Notice2024-05993
Submission for OMB Review; Comment Request; Extension: Rule 18a-5
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 21, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 56 (Thursday, March 21, 2024)</title>
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[Federal Register Volume 89, Number 56 (Thursday, March 21, 2024)]
[Notices]
[Pages 20258-20259]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-05993]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-667, OMB Control No. 3235-0745]
Submission for OMB Review; Comment Request; Extension: Rule 18a-5
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736
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'') has submitted to the Office of Management
and Budget (``OMB'') a request for approval of extension of the
previously approved collection of information provided for in Rule 18a-
5, under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
Rule 18a-5 enumerates the recordkeeping and reporting requirements
for security-based swap dealers (``SBSDs'') and major security-based
swap participants (``MSBSPs''). More specifically, Rule 18a-5
establishes recordkeeping requirements applicable to stand-alone SBSDs,
stand-alone MSBSPs, bank SBSDs, and bank MSBSPs. Rule 18a-5 was modeled
on Rule 17a-3 under the Exchange Act, which applies to broker-dealers,
but Rule 18a-5 does not include a parallel requirement for every
requirement in Rule 17a-3 because some of the requirements in Rule 17a-
3 relate to activities that are not expected or permitted of SBSDs and
MSBSPs. The collections of information under Rule 18a-5 include the
following types of
[[Page 20259]]
records that are required to be created: trade blotters, general
ledger, ledgers for customers and non-customer accounts, stock record,
memoranda of brokerage orders, memoranda of proprietary orders,
confirmations, accountholder information, options positions, trial
balances and computation of net capital, associated person's employment
application, account equity and margin calculations under Rule 18a-3,
possession or control requirements for security-based swap customers,
customer reserve requirements for security-based swap customers,
unverified transactions, political contributions, and compliance with
business conduct requirements. The purpose of requiring stand-alone
SBSDs, stand-alone MSBSPs, bank SBSDs, and bank MSBSPs to create the
records specified in Rule 18a-5 is to enhance regulators' ability to
protect investors. These records and the information contained therein
are used by examiners and other representatives of the Commission to
determine whether stand-alone SBSDs, stand-alone MSBSPs, bank SBSDs,
and bank MSBSPs are in compliance with the Commission's anti-fraud and
anti-manipulation rules, financial responsibility program, and other
laws, rules, and regulations.
Not all types of records enumerated in Rule 18a-5 are required to
be made by each of the entities to which Rule 18a-5 applies. For
example, Rule 18a-5 requires thirteen types of records to be made and
kept current by stand-alone SBSDs and stand-alone MSBSPs.\1\ Rule 18a-5
also requires three types of records to be made and kept current by
stand-alone SBSDs.\2\ Rule 18a-5 requires 10 types of records to be
made and kept current by bank SBSDs and bank MSBSPs, all of which are
limited to the firm's business as an SBSD or MSBSP.\3\ Further, Rule
18a-5 includes paragraphs (b)(9), (b)(10), and (b)(12) which requires
bank SBSDs to make and keep current various records for security-based
swaps.\4\
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\1\ See Rule 18a-5 (paragraph (a)(1) (trade blotters); paragraph
(a)(2) (general ledgers); paragraph (a)(3) (ledgers of customer and
non-customer accounts); paragraph (a)(4) (stock record); paragraph
(a)(5) (memoranda of proprietary orders); paragraph (a)(6)
(confirmations); paragraph (a)(7) (accountholder information);
paragraph (a)(8) (options positions); paragraph (a)(9) (trial
balances and computation of net capital); paragraph (a)(10)
(associated person's application); paragraph (a)(12) (Rule 18a-3
calculations); paragraph (a)(15) (unverified transactions);
paragraph (a)(17) (compliance with business conduct standards)).
\2\ See Rule 18a-5 (paragraph (a)(13) (compliance with Rule 18a-
4 possession or control requirements); paragraph (a)(14) (Rule 18a-4
reserve account computations); and paragraph (a)(16) (political
contributions)).
\3\ See Rule 18a-5 (paragraph (b)(1) (trade blotters); paragraph
(b)(2) (general ledgers); paragraph (b)(3) (stock record); paragraph
(b)(4) (memoranda of brokerage orders); paragraph (b)(5) (memoranda
of proprietary orders); paragraph (b)(6) (confirmations); paragraph
(b)(7) accountholder information); paragraph (b)(8) (associated
person's application); paragraph (b)(11) (unverified transactions);
and paragraph (b)(13) (compliance with business conduct
requirements)).
\4\ See Rule 18a-5 (paragraph (b)(9) (possession or control
requirements under Rule 18a-4); paragraph (b)(10) (customer reserve
requirements under Rule 18a-4); and paragraph (b)(12) (political
contributions)).
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As of November 30, 2023, there are 11 stand-alone SBSDs, zero
stand-alone MSBSPs, 29 bank SBSDs, and zero bank MSBSPs registered with
the Commission. The Commission estimates that each recordkeeping
provision of Rule 18a-5 imposes on each firm that is subject to the
provision an initial burden and an ongoing annual burden. The total
initial industry hour burden attributable to Rule 18a-5 is estimated to
be 11,060 hours in the first year and the total industry ongoing hour
burden attributable to Rule 18a-5 is estimated to be 13,825 hours per
year (including the first year). Over a three-year period, the total
estimated industry burden is estimated to be 52,535 hours, or about
17,511 hours per year when annualized. These burdens are recordkeeping
burdens.
In addition, the Commission estimates that Rule 18a-5 causes a
stand-alone SBSD or stand-alone MSBSP to incur an initial dollar cost
of approximately $1,000 to purchase recordkeeping system software and
an ongoing dollar cost of $4,650 per year to provide adequate physical
space and computer hardware and software for storage. As of November
30, 2023, there are 11 respondents (11 stand-alone SBSDs and zero
stand-alone MSBSPs), resulting in an estimated industry-wide initial
burden of $11,000 and an industry-wide ongoing burden of $51,150 per
year. Over a three-year period, the total estimated industry burden
would be $164,450, or about $54,817 per year when annualized.
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.
The public may view background documentation for this information
collection at the following website: <a href="http://www.reginfo.gov">www.reginfo.gov</a>. Find this
particular information collection by selecting ``Currently under 30-day
Review--Open for Public Comments'' or by using the search function.
Written comments and recommendations for the proposed information
collection should be sent by April 22, 2024 to (i) <a href="http://www.reginfo.gov/public/do/PRAMain">www.reginfo.gov/public/do/PRAMain</a> and (ii) David Bottom, Director/Chief Information
Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F
Street NE, Washington, DC 20549, or by sending an email to:
<a href="/cdn-cgi/l/email-protection#9bcbc9dac4d6faf2f7f9f4e3dbe8fef8b5fcf4ed"><span class="__cf_email__" data-cfemail="aefefceff1e3cfc7c2ccc1d6eeddcbcd80c9c1d8">[email protected]</span></a>.
Dated: March 18, 2024.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-05993 Filed 3-20-24; 8:45 am]
BILLING CODE 8011-01-P
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