90 Fr 7250

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

SECURITIES AND EXCHANGE
COMMISSION
17 CFR Parts 202, 232, 240, 249, and
249b
[Release Nos. 33–11342; 34–101925; IC–
35420; File No. S7–08–23]
RIN 3235–AL85

Electronic Submission of Certain
Materials Under the Securities
Exchange Act of 1934; Amendments
Regarding the FOCUS Report
Securities and Exchange
Commission.
ACTION: Final rule.
AGENCY:

The Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’)
is amending its rules to require
electronic filing or submission of certain
forms and other filings or submissions
that are required to be filed with or
submitted to the Commission under the
Securities Exchange Act of 1934
(‘‘Exchange Act’’) and the rules and
regulations under the Exchange Act.
The amendments require the electronic
filing or submission on the
Commission’s Electronic Data
Gathering, Analysis, and Retrieval
(‘‘EDGAR’’) system, using structured
data where appropriate, for certain
forms filed or submitted by selfregulatory organizations (‘‘SROs’’). The
amendments require the information
currently contained in Form 19b–4(e) to
be publicly posted on the SRO’s website
and remove the manual signature
requirements for SRO proposed rule
change filings. The Commission is also
requiring that a clearing agency post
supplemental material to its website. In
addition, the Commission is amending
rules under the Exchange Act and the
Securities Act of 1933 (‘‘Securities Act’’)
to require the electronic filing or
submission on EDGAR, using structured
data where appropriate, of certain
forms, reports, and notices provided by
broker-dealers, security-based swap
dealers, and major security-based swap
participants. The amendments also
require withdrawal in certain
circumstances of notices filed in
connection with an exception to
counting certain dealing transactions

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SUMMARY:

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toward determining whether a person is
a security-based swap dealer. Finally,
the Commission is allowing electronic
signatures in certain broker-dealer
filings, and amending the Financial and
Operational Combined Uniform Single
Report (‘‘FOCUS Report’’) to harmonize
with other rules, make technical
corrections, and provide clarifications.
DATES:
Effective date: March 24, 2025.
Compliance dates: The compliance
dates for the rule amendments are
discussed in section VIII of this release.
FOR FURTHER INFORMATION CONTACT: For
Form 1—Justin Pica, Assistant Director,
and David Remus, Special Counsel; for
Form 1–N—David Dimitrious, Senior
Special Counsel, and Michou Nguyen,
Special Counsel; for Form 15A—Molly
Kim, Assistant Director, and David
Michehl, Special Counsel; for Form CA–
1—Matthew Lee, Assistant Director, and
Claire Noakes, Senior Special Counsel;
for Form 19b–4(e) and technical
amendment to Form 19b–4—Cristie
March, Senior Special Counsel, and
Edward Cho, Special Counsel; for Rule
17a–22—Matthew Lee, Assistant
Director, and Susan Petersen, Special
Counsel; for Rule 17a–5, Rule 17a–12,
Rule 18a–7, Form X–17A–5 Part III and
related annual filings, Form X–17A–5
Parts II, IIA, and IIC, Form 17–H, and
Form X–17A–19—Raymond A.
Lombardo, Assistant Director, and
Valentina Minak Deng, Special Counsel;
for notices provided pursuant to Rule
3a71–3(d)(1)(vi) and Rule 15fi–3(c)—
Carol McGee, Associate Director; John
Guidroz, Assistant Director, and Israel
Goodman, Senior Counsel; and for
reports submitted pursuant to Rule
15fk–1(c)(2)(ii)(A), Kelly Shoop, Branch
Chief, and Patrick Bloomstine, AttorneyAdviser, Division of Trading and
Markets, at (202) 551–5500, Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549.
SUPPLEMENTARY INFORMATION: The
Commission is amending its rules to
require the electronic filing or
submission, using structured data where
appropriate, of certain forms and other
filings,1 which are currently filed with
1 For purposes of this release, the term ‘‘form’’
means any Commission-created document labeled

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or submitted to the Commission in
paper or via email or are new filing
requirements. This release is divided
into five parts: (1) forms that are filed or
submitted by or otherwise made
available electronically by SROs
(‘‘Covered SRO Forms’’); (2)
supplementary materials (‘‘Covered
Supplementary Materials’’) required to
be posted on the internet websites of
clearing agencies; (3) forms and related
filings filed or submitted by brokerdealers and over-the-counter derivatives
dealers (‘‘OTC derivatives dealers’’), as
well as security-based swap dealers
(‘‘SBSDs’’) and major security-based
swap participants (‘‘MSBSPs’’) (each
SBSD and each MSBSP also referred to
as an ‘‘SBS Entity’’ and together referred
to as ‘‘SBS Entities’’); (4) other notices,
filings, and reports consisting of (a)
Form X–17A–19; (b) 17 CFR 240.3a71–
3(d)(1)(vi) (‘‘Rule 3a71–3(d)(1)(vi)’’)
Notices; (c) 17 CFR 240.15Fi–3(c) (‘‘Rule
15fi–3(c)’’) Notices; and (d) 17 CFR
240.15Fk–1(c)(2)(ii)(A) (‘‘Rule 15fk–
1(c)(2)(ii)(A)’’) Compliance Reports; and
(5) amendments regarding the FOCUS
Report, that, among other things, would
modernize signature requirements in
Exchange Act Rules 17a–5, 17a–12, and
18a–7.2 The Commission is adopting
amendments to or relating to the
following rules:
as a ‘‘Form’’ that is required to be submitted or filed
electronically, and the term ‘‘filing’’ means any
form, notice, report, or material required to be
submitted or filed electronically or required to be
posted on an internet website in lieu of being
submitted or filed.
2 The Commission’s release also includes
amendments to CFR designations in order to ensure
regulatory text conforms more consistently with
section 2.13 of the Document Drafting Handbook.
See Office of the Federal Register, Document
Drafting Handbook (Aug. 2018 Edition, Revision
2.1, dated Oct. 2023), available at https://
www.archives.gov/files/federal-register/write/
handbook/ddh.pdf. For rules being amended in this
release that contain an uppercase letter in their CFR
citations (other than temporary rules like 17 CFR
240.17h–2T), the Commission is amending their
CFR section designations to replace each such
uppercase letter with the corresponding lowercase
letter, and, in one case, to also redesignate the rule
numbering. For example, 17 CFR 240.15Fi–3 is
being redesignated as 17 CFR 240.15fi–3, 17 CFR
240.15Fk–1 is being redesignated as 17 CFR
240.15fk–1, 17 CFR 240.15Aa–1 is being
redesignated as 17 CFR 240.15aa–1, and 17 CFR
240.15Aj–1 is being redesignated as 17 CFR
240.15aa–2.

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Commission Reference

CFR Citation
(17 CFR)
§ 202.3

Administrative Practice and
Rule 202.3
Procedure, Securities
Securities Act of 1933 ("Securities Act") 3
Regulation S-T
Rule 100
Rule 101

§232.100
§232.101

Rule 201
Rule 202
Rule 405
Securities Exchange Act of 1934 ("Exchange Act") 4
Rule 3a71-3
Rule 6a-1
Rule 6a-2
Rule 6a-3
Rule 6a-4
Rule 15aa-1
Rule 15aa-2
Rule 15fi-3
Rule 15fk-1
Rule 17a-5
Rule 17a-12
Rule 17a-19
Rule 17a-22-Rule 17ab2-1
Rule 17h-2T
Rule 18a-7
Rule 19b-4
Rule 24b-2
Form 1
Form 1-N
Form CA-I
Form 17-H
FormX-17A-5 Part II
Form X-17A-5 Part IIA
Form X-17A-5 Part IIC
FormX-17A-5 Part III
Form X-17A-19
Form X-15AA-1
Form 15A
Form 19b-4

§ 232.201
§ 232.202
§ 232.405

§ 240.3a71-3
§ 240.6a-1
§ 240.6a-2
§ 240.6a-3
§ 240.6a-4
§ 240.15aa-1
§ 240. l 5aa-2
§ 240.15fi-3
§ 240.15fk-1
§ 240.l 7a-5
§ 240.17a-12
§ 240.17a-19
§ 240.17a-22
§ 240.17ab2-1
§ 240. l 7h-2T
§ 240.18a-7
§ 240.19b-4
§ 240.24b-2
§ 249.1
§249.10
§ 249.200
§ 249.328T
§ 249.617
§ 249.617
§ 249.617
§ 249.617
§ 249.635
§ 249.801
§ 249.801 (as amended)
§ 249.819

Finally, the Commission is
rescinding:

3 See

15 U.S.C. 77a through 77mm.

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4 See

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Exchange Act

Form X-15AJ-1
Form X-15AJ-2
Form 19b-4(e)

In developing this release with regard
to SBS Entities, the Commission has
consulted and coordinated with the
CFTC and the prudential regulators in
accordance with the Dodd-Frank Wall
Street Reform and Consumer Protection
Act (‘‘Dodd-Frank Act’’).5

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Table of Contents
I. Introduction
A. Experience With Targeted Regulatory
Assistance During the COVID–19
Pandemic
B. Covered SRO Forms
C. Covered Supplementary Materials
D. Filings by Broker-Dealers, OTC
Derivatives Dealers, SBSDs, and MSBSPs
E. Other Forms, Reports, or Notices
F. Structured Data Requirements
G. Amendments Regarding the FOCUS
Report and Signature Requirements in
Rule 17a–5, 17a–12, and 18a–7 Filings
II. Requirements to Electronically File
Covered SRO Forms
A. Form 1
1. Relevant Statutory Framework
2. Previous Requirements for Filing Form
1
3. Requirement to Electronically File Form
1
B. Form 1–N
1. Relevant Statutory Framework
2. Previous Requirements for Filing Form
1–N
3. Requirement to Electronically File Form
1–N
C. Form 15A
1. Relevant Statutory Framework
2. Previous Requirements for Filing Forms
X–15AA–1, X–15AJ–1, and X–15AJ–2
3. Requirements to Electronically File on
Form 15A Information Previously Filed
on Forms X–15AA–1, X–15AJ–1, and X–
15AJ–2
D. Form CA–1
1. Relevant Statutory Framework
2. Pre-Existing Requirements for Filing
Form CA–1
3. Comment Regarding Proposed Changes
to Rule 17ab2–1 and Form CA–1
4. Requirement to Electronically File Form
CA–1
5. Amendments to Rule 17ab2–1
6. Amendments to Form CA–1 and the
Form CA–1 Instructions
E. Form 19b–4(e)
1. Relevant Statutory Framework
5 See Public Law 111–203, 124 Stat. 1376 (2010).
Section 712(a)(2) of the Dodd-Frank Act provides in
part that the Commission shall ‘‘consult and
coordinate to the extent possible with the
Commodity Futures Trading Commission and the
prudential regulators for the purposes of assuring
regulatory consistency and comparability, to the
extent possible.’’

