DGL REVISED 2020 17a-22 Supporting Statement 01 28 2020

SUPPORTING STATEMENT
for the Paperwork Reduction Act Information Collection Submission for
Rule 17A-22
OMB Control No. 3235-0130
A. JUSTIFICATION
1. Necessity of Information Collection
As a result of the paperwork crisis that occurred in the late 1960s, during which the
number of securities transactions exceeded the securities industry’s capacity to process those
transactions, Congress enacted the Securities Acts Amendments of 1975, 2 which amended the
Securities Exchange Act of 1934 (“Exchange Act”) in order to establish a national system for the
prompt and accurate clearance and settlement of securities transactions.
As part of those amendments, Congress authorized and directed the Securities and
Exchange Commission (the “Commission”) to oversee clearing agencies, which play a central
role in the development and functioning of the national clearance and settlement system. In 1980,
the Commission adopted Rule 17a-22 (17 CFR 240.17a-22) under the Exchange Act pursuant to
authority in Sections 2, 17, 17A, and 23(a) of the Exchange Act (15 U.S.C. Sections 78b, 78q,
78q-1, and 78w(a), respectively). The rule requires registered clearing agencies to file with the
Commission copies of any materials (such as manuals, notices, circulars, bulletins, lists, and
periodicals) that it issues or makes generally available to its participants and other interested
persons.
2. Purpose and Use of the Information Collection
The Commission uses the information filed pursuant to Rule 17a-22 to determine whether
a clearing agency (1) is implementing procedural or policy changes and, if so, to determine
whether such changes are consistent with the purposes of Section 17A of the Exchange Act, and
(2) has changed its rules without reporting the actual or prospective change to the Commission as
required by Section 19(b) of the Exchange Act. Without Rule 17a-22, the Commission could not
perform these duties as statutorily required.
3. Consideration Given to Information Technology
Rule 17a-22 requires registered clearing agencies to file three hard copies of any
materials (such as manuals, notices, circulars, bulletins, lists, and periodicals) that it issues or
makes generally available to its participants and other interested persons. Nonetheless, the
clearing agencies typically utilize computer systems to identify and collect the required
materials.
4. Duplication
2

Pub. L. No. 94-29, 89 Stat. 97 (June 4, 1975).

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Rule 17a-22 requires duplicate filings when the Commission is not a registered clearing
agency’s “appropriate regulatory agency.” 3 However, since the rule applies only to already
published material, the additional cost of making such duplicative filing is minimal.
5. Effect on Small Entities
No information is requested from small entities.
6. Consequences of Not Conducting Collection
If information were collected less frequently, the Commission’s ability to monitor
compliance of registered clearing agencies would be weakened.
7. Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)
There are no special circumstances. This collection is consistent with the guidelines in 5
CFR 1320.5(d)(2).
8. Consultations Outside the Agency
The required Federal Register notice with a 60-day comment period soliciting comments
on this collection of information was published. No public comments were received.
9. Payment or Gift
There were no payments or gifts to respondents.
10. Confidentiality
Not applicable; no assurance of confidentiality is provided by Rule 17a-22.
11. Sensitive Questions
Rule 17a-22 (extension) does not collect, process, store, or disseminate personally identifiable information.
No questions of a sensitive nature are asked.
12. Burden of Information Collection
Rule 17a-22 requires registered clearing agencies to file with the Commission copies of
any materials (such as manuals, notices, circulars, bulletins, lists, and periodicals) that it issues or
makes generally available to its participants and other interested persons. Thus, Rule 17a-22
imposes an ongoing reporting burden for registered clearing agencies.
3

“Appropriate regulatory agency” is defined in Section 3(a)(22) of the Exchange Act, 15 U.S.C.
78a22.

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The Commission receives on average approximately 840 responses per year pursuant to
Rule 17a-22. This figure is based upon the most recent responses from seven active registered
clearing agencies for which the Commission has obtained data. 4 The most active clearing
agency sent the Commission on average approximately 720 responses annually and the least
active sent on average less than fifty. 5 We think that an average of 120 annual responses per
active clearing agency is a reasonable figure. The Commission staff estimates that each response
requires approximately .25 hours (fifteen minutes), which represents the time it takes for a staff
person at the clearing agency to properly identify a document subject to the rule, print and make
copies, and mail that document to the Commission. Thus, the total annual burden for all active
clearing agencies is approximately 210 hours (7 active clearing agencies multiplied by 120
responses multiplied by .25 hours) and, on average, a total of approximately 30 hours (840 total
responses multiplied by .25 hour, divided by 7 active clearing agencies) per year are expended
by each respondent to comply with the rule.
Rule

Burden
Type

Periodic
Rule 17a-22
(Initial Form 1 Reporting
Filings)
Total Aggregate Burden

Number of
Respondents

7

Number of
Annual
Reponses
Per
Respondent
120

Time Per
Response
(Hours)

Total Burden Per
Burden Type (Hours)

.25

210
210

13. Costs to Respondents
There are no capital or start-up costs and no ongoing operation and maintenance costs
associated with this collection of information.
14. Costs to Federal Government
The annualized cost to the Federal Government is zero because the rule only requires
normal full-time employees to review the materials.
15. Changes in Burden
The aggregate hour burden decreased from 350 hours to 210 hours because the estimated
annual number of responses per respondent decreased from 200 to 120.
4

There are nine registered clearing agencies, but only seven active clearing that are
expected to submit filings pursuant to Exchange Act Rule 17a-22.
5

In recent years we have noticed variability in the number of aggregate filings and the
number of filings per clearing agency received by the Commission each year. Accordingly, for
purposes of the PRA, we are averaging the approximate number of filings received for 2017 (the
last year for which we have compiled data) by the number of active clearing agencies.

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16. Information Collection Planned for Statistical Purposes
The collection of information is not used for statistical purposes.
17. Display of OMB Approval Date
The Commission is not seeking approval to omit the expiration date.
18. Exceptions to Certification for Paperwork Reduction Act Submissions
This collection complies with the requirements in 5 CFR 1320.9.
B. COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS
This collection does not involve statistical methods.