3235-0123 Supporting Statement (Rule 17a-5-- Partial Revision 2021)

3235-0123 Supporting Statement (Rule 17a-5-- Partial Revision 2021).pdf

Rule 17a-5, Form X-17A-5 (FOCUS REPORT)

OMB: 3235-0123

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SUPPORTING STATEMENT
for the Paperwork Reduction Act Information Collection Submission for Rule 17a-5
OMB Control No. 3235-0123
Partial Revision
A.

JUSTIFICATION
1.

Information Collection Necessity

Section 17(a)(1) 1 of the Securities Exchange Act of 1934 (“Exchange Act”) provides that
broker-dealers must make and keep records, furnish copies of the records, and make and
disseminate reports as the Securities and Exchange Commission (“Commission”), by rule,
prescribes. Section 17(e)(1)(A) 2 of the Exchange Act requires every broker-dealer registered
with the Commission to file annually with the Commission: (1) a balance sheet and income
statement “certified by a[n] independent public accounting firm, or by a registered public
accounting firm if the firm is required to be registered under the Sarbanes-Oxley Act of 2002”;
and (2) such other financial statements (which shall, as the Commission specifies, be certified)
and information concerning its financial condition as the Commission, by rule, may prescribe. A
registered public accounting firm means a public accounting firm registered with the Public
Company Accounting Oversight Board (“PCAOB”). 3 Section 17(e)(2) 4 of the Exchange Act
provides that the Commission, by rule, may prescribe the form and content of the financial
statements and the accounting principles and standards used in their preparation.
Exchange Act Rule 17a-5 5 is a reporting rule for broker-dealers. Paragraph (a) of Rule
17a-5 requires broker-dealers to file Form X-17A-5, 6 the Financial and Operational Combined
Uniform Single Report (“FOCUS Report”). The FOCUS Report was designed to eliminate the
overlapping regulatory reports required by various self-regulatory organizations and the
Commission and to reduce reporting burdens. The FOCUS Report consists of: (1) Part I, which
is a monthly report that must be filed by every broker-dealer that clears transactions or carries
customer accounts; 7 (2) one of two alternative monthly or quarterly reports (a comprehensive
Part II which must be filed by every broker-dealer that clears transactions or carries customer
accounts and over-the-counter (“OTC”) derivatives dealers; or a less detailed Part IIA which
must be filed by broker-dealers that do not clear transactions or carry customer accounts); 8 and
1

See 15 U.S.C. § 78q(a)(1).

See 15 U.S.C. § 78q(e)(1)(A).

See Pub. L. No. 107-204 § 2(a)(12).

See 15 U.S.C. § 78q(e)(2).

See 17 CFR 240.17a-5.

See 17 CFR 249.17a-5(a).

In practice, broker-dealers are no longer required to file Part I of the FOCUS Report. See 17 CFR
240.17a-5(a)(4).

These reports must be filed within 17 business days after the end of each calendar month or quarter and
within 17 days after the end of the fiscal year of the broker-dealer if that date is not the end of a calendar
quarter. However, if a broker-dealer ceases to be a member in good standing of a national securities
exchange or registered national securities association, paragraph (b) of Rule 17a-5 requires the broker-

(3) Part III, a Facing Page, which must be filed as the cover page for the annual audited financial
statements broker-dealers file with the Commission pursuant to paragraph (d) of Rule 17a-5.
Paragraph (c) of Rule 17a-5 requires broker-dealers to furnish certain financial
information to customers. 9 Paragraph (d) of Rule 17a-5 requires broker-dealers, subject to
limited exception, to file annual reports, including financial statements and supporting schedules
that generally must be audited by a PCAOB-registered independent public accountant in
accordance with PCAOB standards. 10 Paragraph (h) of Rule 17a-5 contains notification
requirements related to certain findings made during the course of the independent accountant’s
audit. 11 Paragraph (k) of Rule 17a-5 pertains to supplemental reports to be filed by brokerdealers that compute certain capital charges in accordance with Appendix E to Exchange Act
Rule 15c3-1. 12 Paragraph (p) of Rule 17a-5 provides that OTC derivatives dealers may comply
with Rule 17a-5 by complying with Exchange Act Rule 17a-12. 13
Partial Revision to Collection of Information
As discussed further below, the Commission adopted amendments to Rule 17a-3 in 2019
pursuant to authority in the Dodd-Frank Act. The 2019 amendments are not required to be
complied with until October 6, 2021 and this partial revision provides new or updated burden
estimates in connection with the 2019 rule amendments.
On September 19, 2019, the Commission adopted amendments to its recordkeeping and
reporting rules for broker-dealers, as well as new recordkeeping and reporting rules for securitybased swap dealers and major security-based swap participants. 14 Among other things, pursuant
to sections 17(a) and 15F(f) of the Exchange Act, the Commission amended FOCUS Report Part
II to require reporting of certain security-based swap activity and amended Rule 17a-5 to require
broker-dealer SBSDs, broker-dealer MSBSPs, and alternative net capital (“ANC”) brokerdealers to file FOCUS Report Part II, as amended. 15

dealer to file its final applicable report within two business days after the broker-dealer ceases to be a
member in good standing of such exchange or association, subject to certain exceptions.
9

See 17 CFR 240.17a-5(c). Paragraph (c) of Rule 17a-5 is subject to a separate Paperwork Reduction Act
filing (OMB Control Number 3235-0199).

See 17 CFR 240.17a-5(d).

See 17 CFR 240.17a-5(h).

See 17 CFR 240.17a-5(k); 17 CFR 240.15c3-1e.

See 17 CFR 240.17a-5(p); 17 CFR 240.17a-12.

See Recordkeeping and Reporting Requirements for Security-Based Swap Dealers, Major Security-Based
Swap Participants, and Broker-Dealers; Final Rule, Exchange Act Release No 34-87005. (Sep. 19, 2019),
84 FR 68550 (Dec. 16, 2019).

See Recordkeeping and Reporting Requirements for Security-Based Swap Dealers, Major Security-Based
Swap Participants, and Broker-Dealers; Final Rule, Exchange Act Release No. 34-87005 (Sep. 19, 2019),
84 FR 68550 (Dec. 16, 2019).

The Commission also amended paragraph (e)(2) of Rule 17a-5 to simplify the description
of a broker-dealer’s obligations in connection with filing the annual reports with the
Commission, the firm’s designated examining authority (“DEA”), and, in most cases, with the
Securities Investor Protection Corporation (“SIPC”). 16 In addition, the Commission adopted
several technical amendments to Rule 17a-5 to account for FOCUS Report Part II, as amended,
and to account for paragraph (p) of Exchange Act Rule 15c3-3, as amended, which establishes
requirements relating to a broker-dealer’s segregation of collateral given to a broker-dealer to
secure a security-based swap (“SBS”) transaction. 17
Following the amendments to Rule 17a-5, the Commission requested an extension of the
currently approved collection in August of 2020. The extension was approved in October
2020. 18 That extension did not address the estimated burdens associated amendments to Rule
17a-5 adopted in September 2019. Instead, this Supporting Statement addresses the 2019
amendments and the estimated burdens associated with them.
2.

