Order Providing Broker-Dealers a Temporary Exemption From the Requirements of Certain New Amendments to the Financial Responsibility Rules for Broker-Dealers Under the Securities Exchange Act of 1934, 62930-62931 [2013-24609]
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Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NYSEMKT–2013–79. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Section, 100 F Street NE.,
Washington, DC 20549–1090. Copies of
the filing will also be available for
inspection and copying at the NYSE’s
principal office and on its Internet Web
site at www.nyse.com. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEMKT–2013–79 and should be
submitted on or before November 12,
2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–24648 Filed 10–21–13; 8:45 am]
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BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70701]
Order Providing Broker-Dealers a
Temporary Exemption From the
Requirements of Certain New
Amendments to the Financial
Responsibility Rules for BrokerDealers Under the Securities Exchange
Act of 1934
October 17, 2013.
I. Background
On July 30, 2013, the Securities and
Exchange Commission (‘‘Commission’’)
voted to adopt amendments to the
broker-dealer net capital rule (Rule
15c3–1),1 customer protection rule (Rule
15c3–3),2 books and records rules (Rules
17a–3 and 17a–4),3 and notification rule
(Rule 17a–11) 4 promulgated under the
Securities Exchange Act of 1934
(‘‘Exchange Act’’). The amendments are
designed to address several areas of
concern regarding the financial
responsibility requirements for brokerdealers. The adopting release provided
that the amendments are effective on
October 21, 2013.5
Industry representatives have
indicated through physical and
telephonic meetings with Commission
staff that, as broker-dealers have worked
to meet the October 21, 2013 effective
date, some have determined that they
will be unable to complete by that date
the significant operational and systems
changes necessary to comply with
certain of the final rule amendments.
For example, broker-dealers that
maintain custody of customer securities
and cash (a ‘‘carrying broker-dealer’’)
have said they are unable to comply
with the requirements of paragraph
(e)(5) of Rule 15c3–3 by the current
effective date. This provision places
restrictions on a carrying broker-dealer’s
ability to use cash bank deposits to meet
customer or PAB reserve deposit
requirements by excluding cash
deposits held at an affiliated bank and
limiting cash held at non-affiliated
banks to an amount no greater than 15%
of the bank’s equity capital, as reported
by the bank in its most recent Call
Report.6 These carrying broker-dealers
1 17
CFR 240.15c3–1.
CFR 240.15c3–3.
3 17 CFR 240.17a 3 and 17a 4.
4 17 CFR 240.17a 11. Financial Responsibility
Rules for Broker-Dealers, Exchange Act Release No.
70072 (July 30, 2013), 78 FR 51824 (Aug. 21, 2013).
5 Financial Responsibility Rules for BrokerDealers, Exchange Act Release No. 70072 (July 30,
2013), 78 FR 51824 (Aug. 21, 2013).
6 See paragraph (e)(5) of Rule 15c3–3, as adopted.
See also Financial Responsibility Rules for Broker2 17
14 17
CFR 200.30–3(a)(12).
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21:08 Oct 21, 2013
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Frm 00348
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Sfmt 4703
indicated that it would be a challenge to
open new reserve accounts and make
the appropriate systems changes by
October 21, 2013 because, in part,
negotiating new reserve account deposit
agreements and obtaining
acknowledgement letters required by
paragraph (f) of Rule 15c3–3 from new
banks generally take significantly more
time than the 60 days afforded under
the final rule amendments.
Further, broker-dealers have indicated
that 60 days is insufficient for
implementing the system changes
necessary for the customer account
opening documentation and processes,
as well as account notices and
disclosures, required in connection with
new requirements under paragraph (j)(2)
to Rule 15c3–3 regarding the treatment
of customers’ free credit balances.
