3235-0793 OMB Supporting Statement for Reg SE (Final Rule)

SUPPORTING STATEMENT for the Paperwork Reduction Act Information Collection
Submission for Rules Relating to Security-Based Swap Execution and Registration and
Regulation of Security-Based Swap Execution Facilities
(OMB Control No. 3235-0793)
This submission is being made pursuant to the Paperwork Reduction Act of 1995, 44
U.S.C. Section 3501 et seq.
A.

JUSTIFICATION
1.

Necessity of Information Collection

The Securities and Exchange Commission (“Commission”) is adopting a set of rules
(“Regulation SE”) and forms under Section 3D of the Securities Exchange Act of 1934 (“SEA”)
that creates a regime for the registration and regulation of security-based swap execution
facilities (“SBSEFs”) and address other issues relating to security-based swap (“SBS”) execution
generally.1 Key rules within Regulation SE include Rule 803, which establishes a process for
SBSEF registration; Rules 804 to 810, which establish procedures for rule and product filings by
SBSEFs; Rules 818 to 831, which implement the 14 Core Principles for SBSEFs set forth in
Section 3D(d) of the SEA; Rules 832 to 833, which address cross-border matters relating to SBS
execution; and Rule 834, which impose requirements addressing conflicts of interest involving
SBSEFs and SBS exchanges, as required by Section 765 of the Dodd-Frank Act.
In addition to the rules described above, the Commission is also adopting Form SBSEF,2
which is the form that an entity will use to register with the Commission as an SBSEF; adopting
a submission cover sheet,3 which will be required to accompany filings with the Commission
made by SBSEFs for rule and rule amendments and for product listings; adopting amendments to
existing Rule 3a1-1 under the SEA4 to exempt from the SEA definition of “exchange” registered
SBSEFs that provide a market place for no securities other than SBS and certain registered
clearing agencies; adopting new Rule 15a-12 under the SEA5 that, while affirming that an
SBSEF also would be a broker under the SEA, would exempt a registered SBSEF from certain
broker requirements; providing for the sunsetting of an existing exemption from the requirement
to register as a clearing agency for entities performing the functions of an SBSEF but that are not
yet registered as such; and adopting new rules and amendments to the Commission’s Rules of
Practice,6 to allow persons who are aggrieved by certain determinations by an SBSEF to apply
1

See Rules Relating to Security-Based Swap Execution and Registration and Regulation of
Security-Based Swap Execution Facilities, SEA Release No. 34-98845 (Nov. 2, 2023), 88
FR 87156 (Dec. 15, 2023) (“Regulation SE Adopting Release”).

2

See 17 CFR 249.1701.

3

See 17 CFR 249.1702.

4

See 17 CFR 240.3a1-1.

5

See 17 CFR 240.15a-12.

6

See 17 CFR part 201.

for review by the Commission and to delegate certain regulatory tasks to various persons and
offices within the Commission.
The rules and rule amendments include a collection of information within the meaning of
the Paperwork Reduction Act (“PRA”) for SBSEFs that will be required to comply with
Regulation SE and file a Form SBSEF with the Commission. In addition, Rule 833 includes a
collection of information within the meaning of the PRA for persons that wish to seek an
exemption order under that rule, and Rule 834 includes a collection of information within the
meaning of the PRA for SBS exchanges (in addition to SBSEFs).
Many of the rules that constitute Regulation SE are modeled after analogous Commodity
Futures Trading Commission (“CFTC”) rules already in force, with only minor edits to reflect
differences between the statutory regimes of the two agencies. Entities that are most likely to
register with the Commission as SBSEFs are those already registered with the CFTC as SEFs.
Such entities have made substantial investments in systems, policies, and procedures to comply
with and adapt to the regulatory system developed by the CFTC. Harmonization will allow such
dually-registered entities to utilize their existing systems, policies, and procedures to comply
with the Commission’s SBSEF rules, and SEF members will likely face only marginal additional
burdens to trade SBS as well as swaps on dually registered platforms. In light of these factors,
the Commission has based many of its paperwork burden estimates on CFTC burden estimates
calculated for analogous CFTC rules. The CFTC estimated PRA burdens by aggregating the
burdens produced by a group of related rules. In most cases, the Commission has modeled its
methodology, assumptions, and calculations on those of the CFTC, while making adjustments
that reflect differences between the scale of the market for swaps relative to the market for SBS,
such as the estimated number of SBSEFs, number of SBS market participants, and number of
SBS transactions, as necessary.
2.

Purpose and Use of the Information Collection
a.

Registration requirements and Form SBSEF

Regulation SE imposes various requirements relating to SBSEF registration, which are
set forth in Rule 803.7 The information collected pursuant to these rules will enhance the ability
of the Commission to determine whether to approve the registration of an entity as an SBSEF; to
monitor and oversee SBSEFs; to determine that SBSEFs initially comply, and continue to
operate in compliance, with the SEA, including the Core Principles applicable to SBSEFs; to
carry out its statutorily mandated oversight functions; and to maintain accurate and updated
information regarding SBSEFs. Because the registration information will be publicly available, it
could also be useful to an SBSEF’s members, other market participants, other regulators, and the
public generally.

7

See, e.g., Rule 803(b)(1) (requiring an entity that wishes to register with the Commission
as an SBSEF to submit a Form SBSEF).
2

b.