Information Collection Purpose and Use

Reports required to be made under Rule 17a-5 are used, among other things, to monitor
the financial and operational condition of a broker-dealer by Commission staff and by the
broker-dealer’s designated examining authority (“DEA”). The reports required under Rule 17a-5
are one of the primary means of ensuring compliance with the financial responsibility rules. A
firm’s failure to comply with these rules would severely impair the ability of the Commission
and the firm’s DEA to protect customers.
FOCUS Report data is used in preparation for broker-dealer examinations and
inspections. The completed forms also are used to determine which firms are engaged in various
securities-related activities, the extent to which they are engaged in those activities, and how
economic events and government policies might affect various segments of the securities
industry.
3.

Consideration Given to Information Technology

The data required in the FOCUS Report are tailored to the complexity of the brokerdealer’s business. The burden is therefore commensurate with the type of business in which the
firm engages. Approximately 90% of FOCUS Reports are filed electronically. Annual reports
are filed with the Commission in paper form, although Commission staff have issued no-action
guidance permitting registrants to file annual reports electronically through the Commission’s
EDGAR system.

See paragraph (e)(2) of Rule 17a-5, as amended.

See, e.g., paragraphs (a)(1)(iv), (a)(1)(v), (a)(3), (b)(1), (d)(1)(i)(B), (d)(2), (d)(3), and (h) of Rule 17a-5, as
amended.

See https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202005-3235-021.

Duplication

The Commission designed Rule 17a-5 to eliminate duplicative reporting requirements
among the various securities regulatory agencies. Therefore, any duplication of the information
requested is minimal.
5.

Effect on Small Entities

As discussed above, a broker-dealer typically must file one of two alternative quarterly or
monthly reports: (1) a comprehensive FOCUS Report Part II which must be filed by every
broker-dealer that clears transactions or carries customer accounts and OTC derivatives dealers;
or (2) a less detailed FOCUS Report Part IIA which must be filed by broker-dealers that do not
clear transactions or carry customer accounts. The majority of small broker-dealers file FOCUS
Report Part IIA because they do not clear transactions or carry customer accounts. Part IIA is
shorter and is required to be filed less often than Part II. Out of the 460 broker-dealers that file
Part II, the Commission does not believe any are small firms since they are clearing firms or
carrying customer accounts. Even if small firms filed FOCUS Report Part II, it would be
inappropriate to provide these small firms with an exemption from Rule 17a-5 because the
FOCUS Report provides Commission and DEA staff with critical financial information from the
firms responsible for the safekeeping and disposition of customer funds and securities.
The Commission does not anticipate that small broker-dealers will be affected by the
amendments to Rule 17a-5 adopted in September 2019 because the Commission expects only
broker-dealers with relatively complex business models to engage in security-based swap
activity or register as SBSDs or MSBSPs.
6.

Consequences of Not Conducting Collection

The required reports are used by securities regulators to monitor the financial and
operational condition of broker-dealers. If the required reports were not made, the ability of the
Commission and the DEAs to monitor the financial and operational condition of broker-dealers
would be impaired, potentially affecting regulators’ capability to protect customers. Further, if
the required collections were conducted less frequently, the information in the reports would
become outdated.
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 Commission requested comment on the collection of information requirements in the
2019 Amendments when they were proposed in April 2014. 19 The Commission received no
19

See Recordkeeping and Reporting Requirements for Security-Based Swap Dealers, Major Security-Based
Swap Participants, and Broker-Dealers; Capital Rule for Certain Security-Based Swap Dealers; Proposed
Rule, Exchange Act Release No. 71958 (Apr. 17, 2014), 79 FR 25193 (May 2, 2014).

comments regarding the burden and cost estimates. The proposed revisions to the collection of
information was submitted to OMB in 2016 (ICR Ref. No. 201606-3235-015).
9.

Payment or Gift

No payment or gift is provided to respondents.
10.

Confidentiality

Reports filed pursuant to paragraph (a) of Rule 17a-5 are deemed to be confidential
pursuant to paragraph (a)(3) of Rule 17a-5. Annual reports filed by broker-dealers under
paragraph (d) of Rule 17a-5 are not confidential, except that if the Statement of Financial
Condition is bound separately from the balance of the annual reports, and each page of the
balance of the annual reports is stamped “confidential,” then the balance of the annual reports
shall be deemed confidential to the extent permitted by law. 20 Broker-dealers are also required
to furnish customers with their audited statement of financial condition and certain information
about their annual reports on an annual basis. 21 In addition, broker-dealers are required to
furnish customers with unaudited financial statements dated six months from the date of the
audited statements. 22 With respect to the other information collected under the amendments, a
broker-dealer can request the confidential treatment of the information. 23 If such a confidential
treatment request is made, the information will be treated as confidential to the extent permitted
by law. 24
Subject to the provisions of the Freedom of Information Act, 5 U.S.C. § 552, and the
Commission’s rules thereunder (17 CFR 200.80(b)(4)(iii)), the Commission generally does not
publish or make available information contained in 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.
11.

Sensitive Questions

The information collection collects Personally Identifiable Information (PII) of certain
individuals. In accordance with Section 208 of the E-Government Act of 2002, the agency has conducted
a Privacy Impact Assessment (PIA) of the EDGAR system, in connection with this collection of
information. The EDGAR PIA, published on February 5, 2020, is provided as a supplemental document
and is also available at https://www.sec.gov/privacy. The agency has determined that the information
collection does not constitute a system of record for purposes of the Privacy Act as the information is not
retrieved by a personal identifier.

See paragraph (e)(3) of Rule 17a-5.

See paragraph (c)(2) of Rule 17a-5.

See paragraph (c)(3) of Rule 17a-5.

See 17 CFR 200.83. Information regarding requests for confidential treatment of information submitted to
the Commission is available at http://www.sec.gov/foia/howfo2.htm#privacy.

See, e.g., 15 U.S.C. 78x (governing the public availability of information obtained by the Commission);
5 U.S.C. 552 et seq.

12.

