rule would not change the status quo in terms of the broker-dealers that would or would not qualify for the exemption from paragraph (d)(1)(i)(C) of Rule 17a-5.\25\ For additional discussion of the impact of the proposal (including on small entities), please see section V above. The Commission hereby certifies, pursuant to 5 U.S.C. 605(b), that the proposed amendment to Rule 17a-5, if adopted, would not have a significant economic impact on a substantial number of small entities. --------------------------------------------------------------------------- \25\ See 17 CFR 240.17a-5(d)(1)(i)(C). --------------------------------------------------------------------------- The Commission encourages written comments regarding this certification. The Commission solicits comment as to whether the proposed amendments could have an effect that the Commission has not considered and requests that commenters describe the nature of any impact on small entities and provide empirical data to support the extent of the impact. VII. Consideration of Impact on the Economy For purposes of the Small Business Regulatory Enforcement Fairness Act of 1996,\26\ a rule is ``major'' if it has resulted, or is likely to result, in: --------------------------------------------------------------------------- \26\ Public Law 104-121, Title II, 110 Stat. 857 (1996). --------------------------------------------------------------------------- An annual effect on the economy of $100 million or more; a major increase in costs or prices for consumers or individual industries; or significant adverse effects on competition, investment, or innovation. The Commission requests comment on the potential impact of the proposed rule on the economy on an annual basis. The Commission requests that commenters provide empirical data and other factual support for their views. VIII. Statutory Authority The Commission is proposing an amendment to Rule 17a-5 under the Exchange Act (17 CFR 240.17a-5) pursuant to the authority conferred by Exchange Act Sections 17(e)(1)(A), 17(e)(1)(C), and 36.\27\ --------------------------------------------------------------------------- \27\ 15 U.S.C. 78q(e)(1)(A); 15 U.S.C. 78q(e)(1)(C); 15 U.S.C. 78mm. --------------------------------------------------------------------------- List of Subjects in 17 CFR Part 240 Brokers, Reporting and recordkeeping requirements, Securities. Text of Proposed Rules In accordance with the foregoing, the Commission proposes that Title 17, Chapter II of the Code of Federal Regulation be amended as follows. PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934 0 1. The authority citation for Part 240 continues to read in part as follows: Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78n-1, 78o, 78o-4, 78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78ll, 78mm, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, 7201 et seq.; and 8302; 7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C. 1350; and Pub. L. 111-203, 939A, 124 Stat. 1887 (2010); and secs. 503 and 602, Pub. L. 112-106, 126 Stat. 326 (2012), unless otherwise noted. * * * * * 0 2. Amend Sec. 240.17a-5 by revising paragraph (e) to read as follows. Sec. 240.17a-5 Reports to be made by certain brokers and dealers. * * * * * (e) Nature and form of reports. (1)(i) The broker or dealer is not required to engage an independent public accountant to provide the reports required under paragraph (d)(1)(i)(C) of this section if, since the date of the registration of the broker or dealer under section 15 of the Act (15 U.S.C. 78o) or of the previous annual reports filed under paragraph (d) of this section: (A) The securities business of the broker or dealer has been limited to acting as broker (agent) for a single issuer in soliciting subscriptions for securities of that issuer, the broker has promptly transmitted to the issuer all funds and promptly delivered to the subscriber all securities received in connection with the transaction, and the broker has not otherwise held funds or securities for or owed money or securities to customers; or * * * * * By the Commission. Dated: September 20, 2018. Brent J. Fields, Secretary. [FR Doc. 2018-20880 Filed 9-26-18; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 83, No. 188 / Thursday, September 27, 2018 / Proposed Rules 48733
Lafayette, LA; Reserve, LA; INT Reserve V–558 [Amended] SECURITIES AND EXCHANGE
084° and Gulfport, MS, 247° radials; From Llano, TX; INT Llano 088° and Centex, COMMISSION
Gulfport; Semmes, AL; INT Semmes 048°
TX, 306° radials; Centex; Industry, TX; to
and Monroeville, AL, 231° radials; 17 CFR Part 240
Monroeville; Montgomery, AL; Tuskegee, Eagle Lake, TX.
