2023 Rule 17a-10 Supporting Statement 8.2.23

SUPPORTING STATEMENT
for the Paperwork Reduction Act Information Collection Submission for
Rule 17a-10 – Report on Revenue and Expenses
OMB Control No. 3235-0122

A.

JUSTIFICATION
1.

Necessity of Information

Paragraph (a)(1) of Rule 17a-10 (17 CFR 240.17a-10) under the Securities Exchange Act
of 19341 (“Exchange Act”) generally requires broker-dealers that are exempted from the filing
requirements of paragraph (a) of Exchange Act Rule 17a-5 (17 CFR 240.17a-5) to file with the
Commission the Facing Page, Statement of Income (Loss), and balance sheet from Part IIA of
Form X-17A-5 (17 CFR 249.617),2 and Schedule I of Form X-17A-5 (17 CFR 249.617) not later
than 17 business days after the end of each calendar year. Paragraph (a)(2) of Rule 17a-10
requires a broker-dealer subject to paragraph (a) of Rule 17a-5 to submit Schedule I of Form X17A-5 with its Form X-17A-5 for the calendar quarter ending December 31 of each year.
The previous Paperwork Reduction Act submission for Rule 17a-10 stated that the
burden associated with the filing of Schedule I was accounted for in the Paperwork Reduction
Act filing associated with Rule 17a-5.3 However, Commission staff has determined that it is
appropriate that the burden for the filing of Schedule I required under Rule 17a-10 be accounted
for as a burden attributable to Rule 17a-10.
Paragraph (b) of Rule 17a-10 provides that the provisions of paragraph (a) do not apply
to members of national securities exchanges or registered national securities associations that
maintain records containing the information required by Form X-17A-5 and which transmit to
the Commission copies of the records pursuant to a plan which has been declared effective by the
Commission. As a result, filings of Schedule I are generally made with FINRA electronically
through its eFOCUS system.
The primary purpose of Rule 17a-10 is to obtain the economic and statistical data
necessary for an ongoing analysis of the securities industry. The Commission adopted Rule 17a10 pursuant to sections 15(c)(3), 17(a), and 23(a) of the Exchange Act, 15 U.S.C. sections
78o(c)(3), 78q(a), and 78w(a), respectively.
2.

Purpose and Use of Information Collection

The information submitted under Rule 17a-10 is used to identify which broker-dealers
engage in various securities-related activities and to determine the amount of revenue derived by
such broker-dealers from these activities. These data are needed by the Commission to evaluate
1
2

3

15 U.S.C. 78a et seq.
Form X-17A-5 is the Financial and Operational Combined Uniform Single Report (“FOCUS Report”),
which is used by broker-dealers to provide certain required information to the Commission.
See Rule 17a-5 Paperwork Reduction Act filing (OMB Control Number 3235-0123).

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the effects of economic events and public policies on various segments of the securities industry.
Only the most current information will assist the Commission in its ongoing analysis of
securities industry revenue sources and related expenses.
3.

Consideration Given to Information Technology

The compilation and filing of the required information reflect the complexity of the
broker-dealer’s business. The increasing use by the Commission and broker-dealers of
computerized systems for information gathering and compilation has minimized the burden
associated with Rule 17a-10 to the extent possible at this time.
4.

Duplication

Rule 17a-10 is the only rule that requires the submission of Schedule I of Form X-17A-5.
Because no similar information is available, no duplication exists.
5.

Effect on Small Entities

The required reports are not extensive, and therefore the collection of information is not
unduly burdensome for small entities.
6.

Consequences of Not Conducting Collection

If this information were collected less frequently, the Commission could not maintain and
formulate effective policies regarding the securities industry.
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 required Federal Register notice with a 60-day comment period soliciting comments
on this collection of information was published. No public comments were received.
9.

Payment or Gift

No payments or gifts were provided to respondents.
10.