Additionally, broker-dealer
representatives have indicated that
some broker-dealers may need
additional time to completely and
accurately document their market,
credit, and liquidity risk management
controls under new paragraph (a)(23) to
Rule 17a–3.7
Therefore, the Commission has
determined to provide a temporary
exemption to broker-dealers from the
requirements of the following new
amendments to the broker-dealer
financial responsibility rules adopted in
Exchange Act Release No. 70072: (1)
Rule 15c3–3, except paragraph (j)(1); 8
(2) Rule 15c3–3a; (3) Rule 17a–3; (4)
Rule 17a–4; and (5) paragraph
(c)(2)(iv)(E)(2) of Rule 15c3–1.9 The
Dealers, 78 FR at 51904. The final rules define the
term PAB account to mean a proprietary securities
account of a broker or dealer (which includes a
foreign broker or dealer, or a foreign bank acting as
a broker or dealer) other than a delivery-versuspayment account or a receipt-versus-payment
account. The term does not include an account that
has been subordinated to the claims of creditors of
the carrying broker or dealer. See paragraph (a)(16)
of Rule 15c3–3, as adopted. See also Financial
Responsibility Rules for Broker-Dealers, 78 FR at
51903.
7 See paragraph (a)(23) of Rule 17a–3, as adopted
and paragraph (e)(9) of Rule 17a–4, as adopted. See
also Financial Responsibility Rules for BrokerDealers, 78 FR at 51907.
8 As adopted paragraph (j)(1) of Rule 15c3–3
incorporates certain requirements from Rule 15c3–
2 (customers’ free credit balances), including the
requirement that broker-dealers inform customers of
the amounts due to them and that such amounts are
payable on demand. Rule 15c3–2 is being
eliminated as a separate rule because it is largely
irrelevant in light of the requirements in Rule 15c3–
3. See paragraph (j)(1) of Rule 15c3–3, as adopted.
See also Financial Responsibility Rules for BrokerDealers, 78 FR at 51836–51837.
9 As adopted paragraph (c)(2)(iv)(E)(2) of Rule
15c3–1 provides that a broker-dealer need not
deduct cash and securities held in a securities
account at a carrying broker-dealer except where
the account has been subordinated to the claims of
creditors of the carrying broker-dealer. See
paragraph (c)(2)(iv)(E)(2) of Rule 15c3–1, as
E:\FR\FM\22OCN1.SGM
22OCN1
Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
temporary exemption will sunset on
March 3, 2014. This will facilitate an
orderly transition to the new
requirements by providing brokerdealers with more time to make any
necessary operational or systems
changes. For example, industry
representatives have indicated that
many firms initiate freezes around the
year end with respect to changing
systems and codes. As a result of this
temporary exemption, the Commission
is directing the staff to delay from
October 21, 2013 to March 3, 2014 the
date for the withdrawal of the November
8, 1998 staff no-action letter that
addresses the net capital treatment of
proprietary accounts of introducing
broker-dealers.10
The Commission is not granting a
temporary exemption from the
remaining new requirements adopted in
Exchange Act Release No. 70072: (1)
The requirement in paragraph (j)(1) of
Rule 15c3–3; (2) the new requirements
in Rule 15c3–1 (other than the
requirement in paragraph (c)(2)(iv)(E)(2)
of Rule 15c3–1); (3) and the new
requirements in Rule 17a–11. Brokerdealers have not identified these
requirements as presenting a challenge
in terms of achieving compliance by
October 21, 2013. In addition, this
temporary exemption does not apply to
any other requirements in Rule 15c3–3,
Rule 15c3–3a, Rule 17a–3, Rule 17a–4,
or Rule 15c3–1.
The effective date is quickly
approaching, and granting a limited
exemption until March 3, 2014 to
broker-dealers from certain new
requirements will help to facilitate an
orderly implementation of the final rule
amendments.
For the foregoing reasons, the
Commission finds that this temporary
exemption is necessary and appropriate
in the public interest, and is consistent
with the protection of investors.11
It is hereby ordered that brokerdealers are temporarily exempt until
March 3, 2014 from the requirements of
the following new amendments to the
broker-dealer financial responsibility
rules adopted in Exchange Act Release
No. 70072: (1) Rule 15c3–3, except
paragraph (j)(1); (2) Rule 15c3–3a; (3)
Rule 17a–3; (4) Rule 17a–4; and (5)
paragraph (c)(2)(iv)(E)(2) of Rule 15c3–
1.
II. Conclusion
Accordingly, pursuant to Section 36
of the Exchange Act,
Editorial Note: This document was
received by the Office of the Federal Register
on October 17, 2013.
