[Federal Register Volume 84, Number 156 (Tuesday, August 13, 2019)]
[Notices]
[Pages 40112-40113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17236]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-026, OMB Control No. 3235-0033]


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

    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 December 31, 2018 there were 3,764 broker-dealers registered 
with the Commission. The Commission estimates that these broker-dealer 
respondents incur a total burden of 2,893,773 hours per year to comply 
with Rule 17a-3.\1\
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    \1\ On June 5, 2019, the Commission adopted Rule 151-1 under the 
Securities Exchange Act of 1934 establishing a standard of conduct 
for broker-dealers and natural persons who are associated persons of 
a broker-dealer when making a recommendation of any securities. See 
Securities Exchange Act Release No. 86031 (Jun. 5, 2019), 84 FR 
33318 (Jul. 12, 2019). At the same time, the Commission adopted 
Exchange Act Rule 17a-14 (CFR 240.17a-14) and Form CRS (17 CFR 
249.640) under the Exchange Act. See Form CRS Relationship Summary; 
Amendments to Form ADV Exchange Act Release No. 86032, Advisers Act 
Release No. 5247, File No. S7-08-18 (June 5, 2019), 84 FR 33492 
(July 12, 2019). As part of new Rule 17a-14 and Form CRS, and 
Regulation Best Interest, the Commission amended Rule 17a-3 by 
adding new paragraphs (a)(24) and (a)(35). The collections of 
information and the related burdens associated with these amendments 
have been separately noticed for comment and are currently under 
review.
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    In addition, Rule 17a-3 contains ongoing operation and maintenance 
costs for broker-dealers, including the cost of postage to provide 
customers

[[Page 40113]]

with account information, and costs for equipment and systems 
development. The Commission estimates that under Rule 17a-3(a)(17), 
approximately 45,633,482 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 $16,321,719 per year (45,633,482 x $0.35).\2\ 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 $912,000, or $304,000 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 $37,446,686 per year. Consequently, the total cost burden 
associated with Rule 17a-3 would be approximately $54,072,405 per year.
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    \2\ 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.
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    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 
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: Charles Riddle, Acting 
Director/Chief Information Officer, Securities and Exchange Commission, 
c/o Candace Kenner, 100 F Street NE, Washington, DC 20549, or send an 
email to: PRA_Mailbox@sec.gov.

    Dated: August 7, 2019.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-17236 Filed 8-12-19; 8:45 am]
 BILLING CODE 8011-01-P