AL; Columbus, GA; INT Columbus 068° Paragraph 6011 United States Area [Release No. 34–84225; File No. S7–21–18]
and Athens, GA, 195° radials; Athens; Navigation Routes.
Electric City, SC; Sugarloaf Mountain, NC; RIN 3235–AM47
Barretts Mountain, NC; South Boston, VA; * * * * *
Richmond, VA; INT Richmond 039° and Amendment to Single Issuer
T–200 College Station, TX (CLL) to Sabine Exemption for Broker-Dealers
Brooke, VA, 132° radials; INT Patuxent,
Pass, TX (SBI) [New]
MD, 228° and Nottingham, MD, 174°
College Station, TX (CLL) VORTAC (lat.
AGENCY: Securities and Exchange
radials; to Nottingham. The airspace on the
main airway above 14,000 feet MSL from 30°36′18.00″ N, long. 96°25′14.45″ W)
Commission (‘‘Commission’’).
McAllen to 49 miles northeast and the SEALY, TX FIX (lat. 29°51′15.54″ N, long. ACTION: Proposed rule.
airspace within Mexico is excluded. The 95°56′36.33″ W)
airspace within R–4007A and R–4007B is SUMMARY: The Commission is proposing
MOLLR, TX WP (lat. 29°39′20.23″ N, long.
excluded. an amendment to the exemption
95°16′35.83″ W)
* * * * * provisions in the broker-dealer annual
Sabine Pass, TX (SBI) VOR/DME (lat.
reporting rule under the Securities
V–68 [Amended] 29°41′12.19″ N, long. 94°02′16.72″ W)
Exchange Act of 1934 (‘‘Exchange Act’’).
From Montrose, CO; Cones, CO; Dove Creek, * * * * * The amendment would provide that a
CO; Cortez, CO; Rattlesnake, NM; INT broker-dealer is not required to engage
T–220 Industry, TX (IDU) to Sabine Pass,
Rattlesnake 128° and Albuquerque, NM, an independent public accountant to
345° radials; Albuquerque; INT TX (SBI) [New]
Albuquerque 120° and Corona, NM, 311°
certify the broker-dealer’s annual
Industry, TX (IDU) VORTAC (lat.
radials; Corona; 41 miles 85 MSL, Chisum, 29°57′21.81″ N, long. 96°33′43.90″ W)
reports if, among other things, the
NM; Hobbs, NM; Midland, TX; San Angelo, SEALY, TX FIX (lat. 29°51′15.54″ N, long.
securities business of the broker-dealer
TX; Junction, TX; Center Point, TX; San 95°56′36.33″ W) has been limited to acting as broker
Antonio, TX; INT San Antonio 064° and MOLLR, TX WP (lat. 29°39′20.23″ N, long. (agent) for a single issuer in soliciting
Industry, TX, 267° radials; to Industry. subscriptions for securities of that
95°16′35.83″ W)
* * * * * Sabine Pass, TX (SBI) VOR/DME (lat. issuer.
V–76 [Amended] 29°41′12.19″ N, long. 94°02′16.72″ W) DATES: Comments should be received on
From Lubbock, TX; INT Lubbock 188° and * * * * * or before October 29, 2018.
Big Spring, TX, 286° radials; Big Spring; ADDRESSES: Comments may be
T–224 Palacios, TX (PSX) to Lake Charles,
San Angelo, TX; Llano, TX; Centex, TX; to submitted by any of the following
Industry, TX. LA (LCH) [New]
methods:
* * * * * Palacios, TX (PSX) VORTAC (lat.
