Proposed Collection; Comment Request: Rule 15c6-2, 47526-47528 [2023-15573]
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Federal Register / Vol. 88, No. 140 / Monday, July 24, 2023 / Notices
Competitive Product List in the Mail
Classification Schedule.
DATES: Date of notice: July 24, 2023.
FOR FURTHER INFORMATION CONTACT:
Christopher C. Meyerson, (202) 268–
7820.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on July 18, 2023,
it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail Express International,
Priority Mail International & First-Class
Package International Service Contract
22 to Competitive Product List.
Documents are available at
www.prc.gov, Docket Nos. MC2023–187
and CP2023–191.
[FR Doc. 2023–15571 Filed 7–21–23; 8:45 am]
BILLING CODE 7710–12–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
Notice is hereby given,
pursuant to the provisions of the
Government in the Sunshine Act, Public
Law 94–409, that the Securities and
Exchange Commission will hold an
Open Meeting on Wednesday, July 26,
2023 at 10:00 a.m.
PLACE: The meeting will be webcast on
the Commission’s website at
www.sec.gov.
STATUS: This meeting will begin at 10:00
a.m. (ET) and will be open to the public
via webcast on the Commission’s
website at www.sec.gov.
MATTERS TO BE CONSIDERED:
1. The Commission will consider
whether to adopt rules to enhance and
standardize disclosures regarding
cybersecurity risk management, strategy,
governance, and incidents by public
companies that are subject to the
reporting requirements of the Securities
Exchange Act of 1934.
2. The Commission will consider
whether to propose new and amended
rules under the Securities Exchange Act
of 1934 and the Investment Advisers
Act of 1940 relating to conflicts of
interest associated with broker-dealers’
and investment advisers’ use of
predictive data analytics in connection
with certain investor interactions.
3. The Commission will consider
whether to propose amendments to the
exemption for internet advisers from the
prohibition against registration under
the Investment Advisers Act of 1940.
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For further information and to ascertain
what, if any, matters have been added,
deleted or postponed, please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Authority: 5 U.S.C. 552b.
Dated: July 19, 2023.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023–15664 Filed 7–20–23; 11:15 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–XXX, OMB Control No.
3235–XXXX]
Proposed Collection; Comment
Request: Rule 15c6–2
Tram T. Pham,
Attorney, Ethics and Legal Compliance.
TIME AND DATE:
CONTACT PERSON FOR MORE INFORMATION:
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’’) is soliciting comments
on the collection of information
provided for in Rule 15c6–2 (17 CFR.
240.15c6–2) under the Securities
Exchange Act of 1934 (‘‘Exchange Act’’)
(15 U.S.C. 78a et seq.). The Commission
will submit the collection of
information to the Office of
Management and Budget (‘‘OMB’’) for
approval. The title of the information
collection is ‘‘Rule 15c6–2.’’ 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.
Rule 15c6–2 was adopted as part of
the final rules to shorten the standard
settlement cycle for securities
transactions from two business days
after the transaction date to one
business day following the transaction
date. The compliance date for adopted
Rule 15c6–2 is May 28, 2024. Certain
provisions of Rule 15c6–2 contain
‘‘collection of information’’
requirements within the meaning of the
PRA.1 The requirements for this
collection of information is mandatory
for any broker or dealer (‘‘brokerdealer’’) engaging in the allocation,
confirmation, or affirmation process
with another party or parties to achieve
settlement of a securities transaction
that is subject to the requirements of
PO 00000
1 See
44 U.S.C. 3501 et seq.
Frm 00054
Fmt 4703
Sfmt 4703
§ 240.15c6–1(a) to either enter into
written agreements as specified in the
rule or establish, maintain, and enforce
written policies and procedures
reasonably designed to address certain
objectives related to completing
allocations, confirmations, and
affirmations as soon as technologically
practicable and no later than the end of
trade date.2
Specifically, for a broker-dealer that
determines to establish, maintain, and
enforce written policies and procedures
pursuant to Rule 15c6–2(a), Rule 15c6–
2(b) requires that such policies and
procedures must be reasonably designed
to (1) identify and describe any
technology systems, operations, and
processes that the broker-dealer uses to
coordinate with other relevant parties,
including investment advisers and
custodians, to ensure completion of the
allocation, confirmation, or affirmation
process for the transaction; (2) set target
time frames on trade date for completing
the allocation, confirmation, and
affirmation for the transaction; (3)
describe the procedures that the brokerdealer will follow to ensure the prompt
communication of trade information,
investigate any discrepancies in trade
information, and adjust trade
information to help ensure that the
allocation, confirmation, and
affirmation can be completed by the
target time frames on trade date; (4)
describe how the broker-dealer plans to
identify and address delays if another
party, including an investment adviser
or a custodian, is not promptly
completing the allocation or affirmation
for the transaction, or if the brokerdealer experiences delays in promptly
completing the confirmation; and (5)
measure, monitor, and document the
rates of allocations, confirmations, and
affirmations completed as soon as
technologically practicable and no later
than the end of the day on trade date.