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013–24609 Filed 10–21–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[File No. 500–1]
China Ritar Power Corp., Order of
Suspension of Trading
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Clean Water Technologies, Inc.
(‘‘PCWT’’) because of questions
regarding the adequacy and accuracy of
publicly disseminated information
concerning, among other things, the
company’s business operations. PCWT
is a Delaware corporation based in
Irvine, California. It is quoted on OTC
Link under the symbol PCWT.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
company.
Therefore, it is ordered, pursuant to
Section 12(k) of the Securities Exchange
Act of 1934, that trading in the
securities of the above-listed company is
suspended for the period from 5:30 p.m.
EDT on October 11, 2013 through 11:59
p.m. EDT, on October 24, 2013.
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013–24610 Filed 10–21–13; 8:45 am]
October 4, 2013.
BILLING CODE 8011–01–P
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of China Ritar
Power Corp. because China Ritar Power
Corp. has not filed any periodic reports
for any reporting period subsequent to
the period ended September 30, 2010.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in securities of China Ritar Power Corp.
Therefore, it is ordered, pursuant to
Section 12(k) of the Securities Exchange
Act of 1934, that trading in the
securities of China Ritar Power Corp. is
suspended for the period from 9:30 a.m.
EDT, October 4, 2013, through 11:59
p.m. EDT, on October 17, 2013.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2013–24605 Filed 10–21–13; 8:45 am]
adopted. See also Financial Responsibility Rules for
Broker-Dealers, 78 FR at 51831–51832.
10 See Letter of Michael A. Macchiaroli, Associate
Director, Division of Market Regulation,
Commission, to Raymond J. Hennessy, Vice
President, NYSE, and Thomas Cassella, Vice
President, NASD Regulation, Inc. (Nov. 3, 1998).
See also Financial Responsibility Rules for BrokerDealers, 78 FR at 51828 (directing the staff to
withdraw the no-action letter as of the effective date
of the amendments).
11 Section 36 of the Exchange Act authorizes the
Commission, by rule, regulation, or order, to
conditionally or unconditionally exempt any
person from any rule under the Exchange Act, to
the extent that the exemption is necessary or
appropriate in the public interest and is consistent
with the protection of investors. 15 U.S.C. 78mm.
62931
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[File No. 500–1]
Pacific Clean Water Technologies, Inc.;
Order of Suspension of Trading
October 11, 2013.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Pacific
PO 00000
Frm 00349
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Sfmt 4703
SMALL BUSINESS ADMINISTRATION
[License No. 09/79–0454]
Emergence Capital Partners SBIC,
L.P.; Notice Seeking Exemption Under
Section 312 of the Small Business
Investment Act, Conflicts of Interest
Notice is hereby given that Emergence
Capital Partners SBIC, L.P., 160 Bovet
Road, Suite 300, San Mateo, CA 94402,
a Federal Licensee under the Small
Business Investment Act of 1958, as
amended (‘‘the Act’’), in connection
with the financing of a small concern,
has sought an exemption under Section
312 of the Act and Section 107.730,
Financings which Constitute Conflicts
of Interest of the Small Business
Administration (‘‘SBA’’) Rules and
Regulations (13 CFR 107.730).
Emergence Capital Partners SBIC, L.P.
proposes to provide equity security
financing to Bill.com, Inc., 3250 Ash
Street, Palo Alto, CA 94306.
The financing is brought within the
purview of § 107.730(a)(1) of the
Regulations because the financing of
Bill.com, Inc. by Emergence Capital
Partners, Inc. will not occur at the same
time, and on the same terms and
conditions of the financing by
Emergence Capital Partners, L.P. and
Emergence Capital Associates, L.P., both
Associates of Emergence Capital
Partners SBIC, L.P., and therefore this
transaction is considered a financing of
an Associate requiring prior SBA
approval.
E:\FR\FM\22OCN1.SGM
22OCN1
]]>Agencies
[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62930-62931]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24609]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70701]
Order Providing Broker-Dealers a Temporary Exemption From the
Requirements of Certain New Amendments to the Financial Responsibility
Rules for Broker-Dealers Under the Securities Exchange Act of 1934
October 17, 2013.