28°45′51.93″ N, long. 96°18′22.25″ W) Electronic Comments
V–194 [Amended] MOLLR, TX WP (lat. 29°39′20.23″ N, long. • Use the Commission’s internet
From Cedar Creek, TX; to College Station, 95°16′35.83″ W) comment form (http://www.sec.gov/
TX. From Sabine Pass, TX; Lafayette, LA; Beaumont, TX (BPT) VOR/DME (lat. rules/proposed.shtml); or
Fighting Tiger, LA; McComb, MS; INT 29°56′45.80″ N, long. 94°00′58.36″ W) • Send an email to rule-comments@
McComb 055° and Meridian, MS, 221°
Lake Charles, LA (LCH) VORTAC (lat. sec.gov. Please include File Number S7–
radials; to Meridian. From Liberty, NC;
Raleigh-Durham, NC; Tar River, NC; 30°08′29.45″ N, long. 93°06′20.05″ W) 21–18 on the subject line.
Cofield, NC; to INT Cofield 077° and * * * * * Paper Comments
Norfolk, VA, 209° radials.
* * * * *
T–256 San Antonio, TX (SAT) to Sabine • Send paper comments to Brent J.
Pass, TX (SBI) [New] Fields, Secretary, Securities and
V–198 [Amended] San Antonio, TX (SAT) VORTAC (lat. Exchange Commission, 100 F Street NE,
From San Simon, AZ, via Columbus, NM; El 29°38′38.51″ N, long. 98°27′40.73″ W) Washington, DC 20549–1090.
Paso, TX; 6 miles wide; INT El Paso 109° Eagle Lake, TX (ELA) VOR/DME (lat. All submissions should refer to File
and Hudspeth, TX, 287° radials; 6 miles 29°39′44.93″ N, long. 96°19′01.65″ W) Number S7–21–18. This file number
wide; Hudspeth; 29 miles, 38 miles, 82 MOLLR, TX WP (lat. 29°39′20.23″ N, long.
MSL, INT Hudspeth 109° and Fort should be included on the subject line
95°16′35.83″ W) if email is used. To help the
Stockton, TX, 284° radials; 18 miles, 82
Sabine Pass, TX (SBI) VOR/DME (lat. Commission process and review your
MSL; Fort Stockton; 20 miles, 116 miles,
55 MSL; Junction, TX; San Antonio, TX; 29°41′12.19″ N, long. 94°02′16.72″ W) comments more efficiently, please use
Eagle Lake, TX; Hobby, TX; Sabine Pass, Issued in Washington, DC, on September only one method. The Commission will
TX; White Lake, LA; Tibby, LA; Harvey, 19, 2018. post all comments on the Commission’s
LA; 69 miles, 33 miles, 25 MSL; Brookley, internet website (http://www.sec.gov/
AL; INT Brookley 056° and Crestview, FL, Scott M. Rosenbloom,
Acting Manager, Airspace Policy Group.
rules/proposed.shtml). Comments are
266° radials; Crestview; Marianna, FL;
Seminole, FL; Greenville, FL; Taylor, FL; also available for website viewing and
[FR Doc. 2018–20988 Filed 9–26–18; 8:45 am]
INT Taylor 093° and Craig, FL, 287° printing in the Commission’s Public
daltland on DSKBBV9HB2PROD with PROPOSALS
BILLING CODE 4910–13–P Reference Room, 100 F Street NE,
radials; to Craig.
* * * * * Washington, DC 20549, on official
business days between the hours of
V–548 [Amended] 10:00 a.m. and 3:00 p.m. All comments
From College Station, TX; INT College received will be posted without change.