Requirements for SBSEFs to establish rules

Various provisions of Regulation SE require SBSEFs to establish certain rules, policies,
and procedures to comply with applicable requirements of the SEA and the Commission’s rules
thereunder.8 The rules also will help an SBSEF’s members to understand and comply with
requirements of the SBSEF.
c.

Reporting requirements for SBSEFs

Various provisions of Regulation SE require SBSEFs and certain other persons to submit
reports or provide specified information.9 This information generally will be used by the
Commission in its oversight of SBSEFs and the SBS markets; certain of the information to be
collected could be used by market participants to confirm their SBS transactions.
d.

Recordkeeping required under Regulation SE

Regulation SE requires an SBSEF to keep specified records.10 The audit trail information
required to be maintained under Regulation SE will aid the SBSEF in detecting and deterring
fraudulent and manipulative acts with respect to trading on its market, as well as help it to fulfill
the statutory requirement in Core Principle 4 that an SBSEF monitor trading in SBS, including
through comprehensive and accurate trade reconstructions. In addition, Commission access to
these records will provide a valuable tool to help the Commission carry out its oversight
responsibility over SBSEFs and the SBS markets in general.
e.

Timely publication of trading information requirement for SBSEFs

Regulation SE imposes certain publication burdens on SBSEFs in Rule 825.11 The
requirement contained in Rule 825 that an SBSEF have the capacity to electronically capture,
transmit, and disseminate information on price, trading volume, and other trading data on all
SBS executed on or through the SBSEF will assist the SBSEF in carrying out its regulatory
responsibilities under the SEA and enable the SBSEF to comply with reasonable requests to
provide information to others. Furthermore, Rule 825 requires an SBSEF to publish a Daily
Market Data Report that is designed to provide market observers with a daily snapshot of market
activity on the SBSEF.

8

See, e.g., Rule 819(a)(2) (requiring an SBSEF to establish and enforce trading, trade
processing, and participation rules).

9

See, e.g., Rule 829 (requiring an SBSEF, quarterly or upon Commission request, to
provide the Commission a report that includes the amount of financial resources
necessary to meet the requirements of Rule 829).

10

See Rule 826 (requiring an SBSEF to maintain records of all activities relating to the
business of the facility, including a complete audit trail, and to report information to the
Commission upon request).

11

See Rule 825 (requiring an SBSEF to make publicly available a “Daily Market Data
Report”).
3

f.

Rule filing and product filing processes for SBSEFs

Regulation SE establishes various filing requirements applicable to SBSEFs. Rules 804
and 805 provide mechanisms for an SBSEF to submit filings for new products that they seek to
list either through a self-certification process or by voluntarily requesting approval of the
Commission, respectively. Rules 806 and 807 require an SBSEF to submit new rule or rule
amendments either through a self-certification process or by voluntarily requesting approval of
the Commission, respectively. Rule 808 addresses confidential treatment of filings made under
the self-certification procedures or pursuant to Commission review and approval. Rule 809
establishes procedures for addressing the situation where an SBSEF wishes to list a product and
it is unclear whether the product properly falls under the jurisdiction of the SEC or the CFTC.
Rule 810 provides that an applicant for registration as an SBSEF may submit for Commission
review and approval an SBS’s terms and conditions or rules prior to listing the product as part of
its application for registration.
The information that will be collected under Rules 804 and 805 will help the Commission
assess whether an SBS listed by an SBSEF complies with relevant provisions of the SEA. In
addition, this information will assist the Commission in overseeing the SBSEF’s compliance
with its regulatory obligations generally and to learn about developments in the SBS product
market. Rules 804 and 805 also provide a mechanism whereby market participants, other
SBSEFs, other regulators, and the public generally could learn what products an SBSEF intends
to list, and to obtain information regarding such products. The information that will be collected
under Rules 806 and 807 will help the Commission assess whether a new rule or rule amendment
of an SBSEF complies with relevant provisions of the SEA and assist the Commission in
overseeing the SBSEF’s compliance with its regulatory obligations generally. Rules 806 and 807
also will provide a mechanism whereby an SBSEF’s members (and prospective members) could
learn what new rules or rule amendments the SBSEF intends to apply in its market.
The information collected under Rules 809 and 810 will help the Commission assess an
SBSEF’s compliance with relevant provisions of the SEA and assist the Commission in
overseeing the SBSEF’s compliance with its regulatory obligations. This information also will be
useful to the SBSEF’s members because they will be subject to such new or amended rules or
products and thus would have an interest in learning about those rules or products. Other market
participants, other SBSEFs, and other regulators, as well as the public generally, may find
information about proposed new or amended rules or products useful.
g.

Requirements relating to the CCO

Regulation SE includes Rule 831, which sets out requirements relating to an SBSEF’s
Chief Compliance Officer (“CCO”). The information that will be collected under Rule 831 will
help ensure compliance by SBSEFs with relevant provisions of the SEA and assist the
Commission in overseeing SBSEFs generally. The Commission would be able to use the annual
compliance report to help it evaluate whether an SBSEF is carrying out its statutorily-mandated
regulatory obligations and, among other things, to discern the scope of any denials of access or
refusals to grant access by the SBSEF and to obtain information on the status of the SBSEF’s
regulatory compliance program. The SBSEF’s financial reports will provide the Commission
with important information on the financial health of the SBSEF.
4

h.

