[Federal Register Volume 85, Number 151 (Wednesday, August 5, 2020)]
[Notices]
[Pages 47442-47443]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17010]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File. No. 270-94, OMB Control No. 3235-0085]


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-11

    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-11, Notification 
Provisions for Brokers and Dealers (17 CFR 240.17a-11), under the 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) (``Exchange 
Act''). The Commission plans to submit this existing collection of 
information to the Office of Management and Budget (``OMB'') for 
extension and approval.
    In response to an operational crisis in the securities industry 
between 1967 and 1970, the Commission adopted Rule 17a-11 (17 CFR 
240.17a-11) under the Exchange Act on July 11, 1971. The Rule requires 
broker-dealers that are experiencing financial or operational 
difficulties to provide notice to the Commission, the broker-dealer's 
designated examining authority (``DEA''), and the Commodity Futures 
Trading Commission (``CFTC'') if the broker-dealer is registered with 
the CFTC as a futures commission merchant. Rule 17a-11 is an integral 
part of the Commission's financial responsibility program which enables 
the Commission, a broker-dealer's DEA, and the CFTC to increase 
surveillance of a broker-dealer experiencing difficulties and to obtain 
any additional information necessary to gauge the broker-dealer's 
financial or operational condition.
    Rule 17a-11 also requires over-the-counter (``OTC'') derivatives 
dealers and broker-dealers that are permitted to compute net capital 
pursuant to Appendix E to Exchange Act Rule 15c3-1 to notify the 
Commission when their tentative net capital drops below certain levels.
    To ensure the provision of these types of notices to the 
Commission, Rule 17a-11 requires every national securities exchange or 
national securities association to notify the Commission when it learns 
that a member broker-dealer has failed to send a notice or transmit a 
report required under the Rule.
    Compliance with the Rule is mandatory. The Commission will 
generally not publish or make available to any person notices or 
reports received pursuant to Rule 17a-11. The Commission believes that 
information obtained under Rule 17a-11 relates to a condition report 
prepared for the use of the Commission, other federal governmental 
authorities, and securities industry self-regulatory organizations 
responsible for the regulation or supervision of financial 
institutions.
    The Commission expects to receive 343 notices from broker-dealers 
whose capital declines below certain specified levels or who are 
otherwise experiencing financial or operational problems and eleven 
notices each year from national securities exchange or national 
securities association notifying it that a member broker-dealer has 
failed to send the Commission a notice or transmit a report required 
under the Rule. The Commission expects that it will take approximately 
one hour to prepare and transmit each notice. Therefore, the Commission 
estimates the total annual reporting burden arising from this section 
of the rule will be approximately 354 hours.\1\
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    \1\ 343 hours + 11 hours = 354 hours.
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    Rule 17a-11 also requires broker-dealers engaged in securities 
lending or repurchase activities to either: (1) File a notice with the 
Commission and their DEA whenever the total money payable against all 
securities loaned, subject to a reverse repurchase agreement or the 
contract value of all securities borrowed or subject to a repurchase 
agreement, exceeds 2,500% of tentative net capital; or, alternatively, 
(2) report monthly their securities lending and repurchase activities 
to their DEA in a form acceptable to their DEA.
    The Commission estimates that, annually, six broker-dealers will 
submit the monthly stock loan/borrow report. The Commission estimates 
each firm will spend, on average, approximately one hour per month (or 
twelve hours per year) of employee resources to prepare and send the 
report or to prepare the information for the FOCUS report (as required 
by the firm's DEA, if applicable). Therefore, the Commission estimates 
the total annual reporting burden arising from this section of the rule 
will be approximately 72 hours.\2\
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    \2\ 6 broker-dealers x 12 hours per year = 72 hours.
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    Therefore, the total annual reporting burden associated with Rule 
17a-11 is approximately 426 hours.\3\
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    \3\ 343 hours + 11 hours + 72 hours = 426 hours.

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[[Page 47443]]

    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 
estimates of the burden of the proposed collection of information; (c) 
ways to enhance the quality, utility, and clarity of the information 
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: David Bottom, Director/
Chief Information Officer, Securities and Exchange Commission, c/o 
Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or send an email 
to: PRA_Mailbox@sec.gov.

    Dated: July 30, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-17010 Filed 8-4-20; 8:45 am]
BILLING CODE 8011-01-P