Station 307° and Waco, TX, 173° radials; to Persons submitting comments are
Waco. cautioned that the Commission does not
* * * * * redact or edit personal identifying
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![48734 Federal Register / Vol. 83, No. 188 / Thursday, September 27, 2018 / Proposed Rules
information from comment submissions. if required by the Sarbanes-Oxley Act of issuer . . .’’.10 The Commission did not
You should submit only information 2002.4 In addition, the accountant’s explain the purpose of the amendment.
that you wish to make publicly reports must be prepared in accordance In 1977, the Commission again amended
available. with standards of the PCAOB.5 the text of the exemption to modify the
Studies, memoranda, or other However, a broker-dealer is not phrase ‘‘has been limited to acting as
substantive items may be added by the required to engage an independent broker (agent) for the issuer’’ to ‘‘has
Commission or staff to the comment file public accountant to provide the been limited to acting as broker (agent)
during this rulemaking. A notification of accountant’s reports if, since the date of for an issuer.’’ 11 Although the
the inclusion in the comment file of any Commission did not explain the
the registration of the broker-dealer with
such materials will be made available purpose of the amendment in the
the Commission or of the previous
on the Commission’s website. To ensure adopting release, the Commission later
annual reports filed with the
direct electronic receipt of such clarified that the exemption applies
Commission, the securities business of
notifications, sign up through the ‘‘Stay only to a broker-dealer acting as an
the broker-dealer ‘‘has been limited to agent for a single issuer.12
Connected’’ option at www.sec.gov to acting as broker (agent) for the issuer in
receive notifications by email. While the 1977 amendment was
soliciting subscriptions for securities of published in the Federal Register, an
FOR FURTHER INFORMATION CONTACT: the issuer, the broker has promptly
Michael A. Macchiaroli, Associate error was made when printing the
transmitted to the issuer all funds and amended rules in the Code of Federal
Director, at (202) 551–5525; Thomas K. promptly delivered to the subscriber all
McGowan, Associate Director, at (202) Regulations. In particular, the Code of
securities received in connection with Federal Regulations continued to
551–5521; Randall W. Roy, Deputy the transaction, and the broker has not describe the exemption as limited to a
Associate Director, at (202) 551–5522; otherwise held funds or securities for or broker that acts as an agent ‘‘for the
Timothy C. Fox, Branch Chief, at (202) owed money or securities to issuer.’’ 13
551–5687; or Rose Russo Wells, Senior customers[.]’’ 6 Finally, in 2013, the exemption
Counsel, at (202) 551–5527, Office of
The Commission first adopted the provision was amended again, but
Financial Responsibility, Division of
exemption in 1957.7 At that time, the solely to modernize certain terms in the
Trading and Markets, Securities and
pertinent rule text provided that the rule text.14 However, in making these
Exchange Commission, 100 F Street NE,
exemption was available to a broker- amendments, the release used the rule
Washington, DC 20549–7010.
dealer if ‘‘his or its securities business text as then published in the Code of
SUPPLEMENTARY INFORMATION: Federal Regulations and, therefore,
has been limited to acting as broker
I. Background (agent) for the issuer in soliciting inadvertently re-introduced the
subscriptions for securities of such language of the exemption as it existed
Most broker-dealers registered with prior to 1977 (i.e., amended the
the Commission must file annual issuer, said broker has promptly
transmitted to such issuer all funds exemption provision to provide that the
reports with the Commission.1 The exemption applied if the broker
annual reports must include a financial . . .’’ 8 The Commission stated in the