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CFR Citation
(17 CFR)
§ 249.802
§ 249.803
§ 249.820

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2. Background of Rule 19b–4(e)
3. Previous Requirements for Filing Form
19b–4(e)
4. Rescission of Form 19b–4(e)
F. Rule 19b–4(j) and Form 19b–4
1. Relevant Statutory Framework
2. Rule Change
G. Conforming Technical Amendment to
Rule 202.3(b) Under the Exchange Act
III. Requirements for Clearing Agencies to
Electronically File Covered
Supplemental Materials
A. Preexisting Rule 17a–22
B. Amended Rule 17a–22
1. Two-Day Timeframe for Compliance
2. Scope of Supplemental Materials
3. Meaning of ‘‘Generally Available’’
4. Requirement to ‘‘Prominently Post’’
IV. Requirements to Electronically File
Broker-Dealer, OTC Derivatives Dealer,
and SBS Entity Reports
A. Rules 17a–5, 18a–7, and 17a–12
B. Rule 17h–2T and Form 17–H
V. Other Forms, Reports, or Notices
A. Notices Pursuant to Rule 17a–19 and
Form X–17A–19
B. Notice (and Any Withdrawal of a
Notice) Filed Pursuant to Rule 3a71–
3(d)(1)(vi)
1. Proposed Rule
2. Amended Rule
C. Notice (and Any Amendment, including
Notice of Dispute Termination) Provided
Pursuant to Rule 15fi–3(c)
1. Proposed Rule
2. Amended Rule
D. Compliance Reports Submitted to the
Commission pursuant to Rule 15fk–
1(c)(2)(ii)(A)
1. Proposed Rule
2. Final Rule
VI. Amendments Regarding the FOCUS
Report and Signature Requirements in
Rule 17a–5, 17a–12, and 18a–7 Filings
A. Corrective and Clarifying Amendments
to the FOCUS Report
B. Harmonizing FOCUS Report Part IIC
With the Call Report
C. OTC Derivatives Dealer FOCUS Report
Filing Requirement
D. Signature Requirements in Rule 17a–5,
17a–12, and 18a–7 Filings
1. Number of Signatures on FOCUS Report
2. Electronic Signatures in Rule 17a–5,
17a–12, and 18a–7 Filings
VII. Amendments to Regulation S–T
(Including Structured Data
Requirements) and Rule 24b–2
A. Amendments to Regulation S–T
(Including Structured Data
Requirements)
B. Amendments to Rule 24b–2
VIII. Compliance Dates
IX. Paperwork Reduction Act
A. Summary of Collection of Information
1. Form ID

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2. Rules 6a–1, 6a–2, 6a–3, and Form 1
3. Rule 6a–4 and Form 1–N
4. Rules 15aa–1 and 15aa–2; Form 15A
5. Rule 17ab2–1 and Form CA–1
6. Rule 19b–4(e) and Form 19b–4(e)
7. Rule 19b–4(j) and Form 19b–4
8. Rule 17a–22
9. Rules 17a–5, 18a–7, and 17a–12
10. Rule 17h–2T
11. Rule 17a–19 and Form X–17A–19
12. Rule 3a71–3(d)(1)(vi)
13. Rule 15fi–3(c)
14. Rule 15fk–1(c)(2)(ii)(A)
B. Use of Information
1. Form ID
2. Rules 6a–1, 6a–2, 6a–3, and Form 1
3. Rule 6a–4 and Form 1–N
4. Rules 15aa–1 and 15aa–2; Form 15A
5. Rule 17ab2–1 and Form CA–1
6. Rule 19b–4(e) and Form 19b–4(e)
7. Rule 19b–4(j) and Form 19b–4
8. Rule 17a–22
9. Rules 17a–5, 18a–7, and 17a–12
10. Rule 17h–2T
11. Rule 17a–19 and Form X–17A–19
12. Rule 3a71–3(d)(1)(vi)
13. Rule 15fi–3(c)
14. Rule 15fk–1(c)(2)(ii)(A)
C. Respondents
1. Form ID
2. Rules 6a–1, 6a–2, 6a–3, and Form 1
3. Rule 6a–4, Form 1–N
4. Rules 15aa–1 and 15aa–2; Form 15A
5. Rule 17ab2–1, Form CA–1
6. Rule 19b–4(e), Form 19b–4(e)
7. Rule 19b–4(j), Form 19b–4
8. Rule 17a–22
9. Rules 17a–5, 18a–7, and 17a–12
10. Rule 17h–2T
11. Rule 17a–19 and Form X–17A–19
12. Rule 3a71–3(d)(1)(vi)
13. Rule 15fi–3(c)
14. Rule 15fk–1(c)(2)(ii)(A)
D. Total Initial and Annual Reporting and
Recordkeeping Burdens
1. Form ID
2. Rules 6a–1, 6a–2, 6a–3 and Form 1
3. Rule 6a–4, Form 1–N
4. Rules 15aa–1 and 15aa–2; Form 15A
5. Rule 17ab2–1, Form CA–1
6. Rule 19b–4(e), Form 19b–4(e)
7. Rule 19b–4(j), Form 19b–4
8. Rule 17a–22
9. Rules 17a–5, 18a–7, and 17a–12
10. Rule 17h–2T
11. Rule 17a–19 and Form X–17A–19
12. Rule 3a71–3(d)(1)(vi)
13. Rule 15fi–3(c)
14. Rule 15fk–1(c)(2)(ii)(A)
E. Collection of Information is Mandatory
F. Confidentiality of Responses to
Collection of Information
G. Retention Period for Recordkeeping
Requirements
X. Economic Analysis
A. Broad Economic Considerations

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
B. Baseline
1. Affected Entities
2. Paper and Limited Electronic
Submission
3. Structured Data
C. Economic Effects
1. Benefits
2. Costs
D. Efficiency, Competition, and Capital
Formation
E. Reasonable Alternatives
1. Exempt Certain Entities or Disclosures
From Structured Data Requirements
2. Require Structured Data on Form 1–N,
Form 15A, and ANE Exception Notices
to Same Extent as Structured Documents
3. Replace Inline XBRL Requirements With
Custom XML Requirements or Vice
Versa
4. Require Structured Data Languages
Other Than Inline XBRL and Custom
XML
5. Permit, Not Require, Structured Data for
Affected Documents
6. Exempt Smaller Entities from Electronic
Submission or Posting Requirements
7. Require SROs To Submit Form 19b–4(e)
via EDGAR
8. Require the Use of Dedicated Mailbox
XI. Final Regulatory Flexibility Act Analysis
A. Regulatory Flexibility Act Certification
B. Regulatory Flexibility Act Analysis
1. Need for, and Objectives of, the Final
Amendments
2. Significant Issues Raised by Public
Comments
3. Small Entities Subject to Final
Amendments
4. Projected Reporting, Recordkeeping, and
Other Compliance Requirements
5. Significant Alternatives
XII. Other Matters
Statutory Authority

I. Introduction

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A. Experience With Targeted Regulatory
Assistance During the COVID–19
Pandemic
As part of its response to the COVID–
19 pandemic, the Commission and its

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staff provided assistance and regulatory
relief to market participants, as
appropriate, to facilitate the continued
orderly and fair functioning of the
securities markets.6 As part of these
efforts, Division of Trading and Markets
(‘‘Division’’) staff issued a statement
providing that the staff would not
recommend enforcement action if filers
and registrants made alternative
arrangements, as detailed in the
statement, for delivery, execution, and
notarization of certain paper filings.7
More specifically, the staff stated that it
would not recommend that the
Commission take enforcement action
with respect to any failure to comply
with the paper format submission
requirement or manual signature
requirement of certain ‘‘Impacted Paper
Submissions’’ (as defined in the
Updated Staff Statement), which
included, but were not limited to,
6 See generally, e.g., An Update on the
Commission’s Targeted Regulatory Relief to Assist
Market Participants Affected by COVID–19 and
Ensure the Orderly Function of our Markets (public
statement by Chairman Jay Clayton, William
Hinman, Director, Division of Corporation Finance,
Dalia Blass, Director, Division of Investment
Management, Brett Redfearn, Director, Division of
Trading and Markets (Jan. 26, 2020, updated Jan. 5,
2021)), available at https://www.sec.gov/news/
public-statement/update-commissions-targetedregulatory-relief-assist-market-participants.
7 See generally Division Updated Staff Statement
Regarding Certain Paper Submissions in Light of
COVID–19 Concerns (‘‘Updated Staff Statement’’),
available at https://www.sec.gov/tm/papersubmission-requirements-covid-19-updates-061820.
Staff reports, Investor Bulletins, and other staff
documents cited in this release represent the views
of Commission staff and are not a rule, regulation,
or statement of the Commission. The Commission
has neither approved nor disapproved the content
of these documents and, like all staff statements,
they have no legal force or effect, do not alter
applicable law, and create no new or additional
obligations for any person.