The purpose of the collection under
Rule 15c6–2 is to ensure that parties to
institutional transactions—that is,
transactions where a broker-dealer or its
customer must engage with agents of the
customer, including the customer’s
investment adviser or its securities
custodian, to prepare a transaction for
settlement—can ensure the completion
of the allocation, confirmation, and
affirmation process as soon as
technologically practicable and no later
than the end of the day on trade date.
2 See 17 CFR 240.15c6–2; Exchange Act Release
No. 96930 (Feb. 15, 2023) 88 FR 13872 (Mar. 6,
2023) (‘‘Rule 15c6–2 Adopting Release’’); see also
Exchange Act Release No. 94196 (Feb. 9, 2022), 87
FR 10436 (Feb. 24, 2022) (‘‘Rule 15c6–2 Proposing
Release’’).
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Federal Register / Vol. 88, No. 140 / Monday, July 24, 2023 / Notices
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The respondents to the collection of
information are broker-dealers that are
parties to institutional trades. As of
December 31, 2021, 3,508 broker-dealers
were registered with the Commission.3
Of those, approximately 143 brokerdealers are participants of the
Depository Trust Company (‘‘DTC’’),4 a
clearing agency registered with the
Commission that provides central
securities depository services for
transactions in U.S. equity securities.
Participants in DTC can facilitate the
settlement of securities transactions on
behalf of their customers. For example,
broker-dealers that participate in DTC
are often referred to as ‘‘clearing
brokers’’ within the securities industry.
In addition to broker-dealers, DTC
participants include bank custodians
that may also hold securities on behalf
of institutional customers. Among other
things, DTC facilitates the settlement of
securities transactions using the
delivery-versus-payment (‘‘DVP’’) and
receipt-versus-payment (‘‘RVP’’)
methods, both of which are commonly
used by buyers and sellers to settle an
institutional transaction once the parties
have completed the allocation,
confirmation, and affirmation process.
Because DTC is the only clearing agency
that provides central securities
depository services for U.S. equities, the
Commission believes that the set of
participants at DTC that are brokerdealers are a useful, if partial, estimate
of broker-dealers that participate in the
allocation, confirmation, and
affirmation process and therefore of
broker-dealers that would be subject to
the requirements of Rule 15c6–2.
In addition, other broker-dealers may
participate in the allocation,
confirmation, and affirmation process
but, because they do not maintain status
as a participant in DTC, rely on
commercial relationships with DTC
participants (i.e., clearing brokers) to
facilitate final settlement of their
institutional transactions. Using annual
statistics compiled by the Financial
Industry Regulatory Authority
(‘‘FINRA’’), the Commission estimates
that approximately 268 additional
broker-dealers may serve institutional
customers.5 Accordingly, the
Commission estimates that
3 This estimate is derived from FOCUS Report
data as of December 31, 2021.
4 See DTCC, DTC Member Directories, https://
www.dtcc.com/client-center/dtc-directories (last
updated July 1, 2023).
5 Specifically, statistics compiled by FINRA
suggest that approximately 256 small firms and 12
medium-sized firms in the ‘‘Trading and
Execution’’ category perform ‘‘Institutional
Brokerage.’’ FINRA, 2022 FINRA Industry Snapshot
33, 34 (2022), https://www.finra.org/sites/default/
files/2022-03/2022-industry-snapshot.pdf.
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Jkt 259001
approximately 411 broker-dealers would
be subject to the requirements of Rule
15c6–2.