adopting release that the ‘‘exemption is solicited subscriptions for ‘‘the issuer’’
report and either a compliance report or rather than ‘‘an issuer’’). Today, the
an exemption report.2 In addition, the available to a broker who, from the date
of his previous report, has limited his Commission is proposing an
annual reports generally must include amendment to correct that error and to
reports prepared by an independent securities business to soliciting
public accountant covering the financial subscriptions as an agent for issuers, has
10 See Announcement of the Adoption of the
report and, as applicable, the transmitted funds and securities
FOCUS Report, a Program to Streamline the
compliance or exemption report.3 The promptly and has not otherwise held Financial and Operational Reporting of Brokers and
independent public accountant must be funds or securities for or owed money Dealers, Including Amendments to Rule 17a–4, Rule
registered with the Public Company or securities to customers (i.e. one who 17a–5 and Related Form X–17a–5, Rule 17a–10 and
would have been exempt during that Related Form X–17a–10, Rule 17a–11 and Related
Accounting Oversight Board (‘‘PCAOB’’) Form X–17a–11, and Rule 17a–20 and Related Form
entire period from the Commission’s X–17a–20 Under the Securities Exchange Act Of
1 15 U.S.C. 78q(a)(1); 15 U.S.C. 78q(e)(1)(A); 17 aggregate-indebtedness-net-capital 1934, and the Approval of Plans Submitted
CFR 240.17a–5(d). See also 17 CFR 240.17a– § 240.15c3–1 (Rule 15c3–1) by reason of Pursuant to Rule 17a–5, Rule 17a–10 and Rule 17a–
5(d)(1)(iii) and (iv) (setting forth the limited paragraph (b)(1) thereof).’’ 9 20, Exchange Act Release No. 11935, Dec. 17, 1975,
circumstances under which the annual reports need 40 FR 59706 (Dec. 30, 1975). See also Proposal to
not be filed). In 1975, as part of a set of Adopt the FOCUS Report, a Program to Streamline
2 See 17 CFR 240.17a–5(d)(1). The financial report comprehensive amendments to broker- the Financial and Operational Reporting of Brokers
and Dealers, Including Amendments to Rule 17a–
must include a statement of financial condition, a dealer reporting rules, the Commission 4, Rule 17a–5 and Related Form X–17a–5, Rule 17a–
statement of income, a statement of cash flows, a amended the text of the exemption to
statement of changes in stockholders’ or partners’ 10 and Related Form X–17a–10, Rule17a–11 and
or sole proprietor’s equity, a statement of changes provide, in pertinent part, that the Related Form X–17a–11, and Rule 17a–20 and
in liabilities subordinated to claims of general exemption was available if ‘‘the Related Form X–17a–20 Under the Securities
Exchange Act Of 1934, Exchange Act Release No.
creditors, and certain supporting schedules. 17 CFR securities business of such broker or 11748 (Oct. 16, 1975), 40 FR 51060 (Nov. 3, 1975).
240.17a–5(d)(2). A broker-dealer that does not claim dealer has been limited to acting as 11 See FOCUS Reporting System, Exchange Act
it was exempt from 17 CFR 240.15c3–3 (‘‘Rule
15c3–3’’) throughout the most recent fiscal year broker (agent) for the issuer in soliciting Release No. 13462 (Apr. 22, 1977), 42 FR 23786,
must file the compliance report, and a broker-dealer subscriptions for securities of such 23788 (May 10, 1977) (emphasis added).
12 See In the Matter of the Application of First
that does claim it was exempt from Rule 15c3–3
daltland on DSKBBV9HB2PROD with PROPOSALS
throughout the most recent fiscal year must file the 4 Public Law 107–204, 116 Stat. 745 (2002). See
Nevada Securities., Inc., Exchange Act Release No.
exemption report. 17 CFR 240.17a–5(d)(1)(i)(B)(1) 30774, at n.6 (June 4, 1992).
17 CFR 240.17a–5(f)(1). 13 See, e.g., In the Matter of the Application of
and (2). The compliance report must contain 5 17 CFR 240.17a–5(g).
statements about the broker-dealer’s internal Sharemaster, Exchange Act Release No. 83138 (Apr.
6 17 CFR 240.17a–5(e)(1)(i)(A) (emphasis added).
controls over, and compliance with, certain 30, 2018) (‘‘Sharemaster’’).
