OMB files this
comment in accordance with 5 CFR 1320.11( c ). This OMB action is
not an approval to conduct or sponsor an information collection
under the Paperwork Reduction Act of1995. This action has no effect
on any current approvals. If OMB has assigned this ICR a new OMB
Control Number, the OMB Control Number will not appear in the
active inventory. For future submissions of this information
collection, reference the OMB Control Number provided. Pursuant to
5 CFR 1320.11(c), OMB files this comment on this information
collection request (ICR). In accordance with 5 CFR 1320, OMB is
withholding approval at this time. The agency shall examine public
comment in response to the NPRM and will describe in the preamble
of the final rule how the agency has maximized the practical
utility of the collection and minimized the burden. The next
submission to OMB must include the draft final rule.
Inventory as of this Action
Requested
Previously Approved
36 Months From Approved
0
0
0
0
0
0
0
0
0
Rule 15c3-5 would require brokers or
dealers with access to trading directly on an exchange or ATS,
including those providing sponsored or direct market access to
customers or other persons, to implement risk management controls
and supervisory procedures designed to manage the financial,
regulatory, and other risks of this business activity.
Specifically, Rule 15c3-5 would require that brokers or dealers
with access to trading securities on an exchange or ATS, as a
result of being a member or subscriber thereof, establish,
document, and maintain a system of risk management controls and
supervisory procedures that, among other things, are reasonably
designed to (1) systematically limit the financial exposure of the
broker or dealer that could arise as a result of market access, and
(2) ensure compliance with all regulatory requirements that are
applicable in connection with market access. Each such broker or
dealer would be required to preserve a copy of its supervisory
procedures and a written description of its risk management
controls as part of its books and records in a manner consistent
with Rule 17a-4(e)(7) under the Exchange Act. The financial and
regulatory risk management controls and supervisory procedures
required by Rule 15c3-5 must be under the direct and exclusive
control of the broker or dealer with market access. In addition, a
broker or dealer with market access would be required to establish,
document, and maintain a system for regularly reviewing the
effectiveness of the risk management controls and supervisory
procedures and for promptly addressing any issues. Among other
things, the broker or dealer would be required to review, no less
frequently than annually, the business activity of the broker or
dealer in connection with market access to assure the overall
effectiveness of such risk management controls and supervisory
procedures and document that review. Such review would be required
to be conducted in accordance with written procedures and would be
required to be documented. The broker or dealer would be required
to preserve a copy of such written procedures, and documentation of
each such review, as part of its books and records in a manner
consistent with Rule 17a-4(e)(7) under the Exchange Act, and Rule
17a-4(b) under the Exchange Act, respectively. In addition, the
Chief Executive Officer (or equivalent officer) of the broker or
dealer would be required, on an annual basis, to certify that the
risk management controls and supervisory procedures comply with
Rule 15c3-5, and that the regular review described above has been
conducted. Such certifications would be required to be preserved by
the broker or dealer as part of its books and records in a manner
consistent with Rule 17a-4(b) under the Exchange Act.
The proposed rule seeks to
ensure that broker-dealers, which under the current regulatory
structure are the only entities that may be members of exchanges
and, as a practical matter, constitute the majority of subscribers
to alternative trading system or ATSs, appropriately control the
risks associated with market access, so as not to jeopardize their
own financial condition, that of other market participants, the
integrity of trading on the securities markets, and the stability
of the financial system. The broker-dealer, as the member of the
exchange or subscriber of the ATS, is responsible for all trading
that occurs under its market participant identifier or other market
identifier. If this information were not collected frequently, the
Commission believes that the broker-dealer would jeopardize not
only its own financial viability, but also the stability of the
markets and, potentially, the financial system. The Commission
believes that this responsibility is too great to allow the
requisite risk management controls to be monitored less frequently.
The burden increase occurred because the proposed information
collection requirement did not previously exist.
$0
No
No
No
Uncollected
No
Uncollected
Daniel Gien 2025515747
No
On behalf of this Federal agency, I certify that
the collection of information encompassed by this request complies
with 5 CFR 1320.9 and the related provisions of 5 CFR
1320.8(b)(3).
The following is a summary of the topics, regarding
the proposed collection of information, that the certification
covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a
benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control
number;
If you are unable to certify compliance with any of
these provisions, identify the item by leaving the box unchecked
and explain the reason in the Supporting Statement.
Rule 15c3-5 Supporting Statement.doc
Rule 15c3-5: Risk Management Controls for Brokers or Dealers with Market Access