Surveillance systems requirements for SBSEFs

The rules that will require an SBSEF to maintain surveillance systems and to monitor
trading12 are designed to promote compliance by an SBSEF with its obligations under the SEA to
oversee trading on its market, and to prevent manipulation and other unlawful activity or
disruption of its market.
3.

Consideration Given to Improved Information Technology

Under Regulation SE, various provisions require registered SBSEFs (or SBSEF
applicants) to file specified information electronically with the Commission, in a form and
manner required by the Commission. Certain exhibits to Form SBSEF and other submission will
be required to be submitted electronically via the Commission’s EDGAR system using Inline
XBRL. Requiring SBSEFs to file this information in EDGAR will provide the Commission and
the public with a centralized, publicly accessible electronic database for the information, thereby
facilitating its use. EDGAR will also enable technical validation of the disclosures, thus
potentially reducing the incidence of non-discretionary errors (e.g., including text for a
disclosure that should contain only numbers). Moreover, requiring Inline XBRL tagging of the
reported disclosures will facilitate retrieval, aggregation, and comparison of the reported
information across different SBSEFs and time periods. Other items will be required to be
submitted electronically via EDGAR but require the use of a custom XML data language rather
than Inline XBRL The Commission is requiring some disclosures to be structured in Inline
XBRL, and other disclosures to be structured in custom XML because the Commission believes
Inline XBRL is well-suited for certain types of content—such as financial statements and
extended narrative discussions—whereas other types of content can be readily captured using
custom XML data languages that yield smaller file sizes than Inline XBRL and thus facilitate
more streamlined data processing. Certain documents such as copies of by-laws and written
agreements could be submitted as unstructured PDF attachments to the otherwise structured
filings. Lastly, rule and product filings under Rules 804 through 807 will be required to be
submitted through the Commission’s Electronic Form Filing Systems (“EFFS”) electronically in
an unstructured format. This will align the process for these filings with the process for filings by
other regulated entities (namely, self-regulatory organization) that also use the EFFS system.
4.

Duplication

The adopted amendments do not result in, or require the collection of, duplicate
information that is otherwise available in a similar form.
5.

Effects on Small Entities

Most of Regulation SE, and the related rules and rule amendments, will apply to
registered SBSEFs (or entities that are seeking to register with the Commission as SBSEFs). In
the Dodd-Frank Act, Congress defined SBSEFs as a new type of trading venue for SBS and
mandated the registration of these entities. The Commission believes that most, if not all,
12

See, e.g., Rule 819(d)(3) (requiring an SBSEF to establish and maintain sufficient
compliance staff and resources).
5

SBSEFs will be large business entities or subsidiaries of large business entities, and that every
SBSEF (or its parent entity) will have assets in excess of $5 million and annual receipts in excess
of $41,500,000. Therefore, the Commission believes that none of the potential SBSEFs will be
considered small entities.
Rule 833 describes how foreign SBS trading venues could become exempt from the SEA
definitions of “exchange,” “security-based swap execution facility,” and “broker” and how SBS
executed on a foreign trading venue could become exempt from the SEA’s trade execution
requirement for SBS. Any such requests will likely be submitted by foreign SBS trading venues,
foreign authorities that license and regulate those trading venues, or covered persons (as defined
in Rule 832) who are members of such trading venues. Based on the Commission’s existing
information about the SBS market, the Commission believes that no person likely to request an
exemption order pursuant to Rule 833 will be considered a small entity. The Commission
believes that most, if not all, of the persons requesting exemptions will be large business entities
or subsidiaries of large business entities, each of which, on its own or through its parent entity,
will have assets in excess of $5 million (or in the case of a broker-dealer, total capital of less than
$500,000) and annual receipts in excess of $41,500,000.
Certain rules in Regulation SE apply to SBS exchanges. Based on the Commission’s
existing information about national securities exchanges, the Commission believes that the
entities likely to be considered SBS exchanges will not be considered small entities. The
Commission believes that any SBS exchange will have annual receipts in excess of $41,500,000.
6.

Consequences of Not Conducting Collection

As mentioned above, the information collected pursuant to these rules will enhance the
ability of the Commission to determine whether to approve the registration of an entity as an
SBSEF; to monitor and oversee SBSEFs; to determine that SBSEFs initially comply, and
continue to operate in compliance, with the SEA, including the Core Principles applicable to
SBSEFs; to carry out its statutorily mandated oversight functions; and to maintain accurate and
updated information regarding SBSEFs. Because the registration information will be publicly
available, it could also be useful to an SBSEF’s members, other market participants, other
regulators, and the public generally. Absent the collection, these goals would become much more
difficult if not impossible to accomplish.
7.

Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)

The rules require an SBSEF to maintain records of all activities relating to the business of
the facility, including a complete audit trail, in a form and manner acceptable to the Commission
for a period of five years. This time period is consistent with existing requirements for national
securities exchanges and national securities associations pursuant to Rule 17a-1 under the SEA.13
There are no other special circumstances, and this collection is otherwise consistent with the
guidelines in 5 CFR 1320.5(d)(2).

13

See 17 CFR 240.17a-1.
6

8.

Consultations Outside the Agency

The required Federal Register notice with a 30-day comment period soliciting comments
on this collection of information was published.14 No public comments addressing the PRA or
the Commission’s preliminary burden estimates were received. The Commission did, however,
receive a number of comments on the proposed rules. These commenters’ concerns are discussed
herein only to the extent that they resulted in the Commission modifying a rule or rules that have
collections of information. Specifically, certain commenters’ concerns pertaining to Rules 804,
815, 819, 825, and 834 are referenced below in the respective sections discussing the estimated
burdens associated with these rules. However, the changes did not result in a net increase or
decrease in the estimated burden hours for any of the rules.
9.