7 See Registration of Brokers and Dealers;
financial responsibility rules. 17 CFR 240.17a– 14 See Broker-Dealer Reports, Exchange Act
5(d)(3). The exemption report must contain Preservation of Records and Reports of Certain Release No. 70073 (Jul. 30, 2013), 78 FR 51910,
statements about the broker-dealer’s exemption Stabilizing Activities, 22 FR 6492 (Aug. 14, 1957). 51943 (Aug. 21, 2013). For example, the
from Rule 15c3–3. 17 CFR 240.17a–5(d)(4). 8 Id. at 6493.
amendment replaced the phrase ‘‘such broker or
3 17 CFR 240.17a–5(d)(1)(i)(C). 9 Id. dealer’’ with ‘‘the broker or dealer.’’
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![Federal Register / Vol. 83, No. 188 / Thursday, September 27, 2018 / Proposed Rules 48737
activities, such as holding securities in small entities), please see section V 78g, 78i, 78j, 78j–1, 78k, 78k–1, 78l, 78m,
inventory. If a broker-dealer acts as an above. The Commission hereby certifies, 78n, 78n–1, 78o, 78o–4, 78o–10, 78p, 78q,
agent on behalf of multiple issuers, its pursuant to 5 U.S.C. 605(b), that the 78q–1, 78s, 78u–5, 78w, 78x, 78ll, 78mm,
financial condition is important to 80a–20, 80a–23, 80a–29, 80a–37, 80b–3, 80b–
proposed amendment to Rule 17a–5, if
4, 80b–11, 7201 et seq.; and 8302; 7 U.S.C.
capital formation for multiple issuers, adopted, would not have a significant 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C.
and so the benefits of certification are economic impact on a substantial 1350; and Pub. L. 111–203, 939A, 124 Stat.
likely higher for the broker-dealer. number of small entities. 1887 (2010); and secs. 503 and 602, Pub. L.
Moreover, the Commission notes that The Commission encourages written 112–106, 126 Stat. 326 (2012), unless
the benefits to broker-dealers from such comments regarding this certification. otherwise noted.
an alternative may be limited by The Commission solicits comment as to * * * * *
competitive effects, because an issuer whether the proposed amendments ■ 2. Amend § 240.17a–5 by revising
that is concerned about the reliability of could have an effect that the paragraph (e) to read as follows.
a broker-dealer’s financial statements Commission has not considered and
may choose to hire a broker-dealer with requests that commenters describe the § 240.17a–5 Reports to be made by certain
certified annual reports to act as its nature of any impact on small entities brokers and dealers.
agent. and provide empirical data to support * * * * *
Second, the Commission considered the extent of the impact. (e) Nature and form of reports.
eliminating the exemption. While the (1)(i) The broker or dealer is not
Commission is mindful of the VII. Consideration of Impact on the required to engage an independent
significance of broker-dealer audits, as Economy public accountant to provide the reports
explained above, the Commission For purposes of the Small Business required under paragraph (d)(1)(i)(C) of
believes that the cost of this alternative Regulatory Enforcement Fairness Act of this section if, since the date of the
to broker-dealers who are now eligible 1996,26 a rule is ‘‘major’’ if it has registration of the broker or dealer under
to take advantage of the exemption does resulted, or is likely to result, in: section 15 of the Act (15 U.S.C. 78o) or
not justify the benefits that would • An annual effect on the economy of of the previous annual reports filed
accrue to the broker-dealer’s single $100 million or more; under paragraph (d) of this section:
customer, typically an affiliate of the • a major increase in costs or prices (A) The securities business of the
broker-dealer, as a result of an audit. for consumers or individual industries; broker or dealer has been limited to
Therefore, the Commission or acting as broker (agent) for a single
preliminarily believes the exemption • significant adverse effects on issuer in soliciting subscriptions for
should continue to be available only competition, investment, or innovation. securities of that issuer, the broker has
where a broker-dealer is acting as an The Commission requests comment promptly transmitted to the issuer all
agent for a single issuer in soliciting on the potential impact of the proposed funds and promptly delivered to the
subscriptions for securities of that rule on the economy on an annual basis. subscriber all securities received in
issuer. The Commission requests that connection with the transaction, and the
Finally, the Commission considered commenters provide empirical data and broker has not otherwise held funds or
further specifying that the limited other factual support for their views. securities for or owed money or
exemption in paragraph (e)(1)(i)(A) of securities to customers; or
Rule 17a–5 would apply only if the VIII. Statutory Authority
* * * * *
broker-dealer were engaged in The Commission is proposing an
underwriting the securities of an amendment to Rule 17a–5 under the By the Commission.
