I. Introduction

On December 16, 2024, the Securities and Exchange Commission (“Commission”) adopted rule ( printed page 58491) amendments that require, among other things, that certain Commission forms or submissions be filed or submitted electronically.^[1] The rule amendments also require some of these forms and submissions to be filed or submitted in structured data format. More specifically, the rule amendments require the following forms or submissions to be filed or submitted with the Commission in Inline eXtensible Business Reporting Language (“Inline XBRL”):^[2]

• Schedule A, and Exhibits C, F, H, J, K, L, M, O, R, and S to Form CA-1, the application for registration (or amendment thereto) or for exemption from registration filed by clearing agencies; ^[3]
• Exhibits D, E (in part), and I to Form 1, the application for registration (or amendment thereto) or for exemption from registration filed by national securities exchanges; ^[4]
• Form X-17A-5 Part III, annual reports filed by broker-dealers (including over-the-counter derivatives dealers), as well as security-based swap dealers and major security-based swap participants (collectively, “SBS Entities”) for which there is no prudential regulator; ^[5]
• Item 4 of Form 17-H, the risk assessment report filed by certain larger broker-dealers; ^[6] and
• The annual compliance report of an SBS Entity, which must be prepared and signed by the SBS Entity's chief compliance officer (“CCO”) pursuant to Securities Exchange Act of 1934 (“Exchange Act”) Rule 15fk-1(c) (“CCO report”); ^[7]

For the reasons discussed below, the Commission is granting exemptive relief to registrants,^[8] pursuant to its authority under section 36(a)(1) of the Exchange Act,^[9] from filing or submitting the following forms or submissions in Inline XBRL: Form CA-1 (except Exhibit H thereto),^[10] Form 1 (except Exhibit I thereto),^[11] Form X-17A-5 Part III, Form 17-H, and the CCO report.

II. Discussion

Section 36(a)(1) of the Exchange Act grants the Commission the authority to “conditionally or unconditionally exempt any person, security, or transaction . . . from any provision or provisions of [the Exchange Act] or of any rule or regulation thereunder, to the extent that such exemption is necessary or appropriate in the public interest, and is consistent with the protection of investors.” ^[12] As discussed below, the Commission finds that the exemptive relief granted herein is necessary or appropriate in the public interest and consistent with the protection of investors.

As described in the Adopting Release, Inline XBRL was designed to help machines read financial statements by linking specific metadata to data points.^[13] While useful to many parties, Inline XBRL primarily helps financial institutions and regulators analyze data; it is less useful for the specified forms—Form CA-1, Form 1, Form X-17A-5 Part III, Form 17-H, and the CCO report. Form CA-1 is used to assess applications for registration, or exemption from registration as a clearing agency, and to assess amendments to clearing agency registration.^[14] Form 1 is used to assess applications for, and amendments to applications for, registration as a national securities exchange or exemption from registration as a national securities exchange.^[15] Form X-17A-5 Part III is used to assess the financial and operational condition of broker-dealers.^[16] Form 17-H is used as a risk assessment report for certain larger broker-dealers.^[17] The CCO report is a report signed by the chief compliance officer of an SBS Entity and submitted by such firm that, among other required content, assesses the effectiveness of the registrant's internal policies and procedures as set forth more fully in Rule 15Fk-1(c).^[18] What these forms share in common is that they are specific to market intermediaries and are primarily used by the Commission to assess whether an entity registered as a market intermediary meets the relevant standards—including legal, financial, and operational standards—necessary to comply with the Exchange Act.

Many of these filings have individually tailored information, so standardized tags can be relatively less useful and, in the case of Form X-17A-5 Part III, duplicate existing processes. Moreover, since the rule amendments were adopted, the Commission has received information from industry participants stating that the cost of complying with the Inline XBRL requirement is higher than the Commission previously estimated.^[19] ( printed page 58492) Thus, continuing to impose Inline XBRL requirements in these cases would result in potentially significant unnecessary costs, which firms may ultimately pass on to investors through higher fees, without meaningful gains in transparency or data accessibility to investors.

Furthermore, reducing compliance costs for firms with respect to Form X-17A-5 Part III, Form 17-H, and the CCO report, by exempting them from the requirements to file in Inline XBRL, would not impact investors, given that these forms are not primarily used by investors, and several of them are generally non-public.^[20] Instead, a reduction in compliance costs would enable affected firms to allocate resources more efficiently, including to support or enhance their operations and existing compliance obligations, thereby providing a benefit to investors and the market. Accordingly, providing this exemption is necessary or appropriate in the public interest and consistent with the protection of investors.

III. Conclusion

For the reasons discussed herein, the Commission determines that the exemptive relief granted herein satisfies the standard of section 36(a)(1) of the Exchange Act.^[21]

Accordingly, it is hereby ordered, pursuant to section 36(a)(1) of the Exchange Act,^[22] that the Commission is granting exemptive relief to registrants ^[23] from filing or submitting Form CA-1 (except Exhibit H thereto), Form 1 (except Exhibit I thereto), Form X-17A-5 Part III, Form 17-H, and the CCO report in Inline XBRL pursuant to Exchange Act rules 6a-1, 17a-5, 17a-12, 18a-7, 17h-2T, and 15fk-1.^[24]