Rule 15c6–2 will impose both initial
and ongoing burdens. The extent to
which a respondent will incur a burden
to comply with the collection of
information under Rule 15c6–2 will
depend on the extent to which the
broker-dealer determines that its
policies and procedures, as opposed to
its written agreements, will be used to
comply with the rule and how any
existing policies and procedures for
ensuring timely settlement would need
to be modified to address same-day
affirmation. As a general matter, most
broker-dealers maintain policies and
procedures to ensure the timely
settlement of their transactions, and the
securities industry considers achieving
‘‘same-day affirmation’’ an industry best
practice. Nonetheless, the Commission
believes that respondent broker-dealers
will need to evaluate existing policies
and procedures, identify any gaps, and
then update their policies and
procedures to address any gaps
identified. Accordingly, the
Commission estimates that respondent
broker-dealers would incur an aggregate
one-time burden of approximately 240
hours 6 to create policies and procedures
required under the rule, and that the
internal cost (or monetized value of the
hour burden) of this one-time burden
per broker-dealer would be $88,880.7
Rule 15c6–2 also imposes ongoing
burdens on a respondent broker-dealer
as follows: (i) ongoing monitoring and
compliance activities with respect to the
written policies and procedures
required by the proposed rule; and (ii)
ongoing documentation activities with
respect to its obligations to measure,
monitor, and document the rates of
allocations, confirmations, and
affirmations completed as soon as
technologically practicable and no later
than the end of the day on trade date.
The Commission estimates that the
ongoing activities required by Rule
15c6–2 would impose an aggregate
annual burden on a respondent brokerdealer of 480 hours,8 and an internal
6 This figure was calculated as follows: (Assistant
General Counsel for 20 hours + Compliance
Attorney for 120 hours + Senior Risk Management
Specialist for 20 hours + Risk Management
Specialist for 80 hours) = 240 hours × 411
respondents = 98,640 hours.
7 This figure was calculated as follows: (Assistant
General Counsel at $543/hour × 20 hours = $10,860)
+ (Compliance Attorney at $426/hour × 120 hours
= $51,120) + (Senior Risk Management Specialist at
$417/hour × 20 hours = $8,340) + (Risk
Management Specialist at $232/hour × 80 hours =
$18,560) = $88,880 × 411 respondents =
$36,529,680.
8 This figure was calculated as follows: (Assistant
General Counsel for 48 hours + Compliance
PO 00000
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47527
cost (or monetized value of the hour
burden) per broker-dealer of $172,416.9
The total industry internal cost is
estimated to be approximately $107M.10
Rule 15c6–2 imposes a recordkeeping
requirement on broker-dealers to
maintain policies and procedures
consistent with the rule. Where the
Commission requests that a brokerdealer produce records retained
pursuant to the requirements of Rule
15c6–2, a broker-dealer can request
confidential treatment of the
information. If such confidential
treatment request is made, the
Commission anticipates that it will keep
the information confidential subject to
applicable law.
Pursuant to Exchange Act Rule 17a–
4(b)(7), a broker or dealer registered
pursuant to section 15 of the Exchange
Act must preserve for a period of not
less than three years, the first two years
in an easily accessible place, all written
agreements (or copies thereof) entered
into by such member, broker or dealer
relating to its business as such,
including agreements with respect to
any account.11
Pursuant to 17 CFR 240.17a–4(e)(7), a
broker or dealer registered pursuant to
section 15 of the Exchange Act must
maintain and preserve in an easily
accessible place each compliance,
supervisory, and procedures manual,
including any updates, modifications,
and revisions to the manual, describing
the policies and practices of the
member, broker or dealer with respect to
compliance with applicable laws and
rules, and supervision of the activities
of each natural person associated with
the member, broker or dealer until three
years after the termination of the use of
the manual.12
Written comments are invited on: (a)
whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
Attorney for 192 hours + Senior Risk Management
Specialist for 48 hours + Risk Management
Specialist for 192 hours) = 480 hours × 411
respondents = 197,280 hours.
9 This figure was calculated as follows: (Assistant
General Counsel at $543/hour × 48 hours = $26,064)
+ (Compliance Attorney at $426/hour × 192 hours
= $81,792) + (Senior Risk Management Specialist at
$417/hour × 48 hours = $20,016) + (Risk
Management Specialist at $232/hour × 192 hours =
$44,544) = $172,416 × 411 respondents =
$70,862,976.
10 This figure was calculated as follows:
$36,529,680 (industry one-time burden) +
$70,862,976 (industry ongoing burden) =
$107,392,656.