affiliate. While this alternative would Exchange Act (17 CFR 240.17a–5) Dated: September 20, 2018.
narrow the limited exemption, based on pursuant to the authority conferred by Brent J. Fields,
its observation of broker-dealers’ use of Exchange Act Sections 17(e)(1)(A), Secretary.
this exemption to date, the Commission 17(e)(1)(C), and 36.27 [FR Doc. 2018–20880 Filed 9–26–18; 8:45 am]
does not believe the benefits yielded by
List of Subjects in 17 CFR Part 240 BILLING CODE 8011–01–P
narrowing the exemption would be
substantial. Brokers, Reporting and recordkeeping
requirements, Securities.
VI. Regulatory Flexibility Act DEPARTMENT OF LABOR
Certification Text of Proposed Rules
Wage and Hour Division
Section 3(a) of the Regulatory In accordance with the foregoing, the
Flexibility Act requires the Commission Commission proposes that Title 17,
29 CFR Part 570
to undertake an initial regulatory Chapter II of the Code of Federal
flexibility analysis of the impact of the Regulation be amended as follows. RIN 1235–AA22
proposed rule on small entities unless
the Commission certifies that the PART 240—GENERAL RULES AND Expanding Employment, Training, and
amendments, if adopted, would not REGULATIONS, SECURITIES Apprenticeship Opportunities for 16-
have a significant economic impact on EXCHANGE ACT OF 1934 and 17-Year-Olds in Health Care
a substantial number of small entities. Occupations Under the Fair Labor
■ 1. The authority citation for Part 240 Standards Act
As discussed above, the proposed rule continues to read in part as follows:
daltland on DSKBBV9HB2PROD with PROPOSALS
would not change the status quo in AGENCY: Wage and Hour Division,
terms of the broker-dealers that would Authority: 15 U.S.C. 77c, 77d, 77g, 77j,
Department of Labor.
or would not qualify for the exemption 77s, 77z–2, 77z–3, 77eee, 77ggg, 77nnn,
77sss, 77ttt, 78c, 78c–3, 78c–5, 78d, 78e, 78f, ACTION: Notice of proposed rulemaking;
from paragraph (d)(1)(i)(C) of Rule 17a– request for comments.
5.25 For additional discussion of the 26 Public Law 104–121, Title II, 110 Stat. 857
impact of the proposal (including on (1996). SUMMARY: The Department of Labor
27 15 U.S.C. 78q(e)(1)(A); 15 U.S.C. 78q(e)(1)(C); (Department) is proposing this rule to
25 See 17 CFR 240.17a–5(d)(1)(i)(C). 15 U.S.C. 78mm. enhance employment, training, and
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Document Created: 2018-09-27 01:04:39
Document Modified: 2018-09-27 01:04:39
| 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 | Proposed Rules | |
| Action | Proposed rule. | |
| Dates | Comments should be received on or before October 29, 2018. | |
| Contact | Michael A. Macchiaroli, Associate Director, at (202) 551-5525; Thomas K. McGowan, Associate Director, at (202) 551-5521; Randall W. Roy, Deputy Associate Director, at (202) 551-5522; Timothy C. Fox, Branch Chief, at (202) 551-5687; or Rose Russo Wells, Senior Counsel, at (202) 551-5527, Office of Financial Responsibility, Division of Trading and Markets, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-7010. | |
| FR Citation | 83 FR 48733 | |
| RIN Number | 3235-AM47 | |
| CFR Associated | Brokers; Reporting and Recordkeeping Requirements and Securities |
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