I. Background
On July 30, 2013, the Securities and Exchange Commission
(``Commission'') voted to adopt amendments to the broker-dealer net
capital rule (Rule 15c3-1),\1\ customer protection rule (Rule 15c3-
3),\2\ books and records rules (Rules 17a-3 and 17a-4),\3\ and
notification rule (Rule 17a-11) \4\ promulgated under the Securities
Exchange Act of 1934 (``Exchange Act''). The amendments are designed to
address several areas of concern regarding the financial responsibility
requirements for broker-dealers. The adopting release provided that the
amendments are effective on October 21, 2013.\5\
---------------------------------------------------------------------------
\1\ 17 CFR 240.15c3-1.
\2\ 17 CFR 240.15c3-3.
\3\ 17 CFR 240.17a 3 and 17a 4.
\4\ 17 CFR 240.17a 11. Financial Responsibility Rules for
Broker-Dealers, Exchange Act Release No. 70072 (July 30, 2013), 78
FR 51824 (Aug. 21, 2013).
\5\ Financial Responsibility Rules for Broker-Dealers, Exchange
Act Release No. 70072 (July 30, 2013), 78 FR 51824 (Aug. 21, 2013).
---------------------------------------------------------------------------
Industry representatives have indicated through physical and
telephonic meetings with Commission staff that, as broker-dealers have
worked to meet the October 21, 2013 effective date, some have
determined that they will be unable to complete by that date the
significant operational and systems changes necessary to comply with
certain of the final rule amendments. For example, broker-dealers that
maintain custody of customer securities and cash (a ``carrying broker-
dealer'') have said they are unable to comply with the requirements of
paragraph (e)(5) of Rule 15c3-3 by the current effective date. This
provision places restrictions on a carrying broker-dealer's ability to
use cash bank deposits to meet customer or PAB reserve deposit
requirements by excluding cash deposits held at an affiliated bank and
limiting cash held at non-affiliated banks to an amount no greater than
15% of the bank's equity capital, as reported by the bank in its most
recent Call Report.\6\ These carrying broker-dealers indicated that it
would be a challenge to open new reserve accounts and make the
appropriate systems changes by October 21, 2013 because, in part,
negotiating new reserve account deposit agreements and obtaining
acknowledgement letters required by paragraph (f) of Rule 15c3-3 from
new banks generally take significantly more time than the 60 days
afforded under the final rule amendments.
---------------------------------------------------------------------------
\6\ See paragraph (e)(5) of Rule 15c3-3, as adopted. See also
Financial Responsibility Rules for Broker-Dealers, 78 FR at 51904.
The final rules define the term PAB account to mean a proprietary
securities account of a broker or dealer (which includes a foreign
broker or dealer, or a foreign bank acting as a broker or dealer)
other than a delivery-versus-payment account or a receipt-versus-
payment account. The term does not include an account that has been
subordinated to the claims of creditors of the carrying broker or
dealer. See paragraph (a)(16) of Rule 15c3-3, as adopted. See also
Financial Responsibility Rules for Broker-Dealers, 78 FR at 51903.
---------------------------------------------------------------------------
Further, broker-dealers have indicated that 60 days is insufficient
for implementing the system changes necessary for the customer account
opening documentation and processes, as well as account notices and
disclosures, required in connection with new requirements under
paragraph (j)(2) to Rule 15c3-3 regarding the treatment of customers'
free credit balances. Additionally, broker-dealer representatives have
indicated that some broker-dealers may need additional time to
completely and accurately document their market, credit, and liquidity
risk management controls under new paragraph (a)(23) to Rule 17a-3.\7\
---------------------------------------------------------------------------
\7\ See paragraph (a)(23) of Rule 17a-3, as adopted and
paragraph (e)(9) of Rule 17a-4, as adopted. See also Financial
Responsibility Rules for Broker-Dealers, 78 FR at 51907.