Information Collection Burden

RULE 17A-5 BURDENS PREVIOUSLY APPROVED PRIOR TO THE AMENDMENTS
This section summarizes the burdens associated with Rule 17a-5 that are not affected by
the amendments adopted in September 2019. With respect to each of these burdens, the relevant
entity will not be engaged in activities involving security-based swaps.
FOCUS Report for Broker-Dealers that Clear Transactions or Carry Customer
Accounts: Broker-dealers that clear transactions or carry customer accounts and do not use
ANC models to calculate net capital are required to file FOCUS Report Part II on a monthly
basis. 25 Commission staff estimates that each FOCUS Report Part II takes approximately 12
hours to prepare and file. This estimate is based on Commission staff’s history and experience
reviewing these filings and communicating with broker-dealers regarding the reports. As of
December 31, 2019, approximately 460 firms cleared transactions or carried customer accounts
and therefore filed FOCUS Report Part II. As a result, each respondent is estimated to have an
annual burden of 144 hours, 26 resulting in an annual industry burden of 66,240 hours. 27
FOCUS Report for Broker-Dealers that do not Clear Transactions or Carry
Customer Accounts: Broker-dealers that do not clear transactions or carry customer accounts
and do not use ANC models to calculate net capital are required to file FOCUS Report Part IIA
on a quarterly basis. 28 Commission staff estimates that each FOCUS Report Part IIA takes
approximately 12 hours to prepare and file. As of December 31, 2019, approximately 3,215
firms filed FOCUS Report Part IIA. As a result, each respondent is estimated to have an annual
reporting burden of 48 hours, 29 resulting in an annual industry burden of 154,320 hours. 30
ANC Supplemental Reports: As previously explained, paragraph (k) of Rule 17a-5
requires broker-dealers that compute certain capital charges in accordance with Appendix E to
Exchange Act Rule 15c3-1 31 to file supplemental reports with the Commission regarding their
internal risk management controls. The Commission currently estimates that approximately 10
broker-dealers will elect to use Appendix E to Rule 15c3-1 to compute certain of their capital
charges.
25

See 17 CFR 240.17a-5(a)(2)(ii).

12 hours x 12 responses per year = 144 hours per respondent.

144 hours per respondent x 460 respondents = 66,240 hours per year.

See 17 CFR 240.17a-5(a)(2)(iii).

12 hours x 4 responses per year = 48 hours per respondent.

48 hours per respondent x 3,215 respondents = 154,320 hours per year.

Generally, a broker-dealer meeting certain conditions, including the existence of strong internal risk
management practices, may apply to the Commission for authorization to use the alternative method for
computing capital contained in Appendix E to Rule 15c3-1, thereby permitting the firm to utilize the
mathematical modeling methods it uses to manage its own business risk, including value-at-risk models and
scenario analysis, to compute deductions from net capital for market risks and for credit risks arising from
OTC derivatives transactions.

ANC Supplemental Monthly Reports: The average amount of time necessary to prepare
and file the required supplemental monthly reports by each firm is estimated to be 4 hours per
month. As a result, each firm is estimated to have an annual reporting burden of 48 hours, 32
resulting in an annual industry burden of 480 hours. 33 This estimate is based on Commission
staff’s history and experience reviewing these filings and communicating with broker-dealers
regarding the reports.
ANC Supplemental Quarterly Reports: The average amount of time necessary to prepare
and file the required supplemental quarterly reports is estimated to be 8 hours per quarter. As a
result, each firm is estimated to have an annual reporting burden of 32 hours, 34 resulting in an
annual industry burden of 320 hours.35 This estimate is based on Commission staff’s history
and experience reviewing these filings and communicating with broker-dealers regarding the
reports.
ANC Supplemental Annual Reports: The average amount of time necessary to prepare
and file the required supplemental annual reports with the annual audit required is estimated to
be 40 hours per year. As a result, each firm is estimated to have an annual reporting burden of
40 hours, 36 resulting in an annual industry burden of 400 hours.37 This estimate is based on
Commission staff’s history and experience reviewing these filings and communicating with
broker-dealers regarding the reports.
Annual Reports: Paragraph (d) of Rule 17a-5 requires most broker-dealers to file
annual reports, including financial statements and supporting schedules that generally must be
audited by a PCAOB-registered independent public accountant in accordance with PCAOB
standards. 38 Approximately 3,679 broker-dealers filed annual audited financial statements for
fiscal year 2019. 39 Each firm is estimated to have an annual reporting burden of 12 hours, 40
resulting in an annual industry burden of 44,148 hours. 41
A broker-dealer that does not claim it was exempt from Rule 15c3-3 throughout the most
recent fiscal year must file a compliance report with the Commission on an annual basis. 42 As of
June 30, 2016, there are approximately 175 carrying broker-dealers that must comply with Rule
32

4 hours x 12 responses per year = 48 hours per respondent.

48 hours per respondent x 10 respondents = 480 hours per year.

8 hours x 4 responses per year = 32 hours per respondent.

32 hours per respondent x 10 respondents = 320 hours per year.

40 hours x 1 response per year = 40 hours per respondent.

40 hours per respondent x 10 respondents = 400 hours per year.

See 17 CFR 240.17a-5(d).

This filing includes Form X-17A-5 Schedule I and Form X-17A-5 Part III. The burden estimate also
includes related filing responsibilities under paragraph (c) of Rule 17a-5.

12 hours x 1 response per year = 12 hours per respondent.

12 hours per respondent x 3,679 respondents = 44,148 hours per year.

See 17 CFR 240.17a-5(d)(1)(i)(B)(1).

15c3-3 and therefore must file an annual compliance report. The Commission estimates that it
takes approximately 60 hours to prepare the compliance report. As a result, each respondent is
estimated to have an annual reporting burden of 60 hours, 43 resulting in an annual industry
burden of 10,500 hours.44
Exemption Report: A broker-dealer that claims it was exempt from Rule 15c3-3
throughout the most recent fiscal year must file an exemption report with the Commission on an
annual basis. 45 As of December 31, 2019, 3,689 broker-dealers filed FOCUS Reports with the
Commission. Of these, 3,001 broker-dealers claimed exemptions from Rule 15c3-3. The
Commission estimates that it takes a broker-dealer claiming an exemption from Rule 15c3-3
approximately 7 hours to complete the exemption report. As a result, each respondent is
estimated to have an annual reporting burden of 7 hours, 46 resulting in an annual industry
burden of 21,007. 47
SIPC Annual Reports: Paragraph (d)(6) of Rule 17a-5 requires SIPC member brokerdealers to file a copy of the annual reports with SIPC. 48 According to SIPC’s 2018 annual
report, there were approximately 3,621 SIPC members. The Commission estimates that it takes
a broker-dealer approximately 30 minutes to file the annual reports with SIPC. As a result, each
firm is estimated to have an annual third-party disclosure burden of 30 minutes, 49 resulting in an
annual industry burden of 1,810.5 hours.50
Change of Fiscal Year End: Paragraph (d)(1)(ii) of Rule 17a-5 requires a copy of a
DEA’s written approval to change a broker-dealer’s fiscal year end be sent to the Commission’s
principal office in Washington, D.C., in addition to the regional office of the Commission for the
region in which the broker-dealer has its principal place of business. Based on the number of
copies of approvals received by the Commission and staff experience in the application of Rule
17a-5, the Commission estimates 75 broker-dealers will receive approval each year to change
their fiscal year end. The Commission estimates that it takes a broker-dealer approximately 10
minutes 51 to copy and send a copy of the approval to the Commission. As a result, each firm is
estimated to have an annual reporting burden of about 0.167 hours, 52 resulting in an annual
industry burden of about 12.5 hours. 53
43

60 hours x 1 response per year = 60 hours per respondent.