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7253

broker-dealer audited annual reports,
Form 1 filings for national securities
exchanges, and Form CA–1 filings for
clearing agencies.
In general, electronic filing of
Impacted Paper Submissions has been
practical and efficient. It also has been
the Commission’s experience that
electronic filing has been positively
received by the various registrants that
have used it. Based in part on these
positive experiences with electronic
filing during the COVID–19 pandemic,
and as part of its efforts to modernize
the methods by which it collects and
analyzes information from registrants,
the Commission proposed to amend
certain rules and forms to require that
a number of the filings be submitted to
the Commission electronically on
EDGAR using structured data where
appropriate.8 The Commission received
comment letters in response to the
Proposing Release 9 and, as set forth in
more detail below, is adopting the
proposed amendments with certain
modifications in response to comments.
B. Covered SRO Forms
The Commission is requiring, as
proposed, that the following forms be
filed electronically on EDGAR:

8 See Electronic Submission of Certain Materials
Under the Securities Exchange Act of 1934;
Amendments Regarding the FOCUS Report;
Exchange Act Release No. 97182 (Mar. 22, 2023), 88
FR 23920 (Apr. 18, 2023) (‘‘Proposing Release’’).
9 The comments on the Proposing Release (File
No. S7–08–23) are available at https://www.sec.gov/
comments/s7-08-23/s70823.htm.

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Form
Form 1: Application for, and
Amendments to Application for,
Registration as a National
Securities Exchange or Exemption
from Registration pursuant to
section 5 of the Exchange Act
Form 1-N: Form and Amendments
for Notice of Registration as a
National Securities Exchange for
the Sole Purpose of Trading
Security Future Products Pursuant
to section 6(g) of the Exchange
Act
Form X-15AA-1: Application for
Registration as a National
Securities Association or
Affiliated Securities Association,
Form X-15AJ- l: Amendatory
and/or Supplementary Statements
to Registration Statement of a
National Securities Association or
an Affiliated Securities
Association, and Form X-15AJ-2:
Annual Consolidated Supplement
of a National Securities
Association or an Affiliated
Securities Association
Form CA-1 : Application for
Registration or for Exemption
from Registration as a Clearing
Agency and for Amendment to
Registration Pursuant to the
Exchange Act
Prior to these amendments, the
Commission’s regulatory framework
required an entity seeking to be
registered as a national securities
exchange (or seeking an exemption from
such registration based on limited
volume), a national securities
association, a clearing agency (or
seeking an exemption from such
registration), and a national securities
exchange solely for the purpose of
trading futures on individual stocks or
on narrow-based stock indexes 11
10 See 17 CFR 249.802 and 803. The forms and
instructions to the form are incorporated by
reference into the Code of Federal Regulations.
11 Futures on individual stocks or on narrowbased stock indexes are hereinafter referred to as
‘‘security futures products.’’

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Filer Type
Exchange

Amendments
Amend 17 CFR 249 .1, including the
form and instructions to the form, and 17
CFR 240.6a-1, 17 CFR 240.6a-2, and 17
CFR 240.6a-3 under the Exchange Act.

Exchange

Amend 17 CFR 249.10, including the
form and instructions to the form, and 17
CFR 240.6a-4 under the Exchange Act.

Securities
Association

Form X-15AA-1 (re-numbered as Form
15A) and the instructions to the form,
and corresponding Exchange Act Rule
15Aa-1 (redesignated as Rule 15aa-1).
Forms X-15AJ-l and X-15AJ-2
(repealed and the information
requirements incorporated into new
Form 15A), 10 and corresponding
Exchange Act Rule 15Aj-1 (renumbered
as Rule 15aa-2).

Clearing
Agency

The form and instructions to the form,
and corresponding Exchange Act Rule
17ab2-l.

(‘‘Security Futures Product Exchange’’)
to file, in a paper-based format, certain
forms that are mandated by rules under
the Exchange Act. Registered national
securities exchanges, registered national
securities associations, registered
clearing agencies, and registered
Security Futures Product Exchanges
(collectively, SROs), as well as exempt
exchanges and exempt clearing agencies
(together with prospective SROs,
‘‘Filers’’), were also required to submit
paper-based amendments to their
respective forms. The Commission’s
amendments modernize the filing
process for these various forms by
requiring that the forms and information
contained therein be submitted to the
Commission electronically, thereby

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removing the burden of preparing and
submitting paper forms by the Filers,
and of receiving, acting upon, and
maintaining the paper forms by the
Commission and its staff.
In particular, as required by Rule 6a–
1, Rule 6a–2, and Rule 6a–3 under the
Exchange Act, a prospective exchange
must file on Form 1 an application for
registration as a national securities
exchange (or for an exemption from the
requirement to register as a national
securities exchange based on limited
volume), and, once registered, the
exchange must file as an amendment to
its Form 1 certain updating information,
as well as certain supplemental material
and reports. In addition, as required by
Rule 6a–4 under the Exchange Act, a

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Commission on Form X–15AJ–1 and
annual supplements to its registration
statement with the Commission on
Form X–15AJ–2. Moreover, as required
by Rule 17ab2–1 under the Exchange
Act, a prospective clearing agency must
file on Form CA–1 an application for
registration as a clearing agency (or for
an exemption from such registration),
and both registered and exempt clearing
agencies must file amendments to their
Form CA–1 as necessary. In each of the
foregoing situations, these forms were
required to be submitted to the
Commission in a paper-based format. As

Form
Form 19b-4(e): Information
Required of a Self-Regulatory
Organization Listing and Trading
a New Derivative Securities
Product Pursuant to Rule 19b-4(e)
Under the Exchange Act

Amendment
Rescind the form and instructions to the
form and amend 17 CFR 240.19b-4(e)
("Rule 19b-4(e)").

C. Covered Supplementary Materials
Rule 17a–22 requires a registered
clearing agency to file with the
Commission three copies of any
material within 10 days after issuing, or
making generally available, such
materials to its participants or to other
entities with whom it has a significant
relationship.12 A registered clearing
agency for which the Commission is not
the appropriate regulatory agency is
required at the same time to file one
copy of such material with its
‘‘appropriate regulatory agency’’

(‘‘ARA’’).13 While the rule continues to
support the Commission’s oversight of
clearing agencies, the rule is being
modernized to better reflect the ways in
which the registered clearing agencies
now generally distribute the
supplemental materials required under
the rule, as discussed further below.
Since the Commission adopted Rule
17a–22 in 1980, technology has evolved
significantly and the internet has played
an increasingly vital role in information
distribution.14 During this period, the
Commission has encouraged the
dissemination of information
electronically via the internet, as well as
through the use of automated systems
and other services provided by clearing
agencies.15 In general, transitioning
from a requirement to file paper with
the Commission to an electronic filing
requirement can help improve
efficiency and transparency in the
securities markets for registered clearing
agencies, their participants, and the
general public. Most recently, under the

Updated Staff Statement described
above,16 registered clearing agencies
have established alternate arrangements
to satisfy the requirements of Rule 17a–
22 that do not require the submission of
paper filings.
The Commission is now amending
Rule 17a–22 to eliminate the paper
filing requirement altogether and
require a registered clearing agency to
post any supplementary materials to its
internet website, as discussed further
below.17 The amended rule increases
efficiency in the distribution of
supplementary materials required under
the rule and promotes transparency
regarding their contents, as these
supplementary materials are intended to
be made generally available to
participants in the clearing agency or
other categories of market participants
with whom the clearing agency has a
significant relationship.

12 See 17 CFR 240.17a–22. Such materials are
hereinafter referred to as ‘‘supplementary
materials.’’
13 See id. When used with respect to a clearing
agency, the term ‘‘appropriate regulatory authority’’
is defined under section 3(a)(34)(B) of the Exchange
Act to mean broadly the Comptroller of the
Currency, the Board of Governors of the Federal
Reserve System (‘‘Federal Reserve’’), or the Federal
Deposit Insurance Corporation, depending on the
type of bank that is acting as a registered clearing
agency. See 15 U.S.C. 78c(a)(34).

14 See, e.g., The Impact of Recent Technological
Advances on the Securities Market (Sept. 1997),
available at https://www.sec.gov/news/studies/
techrp97.htm. In this report, the Commission stated
that it was mindful of the benefits of increasing use
of new technologies, such as the internet, to access
information more efficiently.
15 Id. See also, e.g., Commission Interpretation:
Confirmation and Affirmation of Securities Trades;
Matching, Exchange Act Release No. 39829 (Apr. 6,
1998), 63 FR 17943 (Apr. 18, 1998), available at
https://www.sec.gov/rule-release/34-39829;

Commission Interpretation: Use of Electronic
Media, Exchange Act Release No. 42728 (Apr. 28,
2000), 65 FR 25843 (May 4, 2000), available at
https://www.sec.gov/rules/interp/34-42728.htm;
Press Release: SEC Provides Guidance to Open Up
Use of Corporate websites for Disclosures to
Investors (July 30, 2008), available at https://
www.sec.gov/news/press/2008/2008-158.htm.
16 See supra note 7.
17 See generally infra section III.