Payment or Gift

No payment or gift is provided to respondents.
10.

Confidentiality

The information collection does not collect personally identifiable information. The
agency has determined that neither a PIA nor a SORN are required in connection with the
collection of information.
11.

Sensitive Questions

Under the rule, certain submissions will require the name and title of a duly authorized
person to make submissions for the respondents. The name and title are the only personally
identifiable information to be collected. Therefore, a SORN and a PIA are not required for this
information collection.
12.

Burden of Information Collection

The amendment establishes 12 new collections of information, which are listed in the
table below. The new hour burdens will be a program change due to agency discretion as they
result from Commission rules adopted under the SEA. Each of the collections of information is
explained further in the discussion.

14

See Rules Relating to Security-Based Swap Execution and Registration and Regulation of
Security-Based Swap Execution Facilities (Proposed Rule), SEA Release No. 94615
(Apr. 6, 2022), 87 FR 28872 (May 11, 2022).
7

Type of
Burden15

Number of
Entities
Impacted

Small
Business
Entities
Affected

Initial
Burden
Annualized per
Entity
per
Response

Ongoing
Burden
per
Entity
per
Response

Registration
(Rule 803,
Form SBSEF)

Reporting

5

0

98.3316

0

Rules modeled
on 17 CFR part
37 (other than
registration)

Reporting

5

0

0

Rule and
product filing
processes
including cover
sheet (Rules
804-807)
modeled on 17
CFR part 40

Reporting

5

0

Rule 809

Reporting

5

Rule 811(d)

Reporting

Rule 819(i)

Total
Annual
Burden
Per
Entity

Total
Annual
Industry
Burden

1

98.33

491.67

387

1

387

1,935

0

60

1

60

300

0

0

0.25

1

0.25

1.25

5

0

0

0.25

1

0.25

1.25

Reporting

5

0

0

79.83

1

79.83

399.15

Rule 819(j)

Reporting

5

0

0

.5

1

.5

2.5

Rule 826(f)

Recordkeeping

5

0

0

.4

1

.4

2

Reporting

7

0

26.66

0

1

26.66

186.67

Rule 834(b)-(c)

Recordkeeping

8

0

517

0

5

40

Rule 834(d)-(g)

Reporting

8

0

0

3.25

1

3.25

26

Rule 835

Reporting

5

0

0

0.75

12

9

45

Name of
Information
Collection

Rule 833

Response
per Year

1

15

The Commission notes that certain collections can contain characteristics of reporting,
third-party disclosure, and/or recordkeeping. In such instances, Commission staff made a
determination as to which is the predominant characteristics and classified the collection
as such.

16

This represents an initial burden of 295 hours discussed in the Regulation SE Adopting
Release, supra note 1, 88 FR at 87273, divided by three for the length of the three year
renewal period.

17

This represents an initial burden of 15 hours discussed in the Regulation SE Adopting
Release, supra note 1, 88 FR at 87277, divided by three for the length of the three year
renewal period.
8

a.

Registration (Rule 803, Form SBSEF)

A submission by an entity wishing to register with the Commission as an SBSEF is
required to be made on Form SBSEF, pursuant to Rule 803, on a one-time basis. The
Commission estimates that five entities initially will seek to register with the Commission as
SBSEFs. These entities will incur initial, one-time burdens for registration, because once an
entity is registered as an SBSEF, its registration obligations are complete. The Commission’s
estimate regarding the initial burden that an entity will incur to file a Form SBSEF is informed
by the estimates made by the CFTC for the completion of Form SEF and compliance with § 37.3
of the CFTC regulations (which governs registration of SEFs).18 Form SBSEF requests almost
exactly the same information as required by Form SEF. Rule 803 is substantially similar to
§ 37.3. The CFTC has estimated that the initial compliance burden associated with its
registration requirements in § 37.3 and Form SEF to be 295 hours per SEF applicant (or 98.33
hours, i.e., 295 divided by 3 for the three-year renewal period).19 For purposes of calculating
burden hours, the CFTC considered the entire SEF application process to constitute a single
information collection; the Commission is utilizing the same approach for SBSEFs.
The Commission estimates that each Respondent will incur an initial one-time
annual reporting burden of approximately 98.33 hours, for an aggregate initial one-time
annual industry reporting burden for all five Respondents of approximately 491.67 hours.20
b.

Rules modeled on CFTC part 37 (other than registration)

The CFTC has estimated that the compliance burden for all of the sections of part 37
combined, other than the initial burden of 295 hours per SEF for registration-related compliance
discussed above, to be an ongoing annual burden of 387 hours per SEF.21 With the exception of
§ 37.600 of the CFTC’s regulations,22 which implements a CEA Core Principle for SEFs relating
to position limits that is not in the SEA, every other section of part 37 has an analog in
Regulation SE that is substantively similar.23 Therefore, the Commission estimates that the

18

17 CFR 37.3.

19

See OMB, Supporting Statement for New and Revised Information Collections: Core
Principles and Other Requirements for Swap Execution Facilities, OMB Control Number
3038-0074, Attachment A (July 7, 2021), available at https://omb.report/icr/2021073038-004/doc/113431800.pdf. (“July 2021 OMB CFTC Supporting Statement”).