60 hours per respondent x 175 respondents = 10,500 hours per year.

See 17 CFR 240.17a-5(d)(1)(i)(B)(1) and (2).

7 hours x 1 response per year = 7 hours per respondent.

7 hours per respondent x 3,001respondents = 21,007 hours per year.

See 17 CFR 240.17a-5(d)(6).

.5 hours x 1 response per year = .5 hours per respondent.

.5 hours per respondent x 3,621 respondents = 1,810.5 hours per year.

10 minutes / 60 minutes = 0.1667 hours.

0.167 hours x 1 response per year = 0.167 hours per respondent.

0.167 hours per respondent x 75 respondents = 12.5 hours.

SIPC Annual General Assessment Reconciliation Report or Exclusion from
Membership Forms: Paragraph (e)(4) of Rule 17a-5 requires broker-dealers to file with SIPC a
report on the SIPC annual general assessment reconciliation or exclusion from membership
forms. 54 Commission staff estimates that it takes a broker-dealer approximately 5 hours to file
SIPC’s annual assessment reconciliation form or certification of exclusion from membership
forms. There are approximately 3,689 broker-dealers, resulting in an estimated annual
industry burden of about 18,445 hours. 55
Statement Regarding Independent Public Accountant: Paragraph (f)(2) of Rule 17a-5
requires broker-dealers to prepare a statement providing information regarding the brokerdealer’s independent public accountant and to file it each year with the Commission and its DEA
(except that if the engagement is of a continuing nature, no further filing is required). 56
Carrying or Clearing Broker-Dealer: The Commission estimates that it takes a carrying
or clearing broker-dealer approximately 10 hours to file the Statement Regarding Independent
Public Accountant with the Commission. As a result, each carrying or clearing broker-dealer is
estimated to have an annual burden of 10 hours. 57 The Commission estimates there are
460carrying or clearing broker-dealers required to file the Statement Regarding Independent
Public Accountant each year, resulting in an annual industry burden of 4,600 hours. 58
Broker-Dealers that Neither Carry nor Clear Transactions: The Commission estimates
that it takes a broker-dealer that neither carries customer accounts nor clears transactions
approximately 2 hours to file the Statement Regarding Independent Public Accountant with the
Commission. As a result, each broker-dealer that neither carries nor clears transactions is
estimated to have an annual burden of 2 hours. 59 The Commission estimates there are 3,215
broker-dealers that neither carry nor clear transactions required to file the Statement Regarding
Independent Public Accountant each year, resulting in an annual industry burden of 6,430
hours. 60
Statement Regarding Change of Independent Public Accountant: Paragraph (f)(3) of
Rule 17a-5 requires a broker-dealer to file a notice with the Commission if it replaces the
independent public accountant engaged to prepare reports covering the annual reports. 61 The
estimated one-time burden associated with this requirement is approximately 2 hours, or about
0.67 hours on an annualized basis. 62 The Commission estimates that approximately 50 of these
54

See 17 CFR 240.17a-5(e)(4).

5 hours x 3,689 broker-dealers = 18,445 hours.

See 17 CFR 240.17a-5(f)(2).

10 hours per response x 1 response per year = 10 hours per respondent.

10 hours per respondent x 60 respondents = 600 hours per year.

2 hours per response x 1 response per year = 2 hours per respondent.

2 hours per respondent x 440 respondents = 880 hours per year.

See 17 CFR 240.17a-5(f)(3).

2 hours / 3 years = 0.67 hours per respondent.

notices are filed per year, resulting in an annual industry burden of 100 hours, 63 or about 33.33
hours on an annualized basis. 64
Total Industry Hour Burden: Thus, the Commission estimated that the total annual
industry hour burden attributable to Rule 17a-5 with respect to those provisions not impacted by
the amendments adopted in September 2019 is 328,746 hours per year. 65
Summary of Hourly Burdens
A.
Name of Information Collection

Type of
Burden

Number
of
Entities
Impacted

Annual
Responses
per Entity

Initial
Burden per
Entity per
Response

D.
E.
Initial
Ongoing
Burden
Burden per
Annualized
Entity per
per Entity
Response
per Response
[C ÷ 3 years]

Annual
Burden Per
Entity per
Response

Total Annual
Burden Per
Entity

Total Industry
Burden

[ D + E]

[F * B]

[G * A]

Small
Business
Entities
Affected

FOCUS Report Part II: NonModel Clearing Broker-Dealers

Reporting

460

0.00

12.00

144.00

66,240.00

FOCUS Report Part IIA: NonModel Non-Clearing BrokerDealers

Reporting

3,215

0.00

12.00

48.00

154,320.00

895

ANC Supplemental Monthly
Reports

Reporting

0.00

4.00

48.00

480.00

ANC Supplemental Quarterly
Reports

Reporting

0.00

8.00

32.00

320.00

ANC Supplemental Annual
Reports

Reporting

0.00

40.00

400.00

Annual Reports

Reporting

3,679

0.00

12.00

44,148.00

895

Compliance Report

Reporting

175

0.00

60.00

10,500.00

Exemption Report

Reporting

3,001

0.00

7.00

21,007.00

895

SIPC Annual Reports

Third-Party
Disclosure

3,621

0.00

0.50

1,810.5

859

Change of Fiscal Year End

Reporting

0.00

0.17

12.50

Annual General Assessment
Reconciliation or Exclusion
from Membership Forms

Third-Party
Disclosure

3,689

0.00

5.00

18,445.00

895

Statement Regarding
Independent Public Accountant
- Carrying or Clearing BrokerDealer

Reporting

460

0.00

10.00

4600.00

Statement Regarding
Independent Public Accountant
- Non-Carrying or Non-Clearing
Broker-Dealer

Reporting

3,215

0.00

2.00

6,430.00

112

2 hours per respondent x 50 respondents = 100 hours per year.

100 hours / 3 years = 33.33 hours per year.