Previously, Rule 19b–4(e) under the
Exchange Act required an SRO to
submit to the Commission reports
regarding the listing and trading of new
derivative securities products on Form
19b–4(e) in a paper-based format. As
with the forms discussed above in this
section, SROs incurred the costs of
completing the paper-based form,
making the requisite number of copies,
and submitting the original version and
copies to the Commission.

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Filer Type
SRO

a result, the prospective and existing
SROs, exempt exchanges, and exempt
clearing agencies have incurred the
costs of completing their respective
paper-based forms, making the requisite
number of copies, and submitting the
original version and copies to the
Commission.
The Commission also is rescinding
the following form, as proposed, and
instead requiring that the information
currently contained in the form be
publicly posted on the relevant SRO’s
internet website:

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D. Filings by Broker-Dealers, OTC
Derivatives Dealers, SBSDs, and
MSBSPs

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ER21JA25.003

prospective exchange may register as a
Security Futures Product Exchange by
filing Form 1–N (‘‘notice registration’’) if
it satisfies certain prerequisites and
must file amendments to its initial filing
and certain supplemental materials on
Form 1–N as well. An applicant for
registration as a national securities
association must file a registration
statement with the Commission on
Form X–15AA–1, and every association
applying for registration or registered as
a national securities association must
file amendments and supplements to its
registration statement with the

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Form 17-H: Risk Assessment
Report for Brokers and Dealers

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Certain forms and other filings that
the Commission is requiring to be filed
on EDGAR by broker-dealers, OTC
derivatives dealers, SBSDs, and MSBSPs
are appropriate for electronic filing
because many of them are voluminous
(in number, size, or both) and some of
them contain certain information that
must be disclosed publicly.18 Electronic
conversion and/or publication of these
filings by Commission staff, to make

18 See

Filer Type
Broker-Dealer,
Security-Based Swap
Dealer, Major
Security-Based Swap
Participant
Broker-Dealer

Amendment
Require the form to be filed on
EDGAR.

Require the form to be filed on
EDGAR.

them available to the public and/or
Commission staff, can be labor intensive
and time consuming. Requiring
submission of these filings on the
Commission’s established EDGAR filing
system will facilitate more efficient
transmission, analysis, dissemination,
storage, and retrieval of information,
and will benefit the Commission, the
submitting entities, investors, and other
market participants.

The Commission is requiring the
existing EDGAR system to be used for
certain filings because Form X–17A–5
Part III and Form 17–H are already
permitted to be filed on EDGAR. In turn,
this will minimize the burden of
transitioning to mandatory filing on
EDGAR.
E. Other Forms, Reports, or Notices

generally infra section IV.

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ER21JA25.004

Form
FormX-17A-5 Part III:
Information Required Pursuant to
Rules 17a-5, 17a-12, and 18a-7
under the Exchange Act

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Form, Report or Notice
Form 17a-19: Information
Required of National Securities
Exchanges and Registered
National Securities Associations
Pursuant to Section 17 and 19 of
the Securities Exchange Act of
1934 and Rule 17a-19 Thereunder,
Report of Change in Membership
Status
Notices (and any withdrawals of
notices) filed pursuant to Rule
3a71-3(d)(l )(vi)

Notices (and any amendments to
the notices) of Security-Based
Swap Valuation Disputes pursuant
to Rule 15fi-3(c)

The Commission is adopting
amendments requiring the EDGAR
system to be used for the following
notices, reports, and filings: (1) notices
made pursuant to Rule 17a–19 under
the Exchange Act and on accompanying
Form X–17A–19; (2) notices made
pursuant to Rule 3a71–3(d)(1)(vi); (3)
notices made to the Commission
pursuant to Rule 15fi–3(c); and (4)
reports made pursuant to Rule 15fk–
1(c)(2)(ii)(A) under the Exchange Act.
Previously, the notices made pursuant
to Rule 17a–19 under the Exchange Act
and on accompanying Form X–17A–19
were submitted via paper.19 The notices
19 See

infra section V.A.

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Amendment
Require the form to be filed on
EDGAR.

Certain registered
SBSDs or registered
brokers that meet
certain capital and
other requirements
SBS Entities

Require the notices and
withdrawals to be filed on
EDGAR; require withdrawal in
specified circumstances.

SBS Entities

Require the notices (and any
amendments to the notices) to
the Commission to be submitted
on EDGAR using structured
data; specify that notices
(including amendments) required
to be provided to any applicable
prudential regulator be in a form
and manner acceptable to such
prudential regulator.
Require reports to be submitted
on EDGAR in a structured data
language (Inline eXtensible
Business Reporting Language
("Inline XBRL")).

made pursuant to Rule 3a71–3(d)(1)(vi)
were previously filed via email.20 The
notices made to the Commission
pursuant to Rule 15fi–3(c) were
previously submitted either via email or
EDGAR, at the SBS Entity’s option, and
the reports required under Rule 15fk–
1(c)(2)(ii)(A) were previously submitted
via email, mail, or EDGAR, at the SBS
Entity’s option.21
20 See

infra section V.B.
infra section V.C. and V.D. Rule 15fi–3(c)
requires that SBS Entities ‘‘notify the Commission’’
(emphasis added). See infra section V.C.1.
Requiring these notices and amendments to be
submitted to the Commission via EDGAR does not
cause them to be deemed filed for purposes of the
Exchange Act. See, e.g., 15 U.S. Code 78r. 17 CFR
240.15fk–1(c) (‘‘Rule 15fk–1(c)’’) requires that the

F. Structured Data Requirements
The Commission is requiring, as
proposed, certain of the disclosures
required by the following filings to be
provided in a structured, machinereadable data language: (1) the Covered
SRO Forms; (2) the information required
under Rule 19b–4(e); (3) Form X–17A–
19; (4) the annual reports (and related
annual filings) filed by broker-dealers
(including OTC derivatives dealers) and

21 See

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chief compliance officer of an SBS Entity prepare
and sign an annual compliance report that ‘‘shall
[b]e submitted to the Commission.’’ 17 CFR
240.15fk–1(c) (emphasis added). Requiring these
reports to be submitted via EDGAR does not cause
the report to be deemed filed for purposes of the
Exchange Act.

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Compliance Reports Submitted to
the Commission pursuant to Rule
l 5fk-1( c)(2)(ii)(A)

Filer/Submitter Type
National securities
exchanges, national
securities associations

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SBS Entities on Form X–17A–5 Part III;
(5) the risk assessment reports filed by
certain broker-dealers on Form 17–H;
and (6) the notices and reports provided
to the Commission by SBS Entities
under Exchange Act Rules 15fi–3(c) and
15fk–1(c)(2)(ii)(A), respectively
(together, the ‘‘Structured
Documents’’).22
Specifically, the Commission is
requiring, as proposed, the report
required by Exchange Act Rule 15fk–
1(c)(2)(ii)(A) and portions of Form 1,
Form CA–1, Form 17–H, and Form X–
17A–5 Part III and related annual filings
to be provided in the Inline XBRL
structured data language. The
Commission is also requiring, as
proposed, Form X–17A–19, the notice to
the Commission (and any amendments
to the notices) required by Exchange Act
Rule 15fi–3(c), and portions of Form 1–
N, Form 15A, Form 1, Form CA–1, Form
17–H, and Form X–17A–5 Part III and
related annual filings to be provided in
machine-readable, eXtensible Markup
Language (‘‘XML’’)-based data languages
specific to those documents (‘‘custom
XMLs’’). As proposed, these structured
documents will be filed or submitted, as
appropriate to each document, on
EDGAR.23
In addition, the Commission is
requiring, as proposed, SROs to
electronically post the information
required under Rule 19b–4(e) using a
custom XML-based data language (also
referred to as a ‘‘schema’’) that the
Commission will create and publish on
its website for SROs to use.24 The
Commission is also requiring, as
proposed, SROs to post a rendered
Portable Document Format (‘‘PDF’’)
version of the custom XML document
using a PDF renderer that the
Commission will also create and
publish on its website for SROs to use.25
As discussed in further detail below,
the structured data requirements will
facilitate access to the disclosures by
22 For certain affected documents, as proposed,
only some aspects are required to be provided in
a structured data language. For example, only the
execution pages of Form 1–N and Form 15A are
required to be provided in a structured data
language. See infra section VII.A.
23 The details of the structured data requirements,
including the specific portions of affected
documents that will be structured in Inline XBRL
versus custom XML, are discussed in section VII.A
below.
24 This requirement will mirror the existing
requirement for registered broker-dealers to
electronically post reports containing order routing
information using the most recent versions of the
XML schema and the associated PDF renderer as
published on the Commission’s website. See 17
CFR 242.606. The custom XML schema and PDF
renderer for Rule 606 reports are available at
https://www.sec.gov/structureddata/dera_
taxonomies.
25 See id.

