The Securities and Exchange Commission
("Commission") is adopting new Rule 13h-1 and Form 13H under
Section 13(h) of the Securities Exchange Act of 1934 ("Exchange
Act") to establish large trader reporting requirements. The rule is
intended to assist the Commission in identifying and obtaining
certain baseline trading information about traders that conduct a
substantial amount of trading activity, as measured by volume or
market value, in the U.S. securities markets. In essence, a "large
trader" will be defined as a person whose transactions in NMS
securities equal or exceed (i) two million shares or $20 million
during any calendar day, or (ii) 20 million shares or $200 million
during any calendar month. The large trader reporting regime is
designed to facilitate the Commission's ability to assess the large
trader activity on the securities markets, to reconstruct trading
activity following periods of unusual market volatility, and to
analyze significant market events for regulatory purposes. It also
should enhance the Commission's ability to detect and deter
fraudulent and manipulative activity and other trading abuses, and
should provide the Commission with a valuable source of useful data
to study markets and market activity. The identification,
recordkeeping, and reporting system will provide the Commission
with a mechanism to identify large traders and their affiliates,
accounts, and transactions. Specifically, Rule 13h-1 will require
large traders to identify themselves to the Commission and make
certain disclosures to the Commission on Form 13H. Upon receipt of
Form 13H, the Commission will issue a unique identification number
to the large trader, which the large trader will then provide to
its registered broker-dealers. Registered broker-dealers will be
required to maintain transaction records for each large trader, and
will be required to report that information to the Commission upon
request. In addition, certain registered broker-dealers subject to
Rule 13h-1 will be required to perform limited monitoring of their
customers' accounts for activity that may trigger the large trader
identification requirements of Rule 13h-1.
US Code:
15 USC 78m and 78w Name of Law: Sections 13(h) and 23(a) of the
Securities Exchange Act
The estimated one-time
aggregate burden for new large traders has increased from 8,000
burden hours to 13,200 burden hours. This increase is due to an
increase (from 400 to 660) in the annual number of projected large
traders filing an initial Form 13H. The Commission's estimate of
the annual ongoing burden for large traders also has increased from
6,800 burden hours to 22,560 burden hours. This increase also is
the result of an increase in the number of projected large traders,
but was mitigated by a significant decrease in the ongoing annual
burden per respondent estimate (from 17 burden hours to 2 burden
hours). The total burden estimate to broker-dealers has decreased.
The Commission estimated that, during the first year of
implementation, broker-dealers subject to the rule would
collectively incur 214,500 burden hours (initial, one-time burdens)
complying with the new rule. During the current measuring period,
the Commission expects that broker-dealers will incur zero burden
hours for initial, one-time burdens. There is no change in the
estimated aggregate ongoing annual burden associated with
broker-dealers' compliance with Rule 13h-1.
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.
Form SEC 13H Rule 13h-1 - Large Traders Initial Filing
Rule 13h-1 Supp Statement - RENEWAL v4 (RH comments) (3).pdf
Rule 13h-1 - Broker-Dealer Reporting