
[Federal Register Volume 76, Number 92 (Thursday, May 12, 2011)]
[Notices]
[Pages 27671-27672]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-11626]


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SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: U.S. Securities and 
Exchange

[[Page 27672]]

Commission, Office of Investor Education and Advocacy, Washington, DC 
20549-0213.

Extension:
    Rule 17a-13; SEC File No. 270-27; OMB Control No. 3235-0035.

    Notice is hereby given that, pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange 
Commission (``Commission'') has submitted to the Office of Management 
and Budget a request for approval of the extension of the previously 
approved collection of information on the following rule: Rule 17a-13 
(17 CFR 240.17a-13) under the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.).
    Rule 17a-13(b) (17 CFR 17a-13(b)) generally requires that, at least 
once each calendar quarter, all registered brokers and dealers 
physically examine and count all securities held, and that they account 
for all other securities not in their possession, but subject to the 
broker-dealer's control or direction. Any discrepancies between the 
broker-dealer's securities count and the firm's records must be noted 
and, within seven days, the unaccounted for difference must be recorded 
in the firm's records. Rule 17a-13(c) (17 CFR 240.17a-13(c)) provides 
that under specified conditions, the securities counts, examination, 
and verification of the broker-dealer's entire list of securities may 
be conducted on a cyclical basis rather than on a certain date. 
Although Rule 17a-13 does not require filing a report with the 
Commission, discrepancies between a broker-dealer's records and the 
securities counts may be required to be reported, for example, as a 
loss on Form X-17a-5 (17 CFR 248.617), which must be filed with the 
Commission under Rule 17a-5 (17 CFR 17a-5). Rule 17a-13 exempts broker-
dealers that limit their business to the sale and redemption of 
securities of registered investment companies and interests or 
participation in an insurance company separate account and those who 
solicit accounts for federally insured savings and loan associations, 
provided that such persons promptly transmit all funds and securities 
and hold no customer funds and securities. The Rule also does not apply 
to certain broker-dealers required to register only because they effect 
transactions in securities futures products.
    The information obtained from Rule 17a-13 is used as an inventory 
control device to monitor a broker-dealer's ability to account for all 
securities held, in transfer, in transit, pledged, loaned, borrowed, 
deposited, or otherwise subject to the firm's control or direction. 
Discrepancies between the securities counts and the broker-dealer's 
records alert the Commission and the Self Regulatory Organizations 
(``SROs'') to those firms having problems in their back offices.
    Currently, there are approximately 5,030 broker-dealers registered 
with the Commission. However, given the variability in their 
businesses, it is difficult to quantify how many hours per year each 
broker-dealer spends complying with the Rule. As noted, the Rule 
requires a broker-dealer to account for all securities in its 
possession. Many broker-dealers hold few, if any, securities; while 
others hold large quantities. Therefore, the time burden of complying 
with the Rule will depend on respondent-specific factors, including 
size, number of customers, and proprietary trading activity. The staff 
estimates that the average time spent per respondent is 100 hours per 
year on an ongoing basis to maintain the records required under the 
Rule. This estimate takes into account the fact that more than half the 
5,030 respondents--according to financial reports filed with the 
Commission--may spend little or no time in complying with the Rule, 
given that they do not do a public securities business or do not hold 
inventories of securities. For these reasons, the staff estimates that 
the total compliance burden per year is 503,000 hours (5,030 
respondents x 100 hours/respondent).
    The records required to be made by Rule 17a-13 are available only 
to Commission examination staff, state securities authorities, and the 
SROs. Subject to the provisions of the Freedom of Information Act, 5 
U.S.C. 522, and the Commission's rules thereunder (17 CFR 
200.80(b)(4)(iii)), the Commission does not generally publish or make 
available information contained in any reports, summaries, analyses, 
letters, or memoranda arising out of, in anticipation of, or in 
connection with an examination or inspection of the books and records 
of any person or any other investigation.
    The Commission may not conduct or sponsor a collection of 
information unless it displays a currently valid control number. No 
person shall be subject to any penalty for failing to comply with a 
collection of information subject to the PRA that does not display a 
valid Office of Management and Budget (OMB) control number.
    Background documentation for this information collection may be 
viewed at the following link, http://www.reginfo.gov. Comments should 
be directed to (i) Desk Officer for the Securities and Exchange 
Commission, Office of Information and Regulatory Affairs, Office of 
Management and Budget, Room 10102, New Executive Office Building, 
Washington, DC 20503 or by sending an e-mail to: Shagufta_Ahmed@omb.eop.gov; and (ii) Thomas Bayer, Chief Information Officer, 
Securities and Exchange Commission, c/o Remi Pavlik-Simon, 6432 General 
Green Way, Alexandria, VA 22312 or send an e-mail to: PRA_Mailbox@sec.gov. Comments must be submitted within 30 days of this 
notice.

    Dated: May 8, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-11626 Filed 5-11-11; 8:45 am]
BILLING CODE 8011-01-P