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users (e.g., investors, market
participants, analysts, and the
Commission), enabling more efficient
retrieval, aggregation, and comparison
across different filers and time periods,
as compared to an unstructured PDF,
HyperText Markup Language
(‘‘HTML’’), or American Standard Code
for Information Interchange (‘‘ASCII’’)
requirement.26
The Commission is requiring, as
proposed, some disclosures to be
structured in Inline XBRL and other
disclosures to be structured in custom
XML. While Inline XBRL is well-suited
for certain types of content—such as
financial statements and extended
narrative discussions—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. Such custom XML
languages also enable EDGAR to
generate fillable web forms that permit
affected entities to input disclosures
into form fields rather than encode their
disclosures in custom XML themselves,
thus easing compliance burdens on
affected entities.27 Finally, certain of the
structured documents—Form X–17A–5
Part III and Form 17–H—were
previously partially subject to custom
XML structured data requirements when
voluntarily filed on EDGAR. For these
forms, the Commission is requiring, as
proposed, the same custom XML
requirements to minimize the associated
burdens on registrants that were
previously using these languages for
these forms.
One commenter stated that the
Commission ‘‘should make clear that
the [Proposing Release] would not
modify the content and format of reports
that substituted compliance firms are
required to submit.’’ 28 The
26 See

infra sections VII.A and X.C.
infra section X.E.3 (discussing and
responding to one commenter’s statement that
XBRL should be used for all Structured
Documents).
28 See Letter from Kyle Brandon, Managing
Director and Head of Derivatives Policy, Securities
Industry and Financial Markets Association (May
22, 2023) (‘‘SIFMA 5/22/2023 Letter’’) at 3. See also
SIFMA 5/22/2023 Letter at 7. Exchange Act Rule
3a71–6 (17 CFR 240.3a71–6) provides a framework
whereby non-U.S. SBS Entities may satisfy certain
requirements under Exchange Act section 15F by
complying with comparable regulatory
requirements of a foreign jurisdiction. Because
substituted compliance does not constitute
exemptive relief, but instead provides an alternative
method by which non-U.S. SBS Entities may
comply with applicable Exchange Act
requirements, the non-U.S. SBS Entities remain
subject to section 15F and the rules thereunder. See,
e.g., Amended and Restated Order Granting
Conditional Substituted Compliance in Connection
With Certain Requirements Applicable to Non-U.S.
Security-Based Swap Dealers and Major Security27 See

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Commission’s orders granting
substituted compliance (‘‘substituted
compliance orders’’) 29 condition
substituted compliance for the
requirements of certain Exchange Act
rules in part on a non-U.S. SBS Entity
providing information to the
Commission, including reports and
other information required by foreign
law. The substituted compliance orders
do not, however, address how an SBS
Entity relying on substituted
compliance should provide such
information to the Commission (e.g., via
EDGAR or in structured data format).30
Rather, the Commission’s website
provides information regarding
submitting notices and amendments
under Rule 15fi–3(c) 31 and the annual
report required by Rule 15fk–1(c) 32 as
well as filing with the Commission
annual audited reports required under
local law when applying substituted
compliance with respect to paragraph
(c) of Rule 18a–7.33 Prior to the
amendments adopted in this release,
SBS Entities have been using this
information on the Commission’s
website when providing filings and
submissions required under the relevant
Exchange Act rules and substituted
compliance orders. Therefore, the
amendments requiring submission or
filing on EDGAR or in structured data
based Swap Participants Subject to Regulation in
the Federal Republic of Germany; Amended Orders
Addressing Non-U.S. Security-Based Swap Entities
Subject to Regulation in the French Republic or the
United Kingdom; and Order Extending the Time To
Meet Certain Conditions Relating to Capital and
Margin, Exchange Act Release No. 93411 (Oct. 22,
2021), 86 FR 59797, 59798 (Oct. 28, 2021).
29 The Commission’s current substituted
compliance orders are available on the
Commission’s website at https://www.sec.gov/tm/
Jurisdiction-Specific-Apps-Orders-and-MOU.
30 To the extent the substituted compliance orders
include a requirement regarding the manner or
format of reports or information to be provided to
the Commission, the substituted compliance orders
only require that the report or information should
be provided to the Commission in (1) the manner
specified on the Commission’s website; or (2) in the
manner and format required by Commission rule or
order. Either way, the specific manner or format for
such reports and information to be delivered to the
Commission is outside of the substituted
compliance orders.
31 See Staff Statement on Submitting SecurityBased Swap Valuation Dispute Notices (available at
https://www.sec.gov/tm/Security-Based-SwapValuation-Dispute-Notices).
32 See Frequently Asked Questions Regarding
Chief Compliance Officer Annual Reports
Submitted by Security-Based Swap Dealers and
Major Security-Based Swap Participants (available
at https://www.sec.gov/tm/faqs-cco-annual-reportssbsd).
33 See Staff Statement on Submitting Notices,
Statements, Applications, and Reports for SecurityBased Swap Dealers and Major Security-Based
Swap Participants Pursuant to the Financial
Responsibility Rules (Exchange Act Rules 18a–1
through 18a–10) (available at https://www.sec.gov/
tm/staff-statement-on-submissions).

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format do not modify the terms of the
substituted compliance orders and
eligible SBS Entities may continue to
rely on existing substituted compliance
orders regarding the requirements of a
relevant rule. However, the instructions
on the Commission’s website regarding
the submission or filing of reports and
other information that SBS Entities
provide to the Commission pursuant to
a substituted compliance order will be
updated to specify how an SBS Entity
must provide such information to the
Commission in a manner consistent
with the electronic filing and
submission and structured data
amendments being made in this release.
This release does not change the
substituted compliance orders.34
Certain Structured Documents also
include requirements to attach copies of
existing documents, such as copies of
bylaws, written agreements, user
manuals, and listing applications. The
Commission is requiring, as proposed,
affected entities to file these copies of
documents as unstructured PDF
attachments to the otherwise structured
forms. Requiring affected entities to
retroactively structure such existing
documents, which were prepared for
purposes outside of fulfilling the
Commission’s disclosure requirements,
would have imposed compliance
burdens on affected entities that would
not have been justified in light of the
informational benefits that would have
arisen from having such documents in
structured form.35
Similarly, Forms 1–N and 15A (other
than the cover pages—i.e., execution
34 A commenter asked the Commission to confirm
that the amendments to the FOCUS Report in this
rulemaking would not affect the Manner and
Format Order. See SIFMA 5/22/2023 Letter at 8. The
order that specifies the manner and format of filing
the FOCUS Report for firms relying on a
Commission substituted compliance order will also
be amended. See Order Specifying the Manner and
Format of Filing Unaudited Financial and
Operational Information by Security-Based Swap
Dealers and Major Security-Based Swap
Participants That Are Not U.S. Persons and Are
Relying on Substituted Compliance Determinations
With Respect to Rule 18a–7, Exchange Act release
no. 93335 (Oct. 14, 2021), 86 FR 59208 (Oct. 26,
2021) (‘‘Manner and Format Order’’). In particular,
the Manner and Format Order will be amended to
specify the following: (1) Firms will complete new
lines 1F–1H (commissions on commodity
transactions, all other commissions, total
commissions) in the Statement of Income section of
FOCUS Report Part II. (2) Because box 1754b is
being renumbered box JJ34b, firms will complete
box JJ34b instead of box 1754b. (3) Firms will
complete box 2143b (intangible assets) instead of
boxes 3163b (goodwill) and 0426b (other intangible
assets) since this release replaces boxes 3163b and
0426b (which are subtypes of intangible assets) with
box 2143b. (4) Firms will complete new boxes
P793b (common equity tier 1 capital ratio—column
A) and P793bb (common equity tier 1 capital ratio—
column B), as applicable, due to the addition of this
capital ratio to Basel III regulations.
35 See infra sections II.A.3, II.D.5, IV.B, and VII.A.

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pages—of those Forms) are, as proposed,
not subject to structured data
requirements, given that the very
limited number of Form 1–N and Form
15A filers and filings limits the benefit
that would have accrued from machinereadability of the disclosures contained
therein.36 Notices filed pursuant to Rule
3a71–3(d)(1)(vi) (‘‘ANE Exception
Notices’’) also are not subject to
structured data requirements, as the
very limited number of data points in
such notices would have lessened the
utility of any functionality enabled by
structured data (such as efficient
retrieval of individual data points from
structured documents).37
The Commission received several
comments regarding the structured data
requirements for the Structured
Documents.38 These included
comments related to structured data
requirements for specific filings or
submissions, comments related to
structured data requirements more
generally, comments related to the
particular structured data languages
specified for the Structured Documents,
and comments related to the costs,
benefits, and burdens arising from the
structured data requirements.39 Each of
these comments is discussed
subsequently in the appropriate
subsection or subsections of the
release.40
G. Amendments Regarding the FOCUS
Report and Signature Requirements in
Rule 17a–5, 17a–12, and 18a–7 Filings
Finally, the Commission is adopting
amendments regarding the FOCUS
Report to harmonize with other rules,
make technical changes, and provide
clarifications. In addition, the
Commission is adopting amendments to
allow electronic signatures in Rule 17a–
36 See

infra sections II.B.3, II.C.3, and VII.A.
infra sections V.B.2 and VII.A.
38 See SIFMA 5/22/2023 Letter; Letter from
Campbell Pryde, President and Chief Executive
Officer, XBRL US (May 22, 2023) (‘‘XBRL Letter’’);
Letter from Howard Spindel, Senior Managing
Director, Integrated Solutions (May 22, 2023)
(‘‘Integrated Solutions Letter’’).
39 See SIFMA 5/22/2023 Letter at 1–7, 9, 11, and
14; XBRL Letter; Integrated Solutions Letter at 1, 2,
and 4.
40 For comments related specifically to structured
data requirements for Form 1, Form CA–1, Rule
19b–4(e) information, Form X–17A–5 Part III, Form
17–H, Form X–17A–19, Rule 15fi–3(c) notices, and
Rule 15fk–1 reports, see infra sections II.A.3 and
II.D.5, II.E.4, IV.A, IV.B, V.A, V.C.2, and V.D.2,
respectively. For comments related more generally
to structured data requirements, see infra section
VII.A. For comments related to the economic
implications of the structured data requirements,
see infra sections X.B.3, X.C.1.b, X.C.1.C., and X.E.
A specific discussion of a comment related to
substituted compliance and data is contained
earlier in this section. See supra notes 28 to 34.
37 See