20

98.33 hours per respondent x 5 respondents = 491.67 hours.

21

See July 2021 OMB Supporting Statement, supra note 19, at 8 (estimating that on a net
basis the total burden hours imposed on each SEF will be 387 hours).

22

17 CFR 37.600.

23

Portions of the CFTC guidance have been incorporated into certain rules being adopted
by the Commission in Regulation SE. The CFTC guidance clarifies portions of its rules
by suggesting means for compliance and does not fundamentally alter those rules.
Therefore, the Commission believes that no adjustments to the CFTC burden estimates,
9

aggregate CFTC estimate of 387 hours per SEF per year serves as a reasonable estimate for the
annual hourly burden on each SBSEF. For reference, the following table lists all sections of
part 37 not related to registration and the corresponding SBSEF rule.
Section of 17 CFR part 37

Topic

Analogous SBSEF Rule

(387 aggregate burden
hours per SEF not
including § 37.3
(registration)

37.1
37.2
37.4
37.5
37.6
37.7
37.8
37.9
37.10
37.11
37.12
37.100
37.200-37.206
37.300-37.301
37.400-37.408

37.500-37.504
37.600-37.601

scope
applicable provisions
procedures for listing
products
compliance
enforceability
prohibited use of data
entities operating as SEFs
and DCMs
methods of execution
process to make swaps
available for trade
reserved section
trade execution compliance
schedule
CP 1 (compliance with
Core Principles)
CP 2 (compliance with
rules)
CP 3 (manipulation)
CP 4 (monitoring of
trading and trade
processing)
CP 5 (ability to obtain
information)
CP 6 (position limits)

(387 aggregate burden
hours per SBSEF not
including Rule 803
(registration) and certain
other rules not modeled on
part 37 rules (discussed
separately in the following
sections)
800
801
810
811
812
813
814
815
816
not applicable
817
818 (CP1)
819 (CP2)
820 (CP3)
821 (CP4)

822 (CP5)
no equivalent requirement
in the SEA; CP numbering
diverges after this point

on which the Commission is basing its own estimates, would be appropriate as a result of
adapting the CFTC guidance into the Commission’s rules.
10

37.700-37.703
37.800-37.801
37.900-37.901
37.1000-37.1001
37.1100-37.1101
37.1200
37.1300-37.1307
37.1400-37.1401
37.1400-1501
Appendix A (Form SEF)
Appendix B

CP 7 (financial integrity of
transactions)
CP 8 (emergency
authority)
CP 9 (publication of
trading information)
CP 10 (recordkeeping and
reporting)
CP 11 (anti-trust)
CP 12 (conflicts of
interest)
CP 13 (financial resources)
CP 14 (system safeguards)
CP 15 (CCO)
Form SEF
Guidance relating to Core
Principles

823 (CP6)
824 (CP7)
825 (CP 8)
826 (CP 9)
827 (CP10)
828 (CP 11)
829 (CP 12)
830 (CP 13)
831 (CP 14)
Form SBSEF24
Guidance incorporated
throughout rules 818-831

In response to comments received, the Commission revised Rules 815, 819, and 825 prior
to adoption. The remainder of the rules in the table above were not revised. As described in more
detail in the following paragraphs, the revisions did not result in a net increase or a net decrease
in the burden hours for Rules 815, 819, and 825. Therefore, the aggregate estimate for this
collection did not change.
Rule 815 generally addresses how transactions are executed on an SBSEF. Paragraph (d)
provides an exception for “package transactions” that allows for flexible methods of execution.
In response to concerns expressed by commenters, the Commission modified Rule 815(d) to
narrow the scope of the exception. Another commenter expressed concerns about the identity of
parties to a trade being revealed even in cases where a trade that was intended to be cleared was
not accepted for by a clearing agency. To address this concern, the Commission added section
(g) to declare such trades void from the outset. Lastly, the Commission removed several
mentions of the term “block trade” from Rule 815 before adoption, as that term will be reserved
and not defined in Regulation SE. None of these changes increase or decrease the hours burden
associated with this rule.
Rule 819 generally addresses compliance with the core principles enumerated in
Regulation SE. Paragraph (e) addresses what type of entities can be contracted to provide
regulatory services for an SBSEF. In response to a commenter’s request, the Commission
amended Rule 819(e) before adoption to permit “Designated Contract Markets” to provide such
services. The Commission also added section (c)(4) and (g)(14) to Rule 819 to address
Commission review of certain actions taken by an SBSEF. This new flexibility does not increase
or decrease the hours burden associated with this rule.

24

The burdens of registering using Form SBSEF are discussed in the previous section.
11

Rule 825 generally addresses the publication of certain trading information. Paragraph (c)
requires the publication on an SBSEF of a “Daily Market Data Report.” Several commenters
expressed concerns about the content and the timing of publication of the Daily Market Data
Report. In response to comments, the Commission modified Rule 825 prior to adoption to make
changes to what type of information is required to be submitted in the report and also to adjust
the timing of publication of the report. Additionally, the Commission removed several mentions
of the term “block trade” from Rule 825 before adoption, as that term will be reserved and not
defined in Regulation SE. These changes do not increase or decrease the hours burdens
associated with this rule.
The Commission estimates that each Respondent will incur an ongoing reporting
burden of approximately 387 hours, for an aggregate annual industry reporting burden for
all five Respondents of approximately 1,935 hours.25
c.