11 17 CFR 240.17a–4(b)(7). The title of the
information collection for 17 CFR 240.17a–4 is
‘‘Records to be Preserved by Broker-Dealers’’ (OMB
Control No. 3235–0279).
12 17 CFR 240.17a–4(e)(7).
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Federal Register / Vol. 88, No. 140 / Monday, July 24, 2023 / Notices
information shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information to be collected; and
(d) ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing by September 22, 2023.
Please direct your written comments
to: David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington,
DC 20549, or send an email to: PRA_
Mailbox@sec.gov.
Institution and settlement of injunctive
actions;
Institution and settlement of administrative
proceedings;
Resolution of litigation claims; and
Other matters relating to examinations and
enforcement proceedings.
Dated: July 18, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–15696 Filed 7–20–23; 11:15 am]
SECURITIES AND EXCHANGE
COMMISSION
BILLING CODE 8011–01–P
[Investment Company Act Release No.
34962; File No. 812–15181]
SECURITIES AND EXCHANGE
COMMISSION
KKR Real Estate Select Trust Inc., et al.
Sunshine Act Meetings
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July 18, 2023.
2:00 p.m. on Thursday,
July 27, 2023.
PLACE: The meeting will be held via
remote means and/or at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549.
STATUS: This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
In the event that the time, date, or
location of this meeting changes, an
announcement of the change, along with
the new time, date, and/or place of the
meeting will be posted on the
Commission’s website at https://
www.sec.gov.
The General Counsel of the
Commission, or her designee, has
certified that, in her opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
The subject matter of the closed
meeting will consist of the following
topics:
VerDate Sep<11>2014
16:56 Jul 21, 2023
Dated: July 20, 2023.
Vanessa A. Countryman,
Secretary.
BILLING CODE 8011–01–P
[FR Doc. 2023–15573 Filed 7–21–23; 8:45 am]
TIME AND DATE:
At times, changes in Commission
priorities require alterations in the
scheduling of meeting agenda items that
may consist of adjudicatory,
examination, litigation, or regulatory
matters.
CONTACT PERSON FOR MORE INFORMATION:
For further information; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Authority: 5 U.S.C. 552b.
Jkt 259001
Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’).
ACTION: Notice.
AGENCY:
Notice of application for an order
under sections 17(d) and 57(i) of the
Investment Company Act of 1940 (the
‘‘Act’’) and rule 17d–1 under the Act to
permit certain joint transactions
otherwise prohibited by sections 17(d)
and 57(a)(4) of the Act and rule 17d–1
under the Act.
SUMMARY OF APPLICATION: Applicants
request an order to permit certain
business development companies
(‘‘BDCs’’) and closed-end management
investment companies to co-invest in
portfolio companies with each other and
with certain affiliated investment
entities.
APPLICANTS: KKR Real Estate Select
Trust Inc., KKR Registered Advisor LLC,
Kohlberg Kravis Roberts & Co. L.P., KKR
Real Estate Finance Manager LLC,
KREST Operating Partnership L.P., KKR
Asia Property Partners SCSp, KKR
Property Partners Americas L.P., KKR
Property Partners Americas (EEA) SCSp,
KKR Property Partners Europe (EUR)
SCSp, KKR Property Partners Europe
GER (EUR) SCSp. KKR Real Estate
Partners Americas II L.P., KKR Real
Estate Partners Americas II SBS L.P.,
KKR Real Estate Partners Americas III
SCSp, KKR Real Estate Partners
PO 00000
Frm 00056
Fmt 4703
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Americas IV SCSp, KKR Real Estate
Partners Europe II (USD) SCSp, KKR
Real Estate Partners Europe II (EUR)
SCSp, KKR Real Estate Partners Europe
III (USD) SCSp, KKR Real Estate
Partners Europe III (EUR) SCSp, KKR
Asia Real Estate Partners SCSp, KKR
Asia Real Estate Partners II SCSp, KKR
Real Estate Finance Trust Inc., KKR Real
Estate Stabilized Credit Partners L.P.;
KKR Real Estate Credit Opportunity
Partners II L.P., KKR Real Estate Credit
Opportunity Partners II (Offshore) L.P.,
KKR Real Estate Credit Opportunity
Partners III L.P., KKR Opportunistic
Real Estate Credit Fund II L.P., KKR
Opportunistic Real Estate Credit Fund II
SCSp, MCS Corporate Lending LLC, and
Merchant Capital Solutions LLC.