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7259

5, 17a–12, and 18a–7 filings, including
the FOCUS Report.
II. Requirements to Electronically File
Covered SRO Forms
The Commission is amending certain
Exchange Act rules and the Covered
SRO Forms, including their
instructions, to eliminate the current
paper copy filing method and instead
require electronic submission of the
Covered SRO Forms. Changing from the
current method of paper filing to
electronic submission of the Covered
SRO Forms ultimately will increase
efficiencies and decrease costs for Filers
with respect to their filing obligations.41
In addition the electronic filing of the
Covered SRO Forms will facilitate the
Commission’s oversight of SROs by
streamlining the process of tracking and
reviewing the filings made on the
Covered SRO Forms.
The amendments require the Covered
SRO Forms to be filed on EDGAR. The
Commission is requiring the use of the
existing EDGAR system for the Covered
SRO Forms because these filings are
similar to other filings that are currently
submitted on EDGAR. Furthermore,
many of the Covered SRO Forms
contain information that must be
disclosed publicly, and electronic
conversion and/or publication of these
filings by Commission staff is labor
intensive and time consuming.
Requiring the submission of these
filings on EDGAR will facilitate more
efficient transmission, analysis,
dissemination, storage, and retrieval of
information, and will benefit the
Commission, the submitting entities,
investors, and other market participants.
As a result of the amendments to
relevant Commission rules and forms as
described below, any Filer of the
Covered SRO Forms who has not
previously made an electronic filing on
EDGAR will need to apply for EDGAR
access pursuant to the EDGAR Filer
Manual 42 in order to file documents on
EDGAR.43
For each of the Covered SRO Forms,
the Commission is adding technical
requirements to the form’s general
instructions to specify when a form is
considered incomplete or deficient
when filed. Specifically, each Filer is
required to provide all the information
required by the form, including the
41 See

infra section X.
EDGAR Filer Manual, available at https://
www.sec.gov/edgar/filermanual (‘‘EDGAR Filer
Manual’’).
43 As discussed in more detail in the Paperwork
Reduction Act section of this release, filers of
Covered SRO Forms have not previously made
electronic filings on EDGAR. See infra section
IX.C.1 (1. Form ID).
42 See

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exhibits, and a filing that is incomplete
or otherwise deficient may be returned
to the Filer. The general instructions for
each form also set forth what composes
a complete filing. For instance, the
general instructions for Form 1 now
state that a completed form filed with
the Commission shall consist of Form 1,
responses to all applicable items, and
any exhibits required in connection
with the filing.
For each of the Covered SRO Forms,
the general instructions require some or

all of the information reported on the
forms (including, where applicable, the
exhibits to the forms) to be provided in
a structured, machine-readable data
language.44 For Form 1 and Form CA–
1, the general instructions require the
submissions to be provided in part
using Inline XBRL and in part using
custom XML data languages specific to
those Forms, with certain submissions
that constitute copies of existing
documents of a Filer (such as copies of
governing documents or copies of

contracts) to be included as textsearchable PDF attachments rather than
structured data.45 For Form 1–N and
Form 15A, only the cover page (i.e.,
execution page) of each form is required
to be structured in a custom XML data
language, while the remainder of each
form remains unstructured. Finally, the
information under Rule 19b–4(e)(2)(ii) is
required to be provided on the listing
SRO’s website using a custom XML data
language, thus making the information
machine-readable.

Structured Data Requirements for Covered SRO Forms

Form 1-N

None

Custom XML
Reauirements
Execution page,
Exhibits A (in part), B,
D, E (in part), I, N, Q
Execution page,
Exhibits C (in part), H
(in part), J, K, L, M, N,
17 CFR 240.6a-3(b)
("Rule 6a-3(b)")
volume reports
Execution page only

Form 15A

None

Execution page only

Form CA-1

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Form 1

InlineXBRL
Reauirements
Schedule A, Exhibits
C, F, H, J, K, L, M, 0,
R,S
Exhibits D, E (in part),
I

Unstructured PDF
Reauirements
Exhibits A (in part), E
(in part), G, P, T
Exhibits A, B, C (in
part), E (in part), F, G,
H (in part), 17 CFR
240.6a-3(a)(l) ("Rule
6a-3(a)(l )")
supplemental materials
Remainder of form
Remainder of form

For Form CA–1, Schedule A and
Exhibits C, F, H, J, K, L, M, O, R, and
S must be filed in Inline XBRL.46 The
execution page and Exhibits A (in part),

B, D, E (in part), I, N, and Q must be
filed in custom XML.47 Exhibits A (in

part), E (in part), G, P, and T must be
filed as unstructured PDF documents.48
For Form 1, Exhibits D, E (in part),
and I must be filed in Inline XBRL.49

44 See also infra section V.A (discussing
structured data requirements for Form X–17A–19,
which is also filed by SROs).
45 For example, the copies of governing
documents that are required to be attached as
Exhibit A to Form 1 and as part of Exhibit E to Form
CA–1 are required to be included as a PDF
attachment, rather than being structured in Inline
XBRL or custom XML. See infra sections II.A.3 and
II.D.5.
46 Schedule A to the execution page requires
certain descriptive responses to complement the
clearing agency’s execution page disclosures.
Exhibit C requires a description of the clearing
agency’s organizational structure. Exhibit F requires
a description of material pending legal proceedings
involving the clearing agency. Exhibit H requires
the clearing agency’s financial statements. Exhibit
J requires a description of the clearing agency’s
services and functions. Exhibit K requires a
description of the clearing agency’s security
measures and procedures. Exhibit L requires a
description of the clearing agency’s safeguarding
measures and procedures. Exhibit M requires a
description of the clearing agency’s backup systems.
Exhibit O requires a description of criteria
governing access to the clearing agency’s services
and a description of the reasons for imposing such
criteria. Exhibit R requires a schedule of

prohibitions and limitations on access to the
clearing agency’s services. Exhibit S requires, if
applicable, a statement explaining why the clearing
agency should be exempt.
47 The execution page requires identifying
information about the filer and the document being
filed. Exhibit A requires, in relevant part, a list of
persons controlling or directing the management or
policies of the clearing agency, and descriptions of
any unwritten agreements or arrangements through
which such persons may exercise control or
direction. Exhibit B requires a list of the clearing
agency’s officers, managers, and individuals
occupying similar positions. Exhibit D requires a
list of persons who are controlled by, or are under
common control with, the clearing agency, as well
as a description of each control relationship.
Exhibit E requires, in relevant part, a list of dues,
fees, and other charges imposed by the clearing
agency for its clearing activities. Exhibit I requires
the addresses of all offices in which the clearing
agency conducts its activities, and an identification
of the activities that are performed in each listed
office. Exhibit N requires a list of participants, or
applicants for participation, in the clearing agency.
Exhibit Q requires a schedule of fees fixed by the
clearing agency for services rendered by its
participants.

48 Exhibit A requires, in relevant part, copies of
written agreements with persons who may control
or direct the management or policies of the clearing
agency. Exhibit E requires, in relevant part, a copy
of the currently effective constitution, articles of
incorporation or association, bylaws, rules,
procedures and instruments corresponding thereto,
of the clearing agency. Exhibit G requires copies of
all contracts with any national securities exchange,
national securities association or clearing agency or
securities market for which the clearing agency acts
as a clearing agency or performs clearing agency
functions. Exhibit P requires copies of any forms of
contracts governing the terms on which persons
may subscribe to clearing agency services provided
by the registrant. Exhibit T requires any conditions,
reports, notices or other submissions to the
Commission required as directed in any order
approving applications for exemption from
registration as a clearing agency.
49 Exhibit D requires the unconsolidated financial
statements for the latest fiscal year for each of the
exchange’s subsidiaries and affiliates. Exhibit E
requires, in relevant part, a description of the
manner of operation of the electronic trading
system that the exchange uses to effect transactions.
Exhibit I requires audited financial statements for
the exchange’s latest fiscal year.

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The execution page, Exhibits C (in part),
H (in part), J, K, L, M, N, and the 17 CFR
240.6a–3(b) (‘‘Rule 6a–3(b)’’) volume
reports must be filed in custom XML.50
Exhibits A, B, C (in part), E (in part), F,
G, H (in part), and the 17 CFR 240.6a–

3(a)(1) (‘‘Rule 6a–3(a)(1)’’) supplemental
materials must be filed as unstructured
PDF documents.51 For Forms 15A and
1–N, only the execution page must be
filed using a structured data language
(custom XML).52

7261

Similarly, the information under Rule
19b–4(e)(2)(ii) is required to be provided
on the listing SRO’s website using a
custom XML data language, thus making
the information machine-readable.

Structured Data Requirements for Rule 19b-4(e)

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Rule 19b-4(e)
Information

InlineXBRL
Reauirements
None

Custom XML
Reauirements
Entire Rule 19b-4(e)
posting

Unstructured PDF
Reauirements
The entire posting must
also be available as a
rendered PDF
document
electronic filing of the Covered SRO
Forms and the disclosure of the
information required under Rule 19b–
4(e), which the SROs currently are
required to provide to the Commission.