---------------------------------------------------------------------------
Therefore, the Commission has determined to provide a temporary
exemption to broker-dealers from the requirements of the following new
amendments to the broker-dealer financial responsibility rules adopted
in Exchange Act Release No. 70072: (1) Rule 15c3-3, except paragraph
(j)(1); \8\ (2) Rule 15c3-3a; (3) Rule 17a-3; (4) Rule 17a-4; and (5)
paragraph (c)(2)(iv)(E)(2) of Rule 15c3-1.\9\ The
[[Page 62931]]
temporary exemption will sunset on March 3, 2014. This will facilitate
an orderly transition to the new requirements by providing broker-
dealers with more time to make any necessary operational or systems
changes. For example, industry representatives have indicated that many
firms initiate freezes around the year end with respect to changing
systems and codes. As a result of this temporary exemption, the
Commission is directing the staff to delay from October 21, 2013 to
March 3, 2014 the date for the withdrawal of the November 8, 1998 staff
no-action letter that addresses the net capital treatment of
proprietary accounts of introducing broker-dealers.\10\
---------------------------------------------------------------------------
\8\ As adopted paragraph (j)(1) of Rule 15c3-3 incorporates
certain requirements from Rule 15c3-2 (customers' free credit
balances), including the requirement that broker-dealers inform
customers of the amounts due to them and that such amounts are
payable on demand. Rule 15c3-2 is being eliminated as a separate
rule because it is largely irrelevant in light of the requirements
in Rule 15c3-3. See paragraph (j)(1) of Rule 15c3-3, as adopted. See
also Financial Responsibility Rules for Broker-Dealers, 78 FR at
51836-51837.
\9\ As adopted paragraph (c)(2)(iv)(E)(2) of Rule 15c3-1
provides that a broker-dealer need not deduct cash and securities
held in a securities account at a carrying broker-dealer except
where the account has been subordinated to the claims of creditors
of the carrying broker-dealer. See paragraph (c)(2)(iv)(E)(2) of
Rule 15c3-1, as adopted. See also Financial Responsibility Rules for
Broker-Dealers, 78 FR at 51831-51832.
\10\ See Letter of Michael A. Macchiaroli, Associate Director,
Division of Market Regulation, Commission, to Raymond J. Hennessy,
Vice President, NYSE, and Thomas Cassella, Vice President, NASD
Regulation, Inc. (Nov. 3, 1998). See also Financial Responsibility
Rules for Broker-Dealers, 78 FR at 51828 (directing the staff to
withdraw the no-action letter as of the effective date of the
amendments).
---------------------------------------------------------------------------
The Commission is not granting a temporary exemption from the
remaining new requirements adopted in Exchange Act Release No. 70072:
(1) The requirement in paragraph (j)(1) of Rule 15c3-3; (2) the new
requirements in Rule 15c3-1 (other than the requirement in paragraph
(c)(2)(iv)(E)(2) of Rule 15c3-1); (3) and the new requirements in Rule
17a-11. Broker-dealers have not identified these requirements as
presenting a challenge in terms of achieving compliance by October 21,
2013. In addition, this temporary exemption does not apply to any other
requirements in Rule 15c3-3, Rule 15c3-3a, Rule 17a-3, Rule 17a-4, or
Rule 15c3-1.
The effective date is quickly approaching, and granting a limited
exemption until March 3, 2014 to broker-dealers from certain new
requirements will help to facilitate an orderly implementation of the
final rule amendments.
For the foregoing reasons, the Commission finds that this temporary
exemption is necessary and appropriate in the public interest, and is
consistent with the protection of investors.\11\
---------------------------------------------------------------------------
\11\ Section 36 of the Exchange Act authorizes the Commission,
by rule, regulation, or order, to conditionally or unconditionally
exempt any person from any rule under the Exchange Act, to the
extent that the exemption is necessary or appropriate in the public
interest and is consistent with the protection of investors. 15
U.S.C. 78mm.
---------------------------------------------------------------------------
II. Conclusion
Accordingly, pursuant to Section 36 of the Exchange Act,
It is hereby ordered that broker-dealers are temporarily exempt
until March 3, 2014 from the requirements of the following new
amendments to the broker-dealer financial responsibility rules adopted
in Exchange Act Release No. 70072: (1) Rule 15c3-3, except paragraph
(j)(1); (2) Rule 15c3-3a; (3) Rule 17a-3; (4) Rule 17a-4; and (5)
paragraph (c)(2)(iv)(E)(2) of Rule 15c3-1.
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-24609 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P