66,240 hours + 154,320 hours + 480 hours + 320 hours + 400 hours + 44,148 hour + 10,500 hours + 21,007
hours + 1,810.5 hours + 12.5 hours +18,445 hours + 4600 hours + 6,430 hours + 33.33 hours = 328,746.33
hours.

Summary of Hourly Burdens
A.
Name of Information Collection

Type of
Burden

Number
of
Entities
Impacted

Annual
Responses
per Entity

Initial
Burden per
Entity per
Response

D.
E.
Initial
Ongoing
Burden
Burden per
Annualized
Entity per
per Entity
Response
per Response
[C ÷ 3 years]

Statement Regarding Change in
Independent Public Accountant

Reporting

2.00

0.67

0.00

Annual
Burden Per
Entity per
Response

Total Annual
Burden Per
Entity

Total Industry
Burden

[ D + E]

[F * B]

[G * A]

0.67

TOTAL HOURLY BURDEN FOR ALL RESPONDENTS

0.67

Small
Business
Entities
Affected

33.33

328,746.33

PARTIAL REVISION: New Burdens Associated with Amendments to Rule 17a-5
Regarding Security-Based Swap Activities Adopted in September 2019
Rule 17a-5, as amended in the in September 2019, establishes additional reporting
requirements applicable to broker-dealers to the extent they engage in activities involving or
swap or security-based swaps. 66 The Commission expects that many of the amendments, which
are largely technical in nature, do not impose an additional hour burden or costs. Those
amendments that are expected to impose an additional one-time initial burden or an additional
ongoing burden to the industry are discussed below.
FOCUS Report Part II for Non-Model Broker-Dealer SBSDs: The Commission
amended paragraph (a)(1)(ii) of Rule 17a-5 to require broker-dealer SBSDs to file FOCUS
Report Part II, as amended, on a monthly basis. 67 Given that SBSDs are expected to be
relatively large and sophisticated firms, the Commission assumes that broker-dealer SBSDs are
carrying firms which filed FOCUS Report Part II before dually registering as an SBSD.
Although broker-dealer SBSDs will continue to file FOCUS Report Part II, the burden on
broker-dealer SBSDs will increase because FOCUS Report Part II is being amended so that
broker-dealer SBSDs are required to complete additional sections and line items eliciting more
detail about their SBS and swap activities. 68 In consideration of these additional requirements,
66

See Recordkeeping and Reporting Requirements for Security-Based Swap Dealers, Major Security-Based
Swap Participants, and Broker-Dealers; Final Rule, Exchange Act Release No. 87005 (Sep. 19, 2019),
84FR 68550 (Dec. 16, 2019).

See 17 CFR 240.17a-5(a)(1)(ii).

Non-model broker-dealer SBSDs are required to complete the following new sections: (1) Financial and
Operational Data – Operational Deductions from Capital – Note A; (2) Financial and Operational Data –
Potential Operational Charges Not Deducted from Capital – Note B; (3) Computation for Determination of
PAB Requirements; (4) Computation for Determination of Security-Based Swap Customer Reserve
Requirements; (5) Possession or Control for Security-Based Swap Customers; (6) Schedule 1 – Aggregate
Securities, Commodities, and Swaps Positions; (7) Schedule 2 – Credit Concentration Report for Fifteen
Largest Current Exposures in Derivatives; (8) Schedule 3 – Portfolio Summary of Derivatives Exposures
by Internal Credit Rating; and (9) Schedule 4 – Geographic Distribution of Derivatives Exposures for Ten
Largest Countries. In addition, non-model broker-dealer SBSDs also registered as FCMs will be required
to file the following sections not included on pre-existing Part II, but which the CFTC already requires
FCMs to file as part of Form 1-FR-FCM: (1) Computation of CFTC Minimum Capital Requirement;
(2) Statement of Segregation Requirements and Funds in Segregation for Customers Trading on U.S.
Commodity Exchanges; (3) Statement of Cleared Swaps Customer Segregation Requirements and Funds in
Cleared Swaps Customer Accounts under Section 4d(f) of the Commodity Exchange Act; (4) Statement of

the Commission estimates that the requirement for non-model broker-dealer SBSDs to file
amended FOCUS Report Part II every month will impose an initial burden of an additional 50
hours per firm in the first year and an ongoing burden of 240 hours per firm in each year
(including the first year). The Commission estimates that there will be six non-model brokerdealer SBSDs, resulting in an initial burden to the industry of an additional 300 hours in the first
year 69 and an ongoing burden of 1,440 hours per year (including the first year). 70 Over a three
year period, the total industry burden is estimated to be 4,620 hours, 71 or 1,540 hours per year
when annualized. 72
FOCUS Report Part II for Non-Model Broker-Dealer MSBSPs: The Commission
amended paragraph (a)(1)(ii) of Rule 17a-5 to require broker-dealer MSBSPs to file FOCUS
Report Part II, as amended, on a monthly basis. 73 Given that MSBSPs are expected to be
relatively large and sophisticated firms, the Commission assumes that broker-dealer MSBSPs are
carrying firms which filed FOCUS Report Part II before dually registering as an MSBSP.
Although broker-dealer MSBSPs will continue to file FOCUS Report Part II, the burden on
broker-dealer MSBSPs will increase because FOCUS Report Part II is being amended so that
broker-dealer MSBSPs are required to complete additional sections and line items eliciting more
detail about their SBS and swap activities. 74 In consideration of these additional requirements,
Segregation Requirements and Funds in Segregation for Customers’ Dealer Options Accounts; and
(5) Statement of Secured Amounts and Funds Held in Separate Accounts for Foreign Futures and Foreign
Options Customers Pursuant to CFTC Regulation 30.7. The Commission does not estimate a burden for
these 5 sections from Form 1-FR-FCM, since the CFTC already requires FCMs to file these 5 sections on a
monthly basis (17 CFR 1.10(b)(i)), and therefore, the hourly burden is already accounted for in the PRA
estimate for the CFTC’s Rule 1.10 (1 CFR 1.10). In addition, the Commission does not anticipate that
FCMs will be required to file both the CFTC’s Form 1-FR-FCM and the Commission’s amended FOCUS
Report Part II.
69

50 hours x 6 non-model broker-dealer SBSDs = 300 hours.

240 hours x 6 non-model broker-dealer SBSDs = 1,440 hours.

(300 hours in first year + 1,440 hours in first year) + 1,440 hours in second year + 1,440 hours in third year
= 4,620 hours.

4,620 hours / 3 years = 1,540 hours per year.

See 17 CFR 240.17a-5(a)(1)(ii).