Rule and product filing processes including cover sheet (Rules 804-807)
modeled on CFTC part 40

A number of rules contained in Regulation SE are modeled after rules in part 40 of the
CFTC’s rules, including §§ 40.2 (Listing products for trading by certification), 40.3 (Voluntary
submission of new products for Commission review and approval), 40.5 (Voluntary submission
of rules for Commission review and approval), and 40.6 (Self-certification of rules). The
Commission adopted Rules 804, 805, 806, and 807—which are closely modeled on §§ 40.2,
40.3, 40.5, and 40.6, respectively—in order to harmonize with the procedures that the CFTC
applies to SEFs with respect to establishing new rules and listing products. In addition, Rule 808
is modeled after § 40.8 and provides that certain information in a Form SBSEF application or a
rule or product filing would be made publicly available, notwithstanding the SBSEF’s request for
confidential treatment. The Commission preliminarily estimated that each Respondent would
incur an ongoing reporting burden of approximately 60 hours, for an aggregate annual industry
reporting burden for all five Respondents of approximately 300 hours.26
In response to concerns expressed by commenters, the Commission provided additional
clarification in the Regulation SE Adopting Release, explaining that, where a respondent is
seeking to list a new category of product of which there would be multiple specific products
based on different underlying securities, separate submissions under Rule 804 with respect to
each underlying security would not necessarily be required, but a submission made with respect
to multiple underlying securities would have to address why each of the included underlying
securities meets the relevant standards required by Regulation SE. “Blanket” certifications—e.g.,
a single submission for all equity total return security-based swaps to be listed—would not meet
the requirements of Rule 804. The Commission does not believe that this flexibility will result in
any increase or decrease in burden hours. Any time savings from the ability to combine
submissions under Rule 804 is likely to be substantially, if not fully, offset by the burden of
drafting the explanation of why each of the included underlying securities meets the relevant
standards required by Regulation SE. Therefore, the changes do not increase or decrease the
25

387 hours per respondent x 5 respondents = 1,935 hours.

26

60 hours per respondent x 5 respondents = 300 hours.
12

burden hours for compliance with the rules pertaining to new product filings under Rules 804
and 805. Indeed, as described above, the per-respondent estimate for the requirements related to
the rule and product filing processes of 60 hours was an estimate informed by the CFTC’s
similar provisions and was meant to encompass the combined burdens that an SBSEF would
incur to comply with the rule and product filing processes in Rules 804, 805, 806, and 807.
Therefore, the Commission continues to estimate the per-respondent and aggregate totals to be
60 hours and 300 hours, respectively.
The Commission estimates that each Respondent will incur an ongoing reporting
burden of approximately 60 hours, for an aggregate annual industry reporting burden for
all five Respondents of approximately 300 hours.27
d.

Rule 809

Rule 809 is loosely modeled on § 40.12 of the CFTC’s rules and sets forth a mechanism
for addressing a situation where an SBSEF wishes to list a novel derivative product and it is
unclear whether the product properly falls under the jurisdiction of the SEC or the CFTC. Rule
809 provides a mechanism for the staying or tolling of a filing by an SBSEF relating to a product
while the appropriate jurisdictional classification of that product is determined.
The Commission estimates that each Respondent will incur an ongoing reporting
burden of approximately .25 hour, for an aggregate annual industry reporting burden for
all five Respondents of approximately 1.25 hours.28
e.

Rule 811(d)

Section 1.60 of the CFTC’s rules requires a SEF to provide the CFTC with copies of any
legal proceeding to which it is a party, or to which its property or assets is subject. Paragraph (d)
of Rule 811 adapts paragraphs (a), (c), and (e) of § 1.60 to apply to SBSEFs. Paragraph (d)(1)
requires an SBSEF to provide the Commission a copy of the complaint, any dispositive or
partially dispositive decision, any notice of appeal filed concerning such decision, and such
further documents as the Commission may thereafter request filed in any material legal
proceeding to which the SBSEF is a party or its property or assets is subject. Paragraph (d)(2)
requires an SBSEF to provide notices of similar actions against any officer, director, or other
official of the SBSEF from conduct in such person’s capacity as an official of the SBSEF
alleging violations of certain enumerated actions.
The Commission estimates that each Respondent will incur an ongoing reporting
burden of approximately 0.25 hours, for an aggregate annual industry reporting burden
for all five Respondents of approximately 1.25 hour.29
27

60 hours per respondent x 5 respondents = 300 hours.

28

0.25 hour per respondent x 5 respondents = 1.25 hours.

29

0.25 hours per respondent x 5 respondents = 1.25 hour. Although the Commission
received no comments on this part of the collection, the Commission has adjusted its
estimate from 0.20 hours per respondent to 0.25 hours per respondent because the CFTC
13

f.

Rule 819(i)

Paragraph (i) of Rule 819 bars persons with specified disciplinary histories from serving
on the governing board or committees of an SBSEF and imposes certain other duties on the
SBSEF associated with that fundamental requirement. Rule 819(i) is modeled on § 1.63 of the
CFTC’s rules. The Commission estimates that an SBSEF will provide the information required
by Rule 819(i) once per year, and that each submission will take 79.83 hours. The Commission is
basing its estimate on the one that the CFTC included in its submission to OMB for its adoption
of § 1.63, where the CFTC estimated that each respondent would make, on average, one
submission to the CFTC per year. The CFTC further estimated that the time required to prepare
one submission is approximately 79.83 hours.30
The Commission estimates that each Respondent will incur an ongoing reporting
burden of approximately 79.83 hours, for an aggregate annual industry reporting burden
for all five Respondents of approximately 399.15 hours.31
g.