The requirement that the Covered
SRO Forms be filed, and information
pursuant to Rule 19b–4(e) be posted,
using structured data languages allows
the Commission and, if applicable,
investors, market participants, and other
interested parties, to efficiently review
and analyze the information.53 In
addition, the requirement to file
Covered SRO Forms on EDGAR in a
structured data language enables
EDGAR to perform technical validations
(i.e., programmatic checks to ensure the
documents are appropriately
standardized, formatted, and complete)
upon intake of the documents, which
will improve the quality of the filed data
by decreasing the incidence of nonsubstantive errors (such as the omission
of values from fields that should always
be populated).
Based on the Commission’s
experience in reviewing the Covered
SRO Forms and information posted

pursuant to Rule 19b–4(e), the
requirement to electronically file the
Covered SRO Forms and electronically
post the information required pursuant
to Rule 19b–4(e) allows for more
efficient use of Commission resources
related to reviewing, assessing, and
processing these filings and postings. In
addition, information provided on the
Covered SRO Forms will be captured
automatically by EDGAR and is textsearchable or machine-readable. The
information posted pursuant to Rule
19b–4(e) will be machine-readable as
well. As a result, these features will
facilitate the Commission’s oversight of
SROs.
The amendments include no
substantive changes to the information
required to be filed on the Covered SRO
Forms or the information required to be
posted pursuant to Rule 19b–4(e).
Rather, the amendment is intended
simply to require and facilitate the

Section 6(a) of the Exchange Act
states, ‘‘[a]n exchange may be registered
as a national securities exchange . . . by
filing with the Commission an
application for registration in such form
as the Commission, by rule, may
prescribe containing the rules of the
exchange and such other information
and documents as the Commission, by
rule, may prescribe as necessary or
appropriate in the public interest or for
the protection of investors.’’ 54 Rules 6a–
1, 6a–2, and 6a–3 55 under the Exchange
Act and Form 1 56 set forth the filing
requirements for registration as a
national securities exchange and for

50 The execution page requires identifying
information about the filer and the document being
filed. Exhibit C requires, in relevant part,
information regarding each subsidiary or affiliate of
the exchange, and each entity with whom the
exchange has an agreement relating to the operation
of an electronic trading system to be used to effect
transactions on the exchange (such as the name and
address of the organization, a brief description of
the nature and extent of the affiliation, and a brief
description of the business or functions of the
organization). Exhibit H requires, in relevant part,
a schedule of listing fees and a brief description of
the criteria governing which securities may be
traded on the exchange. Exhibit J requires a list of
the exchange’s officers, governors, standing
committee members, or persons performing similar
functions. Exhibit K requires a list of the exchange’s
significant owners, shareholders, or partners.
Exhibit L requires descriptions of the criteria,
conditions, and procedures governing membership
in the exchange. Exhibit M requires a list of
members, participants, subscribers, or other users of
the exchange, as well as a description of each user’s
activities. Exhibit N requires schedules of securities
traded on the exchange. Rule 6a–3(b) of the
Exchange Act requires a report concerning the

securities sold on the exchange during the previous
calendar month. See 17 CFR 240.6a–3(b).
51 Exhibit A requires copies of the constitution,
articles of incorporation or association with all
subsequent amendments, and of existing bylaws or
corresponding rules or instruments, whatever the
name, of the exchange. Exhibit B requires copies of
all written rulings, settled practices having the
effect of rules, and interpretations of the Governing
Board or other committee of the exchange in respect
of any provisions of the constitution, bylaws, rules,
or trading practices of the exchange which are not
included in Exhibit A. Exhibit C requires, in
relevant part, copies of the constitution, a copy of
the articles of incorporation or association
including all amendments, and copies of the
existing bylaws or corresponding rules or
instruments for each of the exchange’s subsidiaries
or affiliates and for each entity with whom the
exchange has an agreement relating to the operation
of an electronic trading system to be used to effect
transactions on the exchange. Exhibit E requires, in
relevant part, a copy of the exchange’s users’
manual. Exhibit F requires a complete set of all
forms pertaining to membership, participation, or
subscription to the exchange, application for
approval as a person associated with a member,
participant, or subscriber of the exchange, or any

other similar materials. Exhibit G requires a
complete set of all forms of financial statements,
reports, or questionnaires required of members,
participants, subscribers, or any other users relating
to financial responsibility or minimum capital
requirements for such members, participants, or any
other users. Exhibit H requires, in relevant part, a
complete set of documents composing the
exchange’s listing applications, including any
agreements required to be executed in connection
with listing. Rule 6a–3(a)(1) of the Exchange Act
requires any material (including notices, circulars,
bulletins, lists, and periodicals) issued or made
generally available to members of, or participants or
subscribers to, the exchange. See 17 CFR 240.6a–
3(a)(1).
52 The execution page requires identifying
information about the filer and the document being
filed.
53 For more detailed discussions of the
anticipated benefits associated with structured data
requirements, see infra sections VII.A. and X.C.1.b.
54 See 15 U.S.C. 78f(a).
55 See 17 CFR 240.6a–1; 17 CFR 240.6a–2; 17 CFR
240.6a–3.
56 See 17 CFR 249.1.

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A. Form 1
1. Relevant Statutory Framework

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

exempt exchanges, as well as
requirements for the filing of
supplemental material and reports.
2. Previous Requirements for Filing
Form 1
Rule 6a–1 under the Exchange Act
generally requires that an entity seeking
to register as a national securities
exchange, or seeking an exemption from
such registration based on limited
volume, file an application on Form 1
and correct any inaccuracy therein upon
discovery.57 Form 1 contains an
execution page as well as 14 exhibits
that must be filed by the exchange.58
The Form 1 execution page requires
certain basic information from the
exchange, such as the name and street
and mailing addresses of the exchange;
the name, title, and telephone number
of the exchange’s contact employee; and
the legal status of the exchange (e.g.,
corporation or limited liability
company). The Form 1 exhibits require
the exchange to provide, among other
things: its audited financial statements
and unconsolidated financial statements
for each subsidiary or affiliate; its
governing documents and rules; the
names of its members, participants,
subscribers, and users; information
regarding its non-member owners,
shareholders, or partners; and the
securities it lists or trades. The
instructions to Form 1 require that one
original and two copies of all the Form
1 materials be filed with the
Commission in paper form.59
Rule 6a–2 requires a registered
national securities exchange or an
exempt exchange 60 to amend its Form
1 as specified therein. Specifically,
pursuant to 17 CFR 240.6a–2(a) (‘‘Rule
6a–2(a)’’), an exchange must file an
amendment to its Form 1 within 10 days
after it takes any action that renders any
part of its Form 1 execution page or the
information provided in its Form 1
Exhibits C, F, G, H, J, K, or M inaccurate
or incomplete.61
Pursuant to 17 CFR 240.6a–2(b)
(‘‘Rule 6a–2(b)’’), on or before June 30 of
each year, a national securities exchange
or an exempt exchange 62 must file
amendments to Exhibits D, I, K, M, and
N with the Commission.63 Pursuant to
17 CFR 240.6a–2(c) (‘‘Rule 6a–2(c)’’), on

ddrumheller on DSK120RN23PROD with RULES2

57 See

17 CFR 240.6a–1.
purposes of this section relating to Form 1,
these entities are collectively referred to as
‘‘exchanges.’’
59 See 17 CFR 249.1.
60 For purposes of this paragraph, these entities
are collectively referred to as ‘‘exchanges.’’
61 See 17 CFR 240.6a–2(a).
62 For purposes of this paragraph, these entities
are collectively referred to as ‘‘exchanges.’’
63 See 17 CFR 240.6a–2(b).
58 For

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a triennial basis, an exchange must file
complete Exhibits A, B, C, and J with
the Commission.64 Further, 17 CFR
240.6a–2(d) (‘‘Rule 6a–2(d)’’) provides
alternative means for satisfying the
requirements to file amendments to
certain exhibits.65 These alternative
means require that the exchange: (i) on
an annual or more frequent basis
publish the information required by the
pertinent exhibits, or cooperate in its
publication; 66 (ii) keep the information
up to date and make it available to the
Commission and the public upon
request; 67 or (iii) make the required
information available continuously on
an internet website controlled by the
exchange.68 As with Form 1 filings
pursuant to Rule 6a–1, all amendments
to Form 1 pursuant to Rule 6a–2
currently are submitted in paper form in
accordance with the instructions to
Form 1.69
Pursuant to Rule 6a–3, a national
securities exchange or an exempt
exchange also must file certain
supplemental material and reports with
the Commission.70 Specifically, Rule
6a–3(a)(1) requires an exchange to file
with the Commission any material
issued or made generally available to
members of, or participants or
subscribers to, the exchange within 10
days after issuing or making such
material available to such members,
participants or subscribers.71 17 CFR
240.6a–3(a)(2) (‘‘Rule 6a–3(a)(2)’’)
provides that, if information required by
Rule 6a–3(a)(1) is available
continuously on a website controlled by
the exchange, in lieu of filing such
information, the exchange may indicate
the location of the website where the
information can be found, and certify
that the information is accurate as of its
64 See

17 CFR 240.6a–2(c).
17 CFR 240.6a–2(d). Rule 6a–2(d) applies
to information required to be filed pursuant to
paragraphs (b)(2) and (c) of Rule 6a–2. Rule 6a–2(d)
sets forth alternative means of providing access to
the information contained in Exhibits A, B, C, J, K,
M, and N in lieu of filing the information with the
Commission.
66 The exchange would need to: (i) identify the
publication in which the information is available,
the name, address, and telephone number of the
person from whom such publication may be
obtained, and the price of the publication; and (ii)
certify the accuracy of such information as of its
publication date. 17 CFR 240.6a–2(d)(1).
67 The exchange would need to certify that the
information is kept up to date and is available to
the Commission and the public upon request. 17
CFR 240.6a–2(d)(2).
68 The exchange would need to: (i) indicate the
location of the internet website where such
information may be found; and (ii) certify that the
information available at such location is accurate as
of its date. 17 CFR 240.6a–2(d)(3).
69 See 17 CFR 249.1.
70 See 17 CFR 240.6a–3.
71 See 17 CFR 240.6a–3(a)(1).
65 See