Broker-dealer MSBSPs will be required to complete the following new sections: (1) Financial and
Operational Data – Operational Deductions from Capital – Note A; (2) Financial and Operational Data –
Potential Operational Charges Not Deducted from Capital – Note B; (3) Computation for Determination of
PAB Requirements; (4) Schedule 1 – Aggregate Securities, Commodities, and Swaps Positions;
(5) Schedule 2 – Credit Concentration Report for Fifteen Largest Exposures in Derivatives; (6) Schedule 3
– Portfolio Summary of Derivatives Exposures by Internal Credit Rating; and (7) Schedule 4 – Geographic
Distribution of Derivatives Exposures for Ten Largest Countries. In addition, broker-dealer MSBSPs also
registered as FCMs will be required to file the following sections not included on pre-existing Part II, but
which the CFTC already requires FCMs to file as part of Form 1-FR-FCM: (1) Computation of CFTC
Minimum Capital Requirement; (2) Statement of Segregation Requirements and Funds in Segregation for
Customers Trading on U.S. Commodity Exchanges; (3) Statement of Cleared Swaps Customer Segregation
Requirements and Funds in Cleared Swaps Customer Accounts under Section 4d(f) of the Commodity
Exchange Act; (4) Statement of Segregation Requirements and Funds in Segregation for Customers’ Dealer
Options Accounts; and (5) Statement of Secured Amounts and Funds Held in Separate Accounts for
Foreign Futures and Foreign Options Customers Pursuant to CFTC Regulation 30.7. The Commission
does not estimate a burden for these 5 sections from Form 1-FR-FCM, since the CFTC already requires

the Commission estimates that the requirement for broker-dealer MSBSPs to file amended
FOCUS Report Part II every month imposes an initial burden of 35 hours per firm in the first
year and an ongoing burden of 204 hours per firm in each year (including the first year). The
estimated hourly burdens for broker-dealer MSBSPs are slightly less than the estimates for
broker-dealer SBSDs because broker-dealer MSBSPs are not required to complete the sections of
amended FOCUS Report Part II relating to paragraph (p) of Rule 15c3-3. The Commission
estimates that there will be one broker-dealer MSBSP, resulting in an initial burden of an
additional 35 hours 75 in the first year and an additional ongoing burden of 204 hours per year
(including the first year). 76 Over a three-year period, the total industry burden is estimated to be
647 hours, 77 or about 216 hours per year when annualized. 78
Amended FOCUS Report Part II for ANC Broker-Dealer SBSDs: The Commission
amended paragraph (a)(1)(ii) of 17a-5 to require ANC broker-dealer SBSDs to file amended
FOCUS Report Part II instead of FOCUS Report Part II CSE. 79 Although amended FOCUS
Report Part II is modeled on FOCUS Report Part II CSE, the burden on ANC broker-dealer
SBSDs will increase, because ANC broker-dealer SBSDs will complete additional sections and
line items eliciting more detail about their SBS and swap activities. 80 In consideration of these
additional requirements, the Commission estimates that the requirement for ANC broker-dealer
SBSDs to file amended FOCUS Report Part II every month will impose an initial burden of 25
hours per firm in the first year and an ongoing annual burden of 228 hours per firm in each year
(including the first year). The Commission estimates that there will be 10 ANC broker-dealers
that will register as SBSDs adding to the industry an initial burden of 250 hours in the first year 81
and an ongoing burden of 2,280 hours per year (including the first year). 82 Over a three year

FCMs to file these 5 sections on a monthly basis (17 CFR 1.10(b)(i)), and therefore, the hourly burden is
already accounted for in the PRA estimate for the CFTC’s Rule 1.10 (1 CFR 1.10). In addition, the
Commission does not anticipate that FCMs will be required to file both the CFTC’s Form 1-FR-FCM and
the Commission’s amended FOCUS Report Part II.
75

35 hours x 1 broker-dealer MSBSP = 35 hours.

204 hours x 1 broker-dealer MSBSP = 204 hours.

(35 hours in first year + 204 hours in first year) + 204 hours in second year + 204 hours in third year = 647
hours.

647 hours / 3 years = 215.67 hours per year.

See paragraph (a)(1)(ii) of Rule 17a-5, as amended.

ANC broker-dealer SBSDs will be required to complete the following new sections: (1) Computation for
Determination of Security-Based Swap Customer Reserve Requirements; (2) Possession or Control for
Security-Based Swap Customers; (3) Schedule 1 – Aggregate Securities, Commodities, and Swaps
Positions; and (4) Schedule 4 – Geographic Distribution of Derivatives Exposures for Ten Largest
Countries.

25 hours x 10 ANC broker-dealer SBSDs = 250 hours.

228 hours x 10 ANC broker-dealer SBSDs = 2,280 hours.

period, the total industry burden is estimated to be 7,090 hours, 83 or about 2,363 hours per year
when annualized. 84
Amended FOCUS Report Part II for Stand-Alone Non-Model Broker-Dealers
Engaged in SBS Activities: Stand-alone non-model broker-dealers that engage in security-based
swap activities will be required to file FOCUS Report Part II, as amended, on a monthly basis
instead of the currently existing FOCUS Report Part II. Although stand-alone non-model
broker-dealers engaged in SBS activities will continue to file FOCUS Report Part II, the burden
on such firms will increase because FOCUS Report Part II is being amended so that these firms
are required to complete additional sections and line items eliciting more detail about their SBS
and swap activities. 85 In consideration of these additional requirements, the Commission
estimates that the requirement for stand-alone non-model broker-dealers engaged in securitybased swap activities to file amended FOCUS Report Part II will add an initial burden of 20
hours per firm and an ongoing annual burden of 120 hours per firm. The Commission estimates
that there are 25 stand-alone non-model broker-dealers engaged in security-based swap activities,
adding to the industry an initial burden of 500 hours 86 and an ongoing burden of 3,000 hours per
year. 87 Over a three year period, the total industry burden is estimated to be 9,500 hours, 88 or
about 3,167 hours per year when annualized. 89

(250 hours in first year + 2,280 hours in first year) + 2,280 hours in second year + 2,280 hours in third year
= 7,090 hours.

7,090 hours / 3 years = 2,363.33 hours per year.