FILING DATES: The application was filed
on November 27, 2020, and amended on
February 16, 2021, August 12, 2022,
January 13, 2023, and June 5, 2023.
HEARING OR NOTIFICATION OF HEARING: An
order granting the requested relief will
be issued unless the Commission orders
a hearing. Interested persons may
request a hearing on any application by
emailing the SEC’s Secretary at
Secretarys-Office@sec.gov and serving
the Applicants with a copy of the
request by email, if an email address is
listed for the relevant Applicant below,
or personally or by mail, if a physical
address is listed for the relevant
Applicant below. Hearing requests
should be received by the Commission
by 5:30 p.m. on August 14, 2023 and
should be accompanied by proof of
service on the Applicants, in the form
of an affidavit or, for lawyers, a
certificate of service. Pursuant to rule 0–
5 under the Act, hearing requests should
state the nature of the writer’s interest,
any facts bearing upon the desirability
of a hearing on the matter, the reason for
the request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
emailing the Commission’s Secretary at
Secretarys-Office@sec.gov.
ADDRESSES: The Commission:
Secretarys-Office@sec.gov. Applicants:
complianceny@kkr.com, rajib.chanda@
stblaw.com, bwells@stblaw.com and
nathan.somogie@stblaw.com.
FOR FURTHER INFORMATION CONTACT:
Barbara T. Heussler, Senior Counsel, or
Terri G. Jordan, Branch Chief, at (202)
551–6825 (Division of Investment
Management, Chief Counsel’s Office).
SUPPLEMENTARY INFORMATION: For
Applicants’ representations, legal
analysis, and conditions, please refer to
Applicants’ fourth amended and
restated application, dated June 5, 2023,
which may be obtained via the
Commission’s website by searching for
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]]>Agencies
[Federal Register Volume 88, Number 140 (Monday, July 24, 2023)]
[Notices]
[Pages 47526-47528]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-15573]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-XXX, OMB Control No. 3235-XXXX]
Proposed Collection; Comment Request: Rule 15c6-2
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'') is soliciting comments on the collection of
information provided for in Rule 15c6-2 (17 CFR. 240.15c6-2) under the
Securities Exchange Act of 1934 (``Exchange Act'') (15 U.S.C. 78a et
seq.). The Commission will submit the collection of information to the
Office of Management and Budget (``OMB'') for approval. The title of
the information collection is ``Rule 15c6-2.'' 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.
Rule 15c6-2 was adopted as part of the final rules to shorten the
standard settlement cycle for securities transactions from two business
days after the transaction date to one business day following the
transaction date. The compliance date for adopted Rule 15c6-2 is May
28, 2024. Certain provisions of Rule 15c6-2 contain ``collection of
information'' requirements within the meaning of the PRA.\1\ The
requirements for this collection of information is mandatory for any
broker or dealer (``broker-dealer'') engaging in the allocation,
confirmation, or affirmation process with another party or parties to
achieve settlement of a securities transaction that is subject to the
requirements of Sec. 240.15c6-1(a) to either enter into written
agreements as specified in the rule or establish, maintain, and enforce
written policies and procedures reasonably designed to address certain
objectives related to completing allocations, confirmations, and
affirmations as soon as technologically practicable and no later than
the end of trade date.\2\
---------------------------------------------------------------------------
\1\ See 44 U.S.C. 3501 et seq.
\2\ See 17 CFR 240.15c6-2; Exchange Act Release No. 96930 (Feb.
15, 2023) 88 FR 13872 (Mar. 6, 2023) (``Rule 15c6-2 Adopting
Release''); see also Exchange Act Release No. 94196 (Feb. 9, 2022),
87 FR 10436 (Feb. 24, 2022) (``Rule 15c6-2 Proposing Release'').
---------------------------------------------------------------------------
Specifically, for a broker-dealer that determines to establish,
maintain, and enforce written policies and procedures pursuant to Rule
15c6-2(a), Rule 15c6-2(b) requires that such policies and procedures
must be reasonably designed to (1) identify and describe any technology
systems, operations, and processes that the broker-dealer uses to
coordinate with other relevant parties, including investment advisers
and custodians, to ensure completion of the allocation, confirmation,
or affirmation process for the transaction; (2) set target time frames
on trade date for completing the allocation, confirmation, and
affirmation for the transaction; (3) describe the procedures that the
broker-dealer will follow to ensure the prompt communication of trade
information, investigate any discrepancies in trade information, and
adjust trade information to help ensure that the allocation,
confirmation, and affirmation can be completed by the target time
frames on trade date; (4) describe how the broker-dealer plans to
identify and address delays if another party, including an investment
adviser or a custodian, is not promptly completing the allocation or
affirmation for the transaction, or if the broker-dealer experiences
delays in promptly completing the confirmation; and (5) measure,
monitor, and document the rates of allocations, confirmations, and
affirmations completed as soon as technologically practicable and no
later than the end of the day on trade date.