Rule 819(j)

Paragraph (j) of Rule 819 is modeled on § 1.67 of the CFTC’s rules. Rule 819(j)(1)
provides that, upon any final disciplinary action in which an SBSEF finds that a member has
committed a rule violation that involved a transaction for a customer, whether executed or not,
and that resulted in financial harm to the customer, the SBSEF must promptly provide written
notice of the disciplinary action to the member.
The Commission estimates that an SBSEF will need 0.5 hours to prepare a notice and
provide it to a member. This estimate is based on a previous Commission estimate for the time
that it would take to prepare and submit a simple notice.32 The Commission estimates that these
notices will occur once per year at each SBSEF. The estimate of once per year is based on a
previous CFTC estimate included in its submission to OMB for § 1.67 along with other rules.

made a similar adjustment in 2021 to its analogous rule in § 1.60 of the CFTC’s rules.
See OMB, Supporting Statement for New and Revised Information Collections: OMB
Control Number 3038-0033 (Oct. 29, 2021), available at https://omb.report/icr/2021103038-001/doc/115991000.pdf.
30

See CFTC, Service on Self-Regulatory Organization Governing Boards or Committees by
Persons with Disciplinary Histories (Feb. 27, 1990), 55 FR 7884, 7890 (Mar. 6, 1990)
(final rule PRA for § 1.63).

31

79.83 hours per respondent x 5 respondents = 399.15 hours.

32

Rule 819(j) would not address any of the requirements or process concerning taking final
disciplinary actions; it merely requires that a notice be provided. A provision of
Regulation SCI, Rule 1000(b)(4)(i), also requires providing a simple notice and the
Commission estimated that it would take 0.5 hours to prepare and such a notice. See
Regulation Systems Compliance and Integrity; Final Rule, SEA Release No. 73639
(Nov. 19, 2014), 79 FR 72251, 72381 (Dec. 5, 2014).
14

The Commission estimates that each Respondent will incur an ongoing reporting
burden of approximately 0.5 hours, for an aggregate annual industry reporting burden for
all five Respondents of approximately 2.5 hours.33
h.

Rule 826(f)

Rule 826(f) is modeled on § 1.37(c) of the CFTC’s rules and requires an SBSEF to keep a
record in permanent form, which shall show the true name, address, and principal occupation or
business of any non-U.S. member that executes transactions on the SBSEF and must, upon
request, provide to the Commission information regarding the name of any person guaranteeing
such transactions or exercising any control over the trading of such non-U.S. member.
The Commission estimates that each SBSEF will need to update information required by
Rule 826(f) once per year, and that each submission will take 0.4 hours. The Commission is
basing its estimate on the estimate included by the CFTC in its submission to OMB regarding
§ 1.37(c) of the CFTC’s rules, where the CFTC estimated that it would take a SEF 0.4 hours to
prepare each record in accordance with regulation § 1.37(c).
The Commission estimates that each Respondent will incur an ongoing
recordkeeping burden of approximately 0.4 hours, for an aggregate annual industry
recordkeeping burden for all five Respondents of approximately 2 hours.34
i.

Rule 833

Rule 833 describes how foreign SBS trading venues (or persons acting on their behalf)
could obtain exemptions from the SEA definitions of “exchange,” “security-based swap
execution facility,” and “broker” and how SBS executed on a foreign trading venue could
become exempt from the SEA’s trade execution requirement. Based on the CFTC’s experience
in the SEF market, the Commission estimates that there will be three requests for an exemption
order under either or both paragraphs (a) and (b) of Rule 833 in the first year and 2 requests in
each subsequent year; and that each submission will require an initial, one-time burden of 80
hours.35 Once an exemption has been granted to an applicant, no further action is required.
Therefore, during the renewal period, the Commission estimates 7 respondents (3 in year 1, 2 in
year 2, and 2 in year 3). All 7 respondents will not incur burdens immediately at the beginning
on the renewal period, however, as a conservative estimate, and because it is not certain when
respondents will incur burdens, the Commission is assuming that all 7 respondents will incur the
80 hour burden (80 hours total, 26.67 hours annualized over the three-year renewal period).
The Commission estimates that each Respondent will incur an initial one-time
annualized reporting burden of approximately 26.67 hours, for an aggregate initial one-

33

0.5 hours per respondent x 5 respondents = 2.5 hours.

34

0.4 hours per respondent x 5 respondents = 2 hour.

35

See Regulation SE Proposing Release, supra note 1, 87 FR at 28968.
15

time annualized industry reporting burden for all seven Respondents of approximately
186.67 hours.36
j.