Stand-alone non-model broker-dealers that engage in security-based swap activities will be required to
complete the following new sections: (1) Computation for Determination of PAB Requirements;
(2) Computation for Determination of Security-Based Swap Customer Reserve Requirements;
(3) Possession or Control for Security-Based Swap Customers; (4) Schedule 1 – Aggregate Securities,
Commodities, and Swaps Positions. In addition, non-model broker-dealer SBSDs also registered as FCMs
will be required to file the following sections not included on Pre-Amendment FOCUS Report Part II, but
which the CFTC already requires FCMs to file as part of Form 1-FR-FCM: (1) Computation of CFTC
Minimum Capital Requirement; (2) Statement of Segregation Requirements and Funds in Segregation for
Customers Trading on U.S. Commodity Exchanges; (3) Statement of Cleared Swaps Customer Segregation
Requirements and Funds in Cleared Swaps Customer Accounts under Section 4d(f) of the Commodity
Exchange Act; (4) Statement of Segregation Requirements and Funds in Segregation for Customers’ Dealer
Options Accounts; and (5) Statement of Secured Amounts and Funds Held in Separate Accounts for
Foreign Futures and Foreign Options Customers Pursuant to CFTC Regulation 30.7. The Commission
does not estimate a burden for these 5 sections from Form 1-FR-FCM, since the CFTC already requires
FCMs to file these 5 sections on a monthly basis (17 CFR 1.10(b)(i)), and therefore, the hourly burden is
already accounted for in the PRA estimate for the CFTC’s Rule 1.10 (1 CFR 1.10). In addition, the
Commission does not anticipate that FCMs will be required to file both the CFTC’s Form 1-FR-FCM and
the Commission’s amended FOCUS Report Part II, as amended.

20 hours x 25 stand-alone non-model broker-dealers engaged in security-based swap activities = 500 hours.

120 hours/year x 25 stand-alone non-model broker-dealers engaged in security-based swap activities =
3,000 hours/year.

(500 hours in first year + 3,000 hours in first year) + 3,000 hours in second year + 3,000 hours in third year
= 9,500 hours.

7,090 hours / 3 years = 2,363.33 hours per year.

below:

The burdens associated with the amendments to Rule 17a-5 are summarized in the table
Summary of Hourly Burdens
A.

Name of Information
Collection

Number
Initial
Annual
of
Burden per
Type of Burden
Responses per
Entities
Entity per
Entity
Impacted
Response

D.
Initial
Burden
Annualized
per Entity
per Response

Ongoing
Burden per
Entity per
Response

Annual
Burden Per
Entity per
Response

Total
Annual
Burden Per
Entity

Total Industry Burden

Small
Business
Entities
Affected

[ D + E]

[F * B]

[G * A]

[A * 0 %]

[C ÷ 3 years]

FOCUS Report Part II:
Non-Model BrokerDealer SBSDs

Reporting

4.17

1.39

20.00

21.39

256.67

1,540.00

FOCUS Report Part II:
Non-Model BrokerDealer MSBSPs

Reporting

2.92

0.97

17.00

17.97

215.67

236.33

2,363.33

126.67

3,166.67

FOCUS Report Part II:
ANC Broker-Dealer
Reporting
10
12
2.08
0.69
19.00
19.69
SBSDs
FOCUS Report Part II:
Non-Model StandReporting
25
12
1.67
0.56
10.00
10.56
alone Broker-Dealers
with SBS Activities
TOTAL HOURLY BURDEN FOR ALL RESPONDENTS FOR AMENDMNETS RELATED TO SECURITYBASED SWAP ACTIVITIES

7,285.67

When the estimated burden hours associated with the amendments to Rule 17a-5 (7,286)
are added to the previously approved burden hours (328,748), the revised hourly burdens
associated with Rule 17a-5 are estimated to be approximately 336,034.
13.

Costs to Respondents

The Commission estimates that Rule 17a-5 causes a broker-dealer to incur no initial
dollar cost, but causes an annual dollar cost to meet the reporting requirements. Those
requirements that are expected to impose an annual cost to the industry are discussed below.
ANC Supplemental Reports: Paragraph (k) of Rule 17a-5, imposes monthly, quarterly,
and annual reporting requirements on ANC broker-dealers. The Commission estimates that
postage costs to comply with paragraph (k) of Rule 17a-5, impose an annual cost of $8.50 per
ANC broker-dealer. 90 The Commission estimates that 10 firms will elect to be ANC brokerdealers, such that the estimated cost burden on the industry is $85 per year. 91
Annual Reports: The Commission estimates that postage costs to comply with
paragraph (d) of Rule 17a-5, impose on broker-dealers an annual dollar cost of $7.75 per firm. 92

($0.50 per filing x 12 monthly reports) + ($0.50 per filing x 4 quarterly reports) + ($0.50 per filing x 1
annual report) = $8.50 per year.

$8.50 per year x 10 ANC broker-dealers = $85 per year.

Currently, a priority mail flat rate envelope costs $7.75, based on costs obtained on the U.S. Postal Service
website, available at www.usps.gov.

The Commission estimates that there are 3,679 respondents, resulting in an estimated industrywide cost of approximately $28,512 per year. 93
Compliance Report: A broker-dealer that does not claim it was exempt from Rule
15c3-3 throughout the most recent fiscal year must file a compliance report with the Commission
on an annual basis. 94 As of June 30, 2016, there are approximately 175 carrying broker-dealers
that must comply with Rule 15c3-3 and therefore must file an annual compliance report. The
estimated cost associated with the independent public accountant’s examination of the
compliance report will be an average incremental cost of approximately $150,000 per carrying
broker-dealer per year. This result in an industry-wide annual ongoing reporting cost of
approximately $26,250,000 per year. 95
Exemption Report: A broker-dealer that claims it was exempt from Rule 15c3-3
throughout the most recent fiscal year must file an exemption report with the Commission on an
annual basis. 96 As of December 31, 2019, 3,689 broker-dealers filed FOCUS Reports with the
Commission. Of these, 3,001 broker-dealers claimed exemptions from Rule 15c3-3. The cost
associated with the independent public accountant’s review of the exemption report is estimated
to create an ongoing cost of $3,000 per non-carrying broker-dealer per year, for a total industrywide annual reporting cost of approximately $9,003,000. 97
SIPC Annual Reports: The Commission estimates that postage costs to comply with
paragraph (d)(6) of Rule 17a-5, impose an annual dollar cost of 50 cents per firm registered with
SIPC as a SIPC member broker-dealer. The Commission estimates that each year, 3,621 firms
will file a copy of the annual reports with SIPC, such that the estimated cost burden on the
industry is $1,810.50 per year. 98
Notice of Change of Fiscal Year End: The Commission estimates that postage costs to
comply with paragraph (d)(1)(ii) of Rule 17a-5, impose an annual dollar cost of 50 cents per firm
planning to change its fiscal year. The Commission estimates that each year, 75 firms will
change its fiscal year, such that the estimated cost burden on the industry is $37.50 per
year. 99
SIPC Annual General Assessment Reconciliation Report or Exclusion from
Membership Forms: The Commission estimates that postage costs to comply with paragraph
(e)(4) of Rule 17a-5, impose an annual dollar cost of 50 cents per firm. The Commission
estimates that each year, 3,689firms will file with SIPC a report on the SIPC annual general
93

$7.75 per firm x 3,679 broker-dealers = $28,512.25 per year.