The purpose of the collection under Rule 15c6-2 is to ensure that
parties to institutional transactions--that is, transactions where a
broker-dealer or its customer must engage with agents of the customer,
including the customer's investment adviser or its securities
custodian, to prepare a transaction for settlement--can ensure the
completion of the allocation, confirmation, and affirmation process as
soon as technologically practicable and no later than the end of the
day on trade date.
[[Page 47527]]
The respondents to the collection of information are broker-dealers
that are parties to institutional trades. As of December 31, 2021,
3,508 broker-dealers were registered with the Commission.\3\ Of those,
approximately 143 broker-dealers are participants of the Depository
Trust Company (``DTC''),\4\ a clearing agency registered with the
Commission that provides central securities depository services for
transactions in U.S. equity securities. Participants in DTC can
facilitate the settlement of securities transactions on behalf of their
customers. For example, broker-dealers that participate in DTC are
often referred to as ``clearing brokers'' within the securities
industry. In addition to broker-dealers, DTC participants include bank
custodians that may also hold securities on behalf of institutional
customers. Among other things, DTC facilitates the settlement of
securities transactions using the delivery-versus-payment (``DVP'') and
receipt-versus-payment (``RVP'') methods, both of which are commonly
used by buyers and sellers to settle an institutional transaction once
the parties have completed the allocation, confirmation, and
affirmation process. Because DTC is the only clearing agency that
provides central securities depository services for U.S. equities, the
Commission believes that the set of participants at DTC that are
broker-dealers are a useful, if partial, estimate of broker-dealers
that participate in the allocation, confirmation, and affirmation
process and therefore of broker-dealers that would be subject to the
requirements of Rule 15c6-2.
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\3\ This estimate is derived from FOCUS Report data as of
December 31, 2021.
\4\ See DTCC, DTC Member Directories, https://www.dtcc.com/client-center/dtc-directories (last updated July 1, 2023).
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In addition, other broker-dealers may participate in the
allocation, confirmation, and affirmation process but, because they do
not maintain status as a participant in DTC, rely on commercial
relationships with DTC participants (i.e., clearing brokers) to
facilitate final settlement of their institutional transactions. Using
annual statistics compiled by the Financial Industry Regulatory
Authority (``FINRA''), the Commission estimates that approximately 268
additional broker-dealers may serve institutional customers.\5\
Accordingly, the Commission estimates that approximately 411 broker-
dealers would be subject to the requirements of Rule 15c6-2.
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\5\ Specifically, statistics compiled by FINRA suggest that
approximately 256 small firms and 12 medium-sized firms in the
``Trading and Execution'' category perform ``Institutional
Brokerage.'' FINRA, 2022 FINRA Industry Snapshot 33, 34 (2022),
https://www.finra.org/sites/default/files/2022-03/2022-industry-snapshot.pdf.
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Rule 15c6-2 will impose both initial and ongoing burdens. The
extent to which a respondent will incur a burden to comply with the
collection of information under Rule 15c6-2 will depend on the extent
to which the broker-dealer determines that its policies and procedures,
as opposed to its written agreements, will be used to comply with the
rule and how any existing policies and procedures for ensuring timely
settlement would need to be modified to address same-day affirmation.
As a general matter, most broker-dealers maintain policies and
procedures to ensure the timely settlement of their transactions, and
the securities industry considers achieving ``same-day affirmation'' an
industry best practice. Nonetheless, the Commission believes that
respondent broker-dealers will need to evaluate existing policies and
procedures, identify any gaps, and then update their policies and
procedures to address any gaps identified. Accordingly, the Commission
estimates that respondent broker-dealers would incur an aggregate one-
time burden of approximately 240 hours \6\ to create policies and
procedures required under the rule, and that the internal cost (or
monetized value of the hour burden) of this one-time burden per broker-
dealer would be $88,880.\7\
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\6\ This figure was calculated as follows: (Assistant General
Counsel for 20 hours + Compliance Attorney for 120 hours + Senior
Risk Management Specialist for 20 hours + Risk Management Specialist
for 80 hours) = 240 hours x 411 respondents = 98,640 hours.