Rule 834(b)-(c)

Rule 834 provides that each SBSEF and SBS exchange must create and maintain rules to
mitigate conflicts of interest between SBSEFs and SBS exchanges and their members, including
by prohibiting members from owning 20% or more of the voting rights of an SBSEF or SBS
exchange and from exercising disproportionate influence in disciplinary proceedings. Rule 834
also requires each SBSEF and SBS exchange to submit to the Commission after every governing
board election a list of each governing board’s members, the groups they represent, and how the
composition of the board complies with the requirements of Rule 834. Paragraph (b) sets forth
details concerning the 20% cap and paragraph (c) includes requirements designed to reinforce
the 20% cap in paragraph (b). The Commission preliminarily estimated that proposed Rules
834(b) and (c) together would have an initial, one-time paperwork burden of 15 hours per entity,
or 5 hours annualized (i.e., 15 hours divided by three for the three-year renewal period),
associated with drafting and implementing any such rules. The estimated number of entities
is 8.37
In response to concerns expressed by commenters, the Commission modified Rule 834
by adding new paragraph (b)(3) to provide an exemption from the 20% cap for an SBSEF that
has entered into an agreement with a registered futures association or a national securities
association for the provision of regulatory services that encompass, at a minimum, real-time
market monitoring and investigations and investigation reports. The Commission does not
believe that the addition of paragraph (b)(3) affects its preliminary burden estimate. Specifically,
the modification does not affect the information collection under this rule, as it does not involve
any record keeping, reporting, or third-party disclosure obligations. Thus, the Commission is not
altering its estimate of an initial, one-time paperwork burden of 15 hours per entity, or 5 hours
annualized (i.e., 15 hours divided by three for the three-year renewal period), The estimated
number of entities is 8.38
The Commission estimates that each Respondent will incur an initial one-time
annual recordkeeping burden of approximately 5 hours, for an aggregate initial one-time
annual industry recordkeeping burden for all eight Respondents of approximately 40
hours.39
k.

Rule 834(d)-(g)

Paragraph (d) of Rule 834 is designed to mitigate conflicts of interest in the disciplinary
process of an SBSEF or SBS exchange. Paragraph (e) requires each SBSEF and SBS exchange
to ensure that 20% or more of the persons who are eligible to vote routinely on matters being
36

26.67 hours per respondent x 7 respondents = 186.67 hours.

37

These entities consist of 5 SBSEFs and 3 SBS exchanges.

38

These entities consist of 5 SBSEFs and 3 SBS exchanges.

39

15 hours per respondent x 8 respondents = 120 hours.
16

considered by the governing board are persons who are knowledgeable of SBS trading or
financial regulation, or otherwise capable of contributing to governing board deliberations. It
also requires each SBSEF and SBS exchange to ensure that membership of its governing board
includes a diversity of groups or classes of its members. Paragraph (f) of Rule 834 requires each
SBSEF and SBS exchange to submit to the Commission, within 30 days after each governing
board election, a list of the governing board’s members, the groups or classes of members that
they represent, and how the composition of the governing board otherwise meets the
requirements of Rule 834. Paragraph (g) of Rule 834 requires an SRO to further address the
avoidance of conflicts of interest in the execution of its self-regulatory functions.
The Commission estimates that each Respondent will incur an ongoing reporting
burden of approximately 3.25 hours, for an aggregate annual industry reporting burden
for all eight Respondents of approximately 26 hours.40
l.

Rule 835

Rule 835 provides that, if an SBSEF issues a final disciplinary action against a member,
or takes final action with respect to a denial or conditioning membership, or takes final action
with respect to a denial or limitation of access of a person to any services offered by the SBSEF,
the SBSEF shall file a notice of such action with the Commission within 30 days and serve a
copy on the affected person. The Commission estimates that it will take 0.5 hours to prepare this
notice and provide it to the Commission and the affected person. This estimate is based on a
previous Commission estimate for the time that it would take to prepare and submit a simple
notice.41 The Commission believes that it will take an additional 0.25 hours to create and serve a
copy of that notice on the affected person. The Commission estimates that there will be 5
respondents. The Commission estimates that each respondent will make a response monthly
resulting in 12 responses per year per respondent.
The Commission estimates that each Respondent will incur an ongoing reporting
burden of approximately 9 hours, for an aggregate annual industry reporting burden for
all five Respondents of approximately 45 hours.42
13.

Costs to Respondents

The Commission does not estimate any costs to respondents.

40

3.25 hours per respondent x 8 respondents = 26 hours.

41

A provision of Regulation SCI, Rule 1000(b)(4)(i), also requires providing a simple
notice, and the Commission estimated that it would take 0.5 hours to prepare and such a
notice. See Regulation Systems Compliance and Integrity; Final Rule, SEA Release No.
73639 (Nov. 19, 2014), 79 FR 72251, 72381 (Dec. 5, 2014).

42

12 responses annually (once per month) per respondent x .75 hours per response x 5
respondents = 45 hours.
17

14.

Cost to Federal Government

The federal government will not incur a cost in connection with the collection of this
information.
15.

Changes in Burden

The only change to the burdens estimates is in Rule 811(d). The per respondent burden of
Rule 811(d) was increased from 0.20 hours to 0.25 per respondent due to a similar upward
revision in the analogous CFTC rule (§ 1.60 of the CFTC’s rules). This revision resulted in a
yearly increase of .25 hours ((0.25-0.20) x 5 respondents) from 1 hour annually to 1.25 hours
annually. The new revised figure is reflected in the chart at the beginning of Section 12 of this
supporting statement.43 We also modified the information collection titles to remove the word
“proposed” to reflect that the revisions have been adopted.
16.

Information Collection Planned for Statistical Purposes

Not applicable. The information collection is not used for statistical purposes.
17.

OMB Expiration Date Display Approval

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

Exceptions to Certification for Paperwork Reduction Act Submissions

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

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

43

The burden is still shown in ROCIS as 1 hour, as burdens are rounded to the nearest
whole number.
18