See 17 CFR 240.17a-5(d)(1)(i)(B)(1).

$150,000 per year x 175 carrying broker-dealers = $26,250,000.

See 17 CFR 240.17a-5(d)(1)(i)(B)(2).

$3,000 per year x 3,001 non-carrying broker-dealers = $9,003,000.

$0.50 per year x 3,621 SIPC member broker-dealers = $1,810.50 per year.

$0.50 per year x 75 broker-dealers = $35.25 per year.

assessment reconciliation or exclusion from membership forms, such that the estimated cost
burden on the industry is $1,844.50 per year. 100
Statement Regarding Independent Public Accountant: The Commission estimates
that postage costs to comply with paragraphs (f)(2) and (f)(3) of Rule 17a-5, impose an annual
dollar cost of 50 cents per firm. The Commission estimates that there are 3,675 respondents,
resulting in an industry-wide cost of $1837.50 per year. 101
Total Industry Costs Burden: Therefore, the total industry-wide dollar cost burden
associated with Rule 17a-5 is estimated to be $35,287,127.25. 102
Summary of Dollar Costs
A.
Name of Information
Collection

Type of
Burden

Number
of
Entities
Impacted

Annual
Responses
per Entity

Initial
Cost per
Entity
per
Response

Initial Cost
Annualized
per Entity
per
Response

Ongoing
Cost per
Entity per
Response

Annual
Cost Per
Entity per
Response

Total
Annual
Cost Per
Entity

Total Industry Cost

[ D + E]

[F * B]

[G * A]

[C ÷ 3
years]

Small
Business
Entities
Affected

ANC Supplemental
Monthly Reports

Reporting

$0.50

$6.00

$60.00

ANC Supplemental
Quarterly Reports

Reporting

$0.50

$2.00

$20.00

ANC Supplemental
Annual Reports

Reporting

$0.50

Annual Report

Reporting

3,689

$7.75

$28,512.25

895

Rule 17a-5(d)(3):
Compliance Report

Reporting

175

$150,000.00

$26,250,000

Rule 17a-5(d)(4):
Exemption Report

Reporting

3,001

$3,000.00

$9,003,000

895

SIPC Annual Report

Third-Party
Disclosure

3,621

$0.50

$1,810.50

895

Reporting

$0.50

$37.50

Third-Party
Disclosure

3,689

$0.50

$1,844.50

895

Reporting

3,675

$0.50

$1,837.5

155

Notice of Change in
Fiscal Year
SIPC Annual General
Assessment
Reconciliation Report
or Exclusion from
Membership Forms
Statement Regarding
Independent Public
Accountant

TOTAL COST FOR ALL RESPONDENTS

14.

$35,287,127.25

Costs to Federal Government

Rule 17a-5, is not expected to result in costs to the federal government due to contracting,
information technology, development, hiring one or more new employees, or reallocating
existing employees.

100

$0.50 per year x 3,629 broker-dealers = $1,844.50 per year.

101

$0.50 per firm x 3,675 broker-dealers = $1837.50 per year.

102

$85 + $28,512.25 + $26,250,000 + $9,003,000 + $1,810.50 + $37.50 + $1,844.50 + $1,837.50 =
$35,287,127.25.

15.

Changes in Burden

As noted above, the Commission amended Rule 17a-5 in September 2019 in order to
account for the security-based swap activities of broker-dealers, including broker-dealer securitybased swap dealers, and broker-dealer major security-based swap participants. Consequently, by
adding provisions to Rule 17a-5 to account for the security-based swap activities of these
entities, the burden hours increased by approximately 7,286, hours, resulting in a total hourly
burden of 336,034 hours.
The estimated burdens associated with the amendments to Rule 17a-5 changed in certain
respects from the originally proposed burdens. The changes in the estimated burden hours from
the proposing stage to the adopting stage are detailed in the table below.
Summary of Changes in Burden Hours

Name of
Information
Collection

Estimated
Annual
Industry
Burden
Adopted

Estimated Annual
Industry Burden
Proposed

Change in
Burden

Reason for Change in Burden

Liquidity Stress
Test for ANC
Broker-Dealers

120

(120)

The estimated burden hours have been reduced because the estimated burdens relate
to a provision that was proposed but that was not adopted. As a result, the estimated
burdens are no longer applicable.

(7.66)

This burden was previously labeled as “Form SBS for Broker-Dealer MSBSPs
Amendment to Paragraph (a)(1)(iv).” The burden has changed to reflect that the
Commission did not adopt Form SBS as proposed and instead adopted amendments
to FOCUS Report Part II, which broker-dealer MSBSPs will be required to file.
The Commission also revised the burden estimates down, after additional
consideration, from 40 hours and 210 hours for the initial and ongoing burdens,
respectively, to 35 hours and 204 hours for the initial and ongoing estimated
burdens, respectively.

3,166.67

The Commission did not adopt Form SBS as proposed. Form SBS would have been
required to be filed by security-based swap entities rather than FOCUS Report Part
II or Part IIA, which is required to be filed by broker-dealers. Instead, the
Commission adopted a requirement for all non-bank security-based swap dealers
and major-security-based swap participants file existing FOCUS Report Part II, and
made certain amendments to the FOCUS Report Part II to account for the
derivatives activities of these entities. As a result, the Commission revised its
estimated burdens to account for broker-dealers engaged in security-based swap
activities providing additional information on FOCUS Report Part II related to their
security-based swap activities.

FOCUS Report
Part II: NonModel BrokerDealer MSBSPs

FOCUS Report
Part II: NonModel Standalone BrokerDealers with
SBS Activities

215.67

3,166.67

223.33

As noted above, the total change in the estimated burden hours associated with the to
Rule 17a-5 is an increase of 7,286 to the previously approved burden hours of 328,748, for a
revised total hourly burden for Rule 17a-5 of approximately 336,034. This change is
summarized in the table below:
Summary of Changes in Burden Hours

Rule

Total
Estimated
Annual
Industry
Burden
Associated
with

Annual Industry
Burden Currently
Approved

Change in
Burden

Reason for Change in Burden

Amendments
to Rule 17aRule 17a-5

336.034

328,748

7,286

The estimated burden hours have increased as a result of amendments to Rule 17a5.

There is no change in the cost burdens associated with the amendments to Rule 17a-5.
16.

Information Collection Planned for Statistical Purposes

Not applicable. The information collection is not used for statistical purposes.
17.

Approval to Omit OMB Expiration Date

We request authorization to omit the expiration date on the electronic version of the form.
Including the expiration date on the electronic version of the form will result in increased costs,
because the need to make changes to the form may not follow the application’s scheduled
version release dates. The OMB control number will be displayed.
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.

File Type	application/pdf
File Modified	2021-07-29
File Created	2021-07-29