\7\ This figure was calculated as follows: (Assistant General
Counsel at $543/hour x 20 hours = $10,860) + (Compliance Attorney at
$426/hour x 120 hours = $51,120) + (Senior Risk Management
Specialist at $417/hour x 20 hours = $8,340) + (Risk Management
Specialist at $232/hour x 80 hours = $18,560) = $88,880 x 411
respondents = $36,529,680.
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Rule 15c6-2 also imposes ongoing burdens on a respondent broker-
dealer as follows: (i) ongoing monitoring and compliance activities
with respect to the written policies and procedures required by the
proposed rule; and (ii) ongoing documentation activities with respect
to its obligations to measure, monitor, and document the rates of
allocations, confirmations, and affirmations completed as soon as
technologically practicable and no later than the end of the day on
trade date. The Commission estimates that the ongoing activities
required by Rule 15c6-2 would impose an aggregate annual burden on a
respondent broker-dealer of 480 hours,\8\ and an internal cost (or
monetized value of the hour burden) per broker-dealer of $172,416.\9\
The total industry internal cost is estimated to be approximately
$107M.\10\
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\8\ This figure was calculated as follows: (Assistant General
Counsel for 48 hours + Compliance Attorney for 192 hours + Senior
Risk Management Specialist for 48 hours + Risk Management Specialist
for 192 hours) = 480 hours x 411 respondents = 197,280 hours.
\9\ This figure was calculated as follows: (Assistant General
Counsel at $543/hour x 48 hours = $26,064) + (Compliance Attorney at
$426/hour x 192 hours = $81,792) + (Senior Risk Management
Specialist at $417/hour x 48 hours = $20,016) + (Risk Management
Specialist at $232/hour x 192 hours = $44,544) = $172,416 x 411
respondents = $70,862,976.
\10\ This figure was calculated as follows: $36,529,680
(industry one-time burden) + $70,862,976 (industry ongoing burden) =
$107,392,656.
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Rule 15c6-2 imposes a recordkeeping requirement on broker-dealers
to maintain policies and procedures consistent with the rule. Where the
Commission requests that a broker-dealer produce records retained
pursuant to the requirements of Rule 15c6-2, a broker-dealer can
request confidential treatment of the information. If such confidential
treatment request is made, the Commission anticipates that it will keep
the information confidential subject to applicable law.
Pursuant to Exchange Act Rule 17a-4(b)(7), a broker or dealer
registered pursuant to section 15 of the Exchange Act must preserve for
a period of not less than three years, the first two years in an easily
accessible place, all written agreements (or copies thereof) entered
into by such member, broker or dealer relating to its business as such,
including agreements with respect to any account.\11\
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\11\ 17 CFR 240.17a-4(b)(7). The title of the information
collection for 17 CFR 240.17a-4 is ``Records to be Preserved by
Broker-Dealers'' (OMB Control No. 3235-0279).
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Pursuant to 17 CFR 240.17a-4(e)(7), a broker or dealer registered
pursuant to section 15 of the Exchange Act must maintain and preserve
in an easily accessible place each compliance, supervisory, and
procedures manual, including any updates, modifications, and revisions
to the manual, describing the policies and practices of the member,
broker or dealer with respect to compliance with applicable laws and
rules, and supervision of the activities of each natural person
associated with the member, broker or dealer until three years after
the termination of the use of the manual.\12\
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\12\ 17 CFR 240.17a-4(e)(7).
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Written comments are invited on: (a) whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission, including whether the
[[Page 47528]]
information shall have practical utility; (b) the accuracy of the
Commission's estimates of the burden of the proposed collection of
information; (c) ways to enhance the quality, utility, and clarity of
the information to be collected; and (d) ways to minimize the burden of
the collection of information on respondents, including through the use
of automated collection techniques or other forms of information
technology. Consideration will be given to comments and suggestions
submitted in writing by September 22, 2023.
Please direct your written comments to: David Bottom, Director/
Chief Information Officer, Securities and Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington, DC 20549, or send an email to:
[email protected].
Dated: July 18, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-15573 Filed 7-21-23; 8:45 am]
BILLING CODE 8011-01-P