Confidentiality

Paragraph (c) of Rule 17a-10 provides that the reports filed under the rule are to be
considered non-public information, except in situations where the Commission determines it is in
the public interest to direct otherwise.

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11.

Sensitive Questions

The information collection collects basic elements of Personally Identifiable Information
(“PII”) including name, job title, and work address that is covered by the EDGAR PIA. No
information of a sensitive nature, including social security numbers, will be required under this
collection of information. Additionally, the agency has determined that the information
collection does not constitute a system of record for purposes of the Privacy Act. Information is
not retrieved by a personal identifier.
12.

Information Collection Burden

The staff estimates that for the 12 months ended December 31, 2022, approximately
3,740 broker-dealers filed Schedule I under paragraph (a)(2) of Rule 17a-10, and that while no
broker-dealer filed Schedule I and the Facing Page, Statement of Income (Loss), and balance
sheet from Part IIA of Form X-17A-5 under paragraph (a)(1) of Rule 17a-10, the Commission
conservatively estimates that there is one respondent that files in this category.
The staff estimates that, on average, the amount of time required to file Schedule I is
approximately 12 hours per response. This estimate is based on staff experience in this area.
Each broker-dealer is required to make one filing per year, resulting in an industry-wide total
reporting burden of approximately 44,880 hours per year (3,740 responses times one response
per year times 12 hours per response).
The staff estimates that, on average, the amount of time required to file the Facing Page,
Statement of Income, and balance sheet from Part IIA of Form X-17A-5 is approximately 12
hours, resulting in an industry-wide total reporting burden of 12 hours (1 respondent times one
response per year times 12 hours per response).
The burden hours are summarized in the table below.
Name of
Information
Collection

Burden
Type

Number of
Number of
Respondents Annual
Reponses
Per
Respondent

Ongoing
Burden
Per
Response

Total
Small
Industry
Business
Burden for Entities
Information Affected
Collection

Schedule I

Reporting

3,740

1

12

44,880

File Form X- Reporting
17A-5 facing
page, income
statement,
and balance
sheet
Total Hour
Burden

1

1

12

12

44,892

895
1

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13.

Costs to Respondents

Not applicable. It is not anticipated that respondents will have to incur capital or start-up
costs to comply with Rule 17a-10.
14.

Costs to Federal Government

Commission staff estimates that there is no annual cost associated with reviewing filings
made under Rule 17a-10.
15.

Changes in Burden

The annual reporting burden increased as a result of the Commission staff’s
determination, discussed above, that it is appropriate to attribute the burden associated with
Schedule I filings to the burden attributable to Rule 17a-10. This resulted in an increase in the
number of respondents filing Schedule 1 from 0 to 3,740 and related burden hour increase from 0
to 44,880 hours (3,740 respondents times 12 hours per year). The Commission estimates a
decrease in the number of respondents filing the Form X-17A-5 Facing Page, Statement of
Income, and balance sheet from 46 to 1. This results in a decrease in the hour burden from 552
to 12 hours for Form X-17a-5 filers (1 respondent x 12 hours). There is no change in the cost
burden, which continues to be $0.
The changes in hour burdens are summarized in the table below. The cost burden is
estimated to be $0 for both forms due to electronic filing by respondents.

Name of
Information
Collection

Current
Annual
Industry
Burden

Revised
Annual
Industry
Burden

Change in
Burden

Reason for Change

Schedule I

0

44,880

44,880

Addressing information
collection under the Rule

File Form
X-17A-5
facing page,
income
statement,
and balance
sheet

552

12

(540)

Change in staff estimate
of entities impacted

16.

Information Collection Planned for Statistical Purposes

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

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17.

Approval to Omit OMB Expiration Date

The Commission is not seeking approval to omit the expiration date.
18.

Exceptions to Certification for Paperwork Reduction Act Submissions

This collection complies with the requirements in 5 CFR 1320.9.
B.

COLLECTION OF INFORMATION EMPLOYING STATISTICAL METHODS
This collection does not involve statistical methods.