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date.72 Rule 6a–3(b) requires an
exchange to file, within 15 days after the
end of each calendar month, a volume
report of securities transactions on the
exchange during the calendar month. As
with filings pursuant to Rules 6a–1 and
6a–2, all filings pursuant to Rule 6a–3
were previously submitted in paper
form.73
Form 1 filings are made available to
the public.74 Form 1 filings made
pursuant to pre-existing Rule 6a–1 are
scanned and the resulting PDF
documents are posted on the
Commission’s website. Form 1 filings
made pursuant to pre-existing Rule 6a–
2 are scanned and the resulting PDF
documents are uploaded to EDGAR.
Form 1 filings made pursuant to preexisting Rule 6a–3 are available for
inspection in paper form in the
Commission’s public reading room.
3. Requirement to Electronically File
Form 1
The Commission is amending Rules
6a–1, 6a–2, and 6a–3 under the
Exchange Act, as well as Form 1 and the
instructions to Form 1, to require the
electronic filing on EDGAR of all
submissions required by the rules.75 As
explained in section II above, among
other benefits, these amendments
should increase efficiencies related to
the filing of these forms and the review
and analysis of the filed forms by the
Commission and its staff as well as by
investors, market participants, and other
interested parties. In addition, the
Commission is adopting conforming
changes to Rule 3(b)(2) of its Informal
and Other Procedures,76 discussed
below,77 to clarify that defective
72 See

17 CFR 240.6a–3(a)(2).
17 CFR 240.6a–3(b). This report must set
forth: (i) the number of shares of stock sold and the
aggregate dollar amount of such stock sold; (ii) the
principal amount of bonds sold and the aggregate
dollar amount of such bonds sold; and (iii) the
number of rights and warrants sold and the
aggregate dollar amount of such rights and warrants
sold. Id.
74 When the Commission previously amended
Form 1 and Rules 6a–1, 6a–2, and 6a–3, it stated
that ‘‘[t]he information collected, retained, and/or
filed pursuant to the rules for registration as a
national securities exchange will not be
confidential and will be available to the public.’’
Exchange Act Release No. 40760 (Dec. 8, 1998), 63
FR 70844, 70912 (Dec. 22, 1998) (Regulation of
Exchanges and Alternative Trading Systems
Adopting Release). Consistent with this statement,
the Instructions to Form 1 specify that ‘‘[n]o
assurance of confidentiality is given by the
Commission with respect to the responses made in
Form 1. The public has access to the information
contained in Form 1.’’
75 The Commission is also making a technical
modification, not included in the Proposing
Release, to Rule 232.101 (17 CFR 232.101(a)(1)) to
include Form 1 in the list of filings required to be
filed electronically.
76 See 17 CFR 202.3(b)(2).
77 See infra section II.G.
73 See

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
applications on Form 1 will be returned
to the applicant and, although permitted
as an option under the current rule,
defective applications no longer will be
held by the Commission. A description
of the Commission’s amendments to
Rules 6a–1, 6a–2, and 6a–3, Form 1, and
the instructions to Form 1 to implement
the electronic filing requirement is
provided below.
a. Amendments to Rules 6a–1, 6a–2, and
6a–3
The Commission is adding a new
paragraph (e) to Rule 6a–1 to require the
electronic filing on EDGAR of all Form
1 filings and amendments to such
filings. The Commission also is
amending Rules 6a–2(a), (b), and (c) to
mandate the electronic filing on EDGAR
of the Form 1 amendments under those
paragraphs by requiring the electronic
filing of those amendments, in
accordance with 17 CFR 240.6a–1(e)
(‘‘Rule 6a–1(e)’’).78 Moreover, the
Commission is updating in Rule 6a–2(c)
the due date for the next filings due
pursuant to Rule 6a–2(c), from June 30,
2001, to June 30, 2025.
As stated earlier in this section, Rule
6a–3 requires national securities
exchanges and exempt exchanges to file
certain supplemental material and
reports with the Commission after
registration or being granted an
exemption from registration. The
Commission is amending Rule 6a–3 to
require national securities exchanges
and exempt exchanges to file on EDGAR
such supplemental material and reports
electronically on Form 1, in accordance
with Rule 6a–1(e).

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b. Amendments to Form 1 and the Form
1 Instructions
In addition to the revisions to Rules
6a–1, 6a–2, and 6a–3, the Commission
is revising and reformatting Form 1, and
the instructions thereto, to
accommodate the electronic filing on
EDGAR of initial applications,
subsequent amendments, supplemental
material, and reports that are made on
Form 1. The changes to Form 1 to
permit electronic submission to the
Commission require minimal
modifications to the form, as described
78 The Commission also is making a technical
amendment to remove two extraneous commas
from the text of Rule 6a–2(a). The Commission
further is amending paragraph (d) of Rule 6a–2 to
clarify that any certifications and other information
permitted under that paragraph in lieu of filing the
required documents as exhibits to Form 1 must be
provided using Form 1. This change should
facilitate compliance with the Rule 6a–2
requirements by exchanges and exempt exchanges
by clarifying and standardizing the means to file
any certifications and other information submitted
pursuant to paragraph (d) of Rule 6a–2.

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below. The Commission also is revising
the Form 1 instructions to facilitate the
electronic filing and machinereadability of Form 1.79 As discussed
below, these revisions to Form 1
facilitate the filing and use of the
information mandated by Form 1 and
related Rules 6a–1, 6a–2, and 6a–3.80
Electronic Form 1 solicits information
through prompts on the form. Electronic
Form 1 also requires an exchange to
attach exhibits via a new exhibit table
that is part of electronic Form 1. Where
Rule 6a–2 allows for alternative means
of filing the information required under
certain exhibits, the new exhibit table
permits an exchange to electronically
provide the certifications and details
necessary for an exchange to avail itself
of those alternative means. The
information required to be filed with the
exhibits is not changing. Currently, Rule
6a–2 provides that in lieu of filing
certain exhibits as part of a paper Form
1 submission, an exchange may: (i)
identify where such information is
published and certify its accuracy as of
its publication date; (ii) certify that the
information is available to the
Commission and the public upon
request; or (iii) indicate the location of
the internet website where such
information may be found and certify
that the information available at such
location is accurate as of its date.81 The
amendments do not change the
availability of these alternative means,
only the method of providing the
necessary certifications and details. As
described above, instead of attaching
79 In addition, the Commission is removing the
definition of the word ‘‘applicant’’ from the Form
1 instructions and replacing the word ‘‘applicant’’
with the word ‘‘exchange’’ on Form 1. Currently,
Form 1 uses both the words ‘‘exchange’’ and
‘‘applicant’’ to refer to the entity filing the Form 1.
The Commission is making this technical, change
to make consistent the terminology used in Form
1.
80 The Commission is also making some technical
amendments to what was proposed for Form 1 and
Rules 6a–2 and 6a–3. In particular, the Commission
is: (1) in Rules 6a–2 and 6a–3, removing the
redundant qualifier ‘‘of this chapter’’ from the
cross-references to Rule 6a–1(e); (2) in Section I of
Form 1, adding the parenthetical ‘‘if any’’ next to
‘‘Facsimile’’; (3) in Section V of Form 1, capitalizing
certain words in the headings of the table of
exhibits; (4) in Section V of Form 1, replacing ‘‘bylaws’’ with ‘‘bylaws’’; (5) in Section V of Form 1
and in the Form 1 General Instructions, replaced
‘‘comprising’’ with ‘‘composing’’; (6) in the Form 1
General Instructions, updating the estimated hourly
burden of completing an initial Form 1 application
from the old estimate of 891 hours to the new
estimate of 901 hours; (7) in the Form 1 General
Instructions, clarifying that the estimated hourly
burden of 26 hours to prepare a Form 1 amendment
refers to Form 1 amendments filed pursuant to
Rules 6a–2(a) and 6a–2(c); and (8) in the Form
General Instructions, specifying that the estimated
hourly burden to prepare a Form 1 amendment
pursuant to Rule 6a–2(b) is 40 hours.
81 See 17 CFR 240.6a–2(d).

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paper exhibits, the amendments require
the exhibits to be submitted
electronically on EDGAR. Similarly,
instead of providing on paper the
certifications and details required for an
exchange to avail itself of these
alternative means, the amendments
require those certifications and details
to be provided via the electronic Form
1. In the event an exchange indicates on
Form 1 an internet website where such
information may be found, where
applicable, the Commission is requiring
the exchange to provide on Form 1 the
Uniform Resource Locator(s) (‘‘URL(s)’’)
of the location(s) on the internet website
where such information may be found,
and to certify that information posted on
such a website is accurate as of its date
and is free and accessible (without any
encumbrances or restrictions) by the
general public.
For electronic Form 1, the
Commission is adding prompts prior to
section I that require the exchange to
identify the basis for submitting the
form. Specifically, electronic Form 1
requires the exchange to check a box
stating one of the following: (i) whether
the filing is an initial Form 1
application and if it is, whether the
exchange is applying to be a national
securities exchange or an exempt
exchange; (ii) whether the filing is an
amendment to an initial Form 1
application prior to Commission action
to grant registration or an exemption
based on limited volume; (iii) whether
the filing is to provide the exchange’s
consent to an extension of the time
period within which the Commission
must take action on an initial Form 1
application; 82 (iv) whether the filing is
to withdraw an initial Form 1
application prior to the Commission
taking action on the application; (v)
whether the filing is an amendment to
Form 1 pursuant to Rule 6a–2 following
the Commission’s granting of
registration or an exemption; or (vi)
whether the filing is supplemental
material or reports pursuant to Rule 6a–
3.83 Previously, there was no place on
Form 1 for an exchange to indicate the
type of filing that it is submitting. For
example, previously Form 1 did not
provide an exchange the ability to
indicate whether an initial Form 1 filing
is an application to be a national
82 Such consents to an extension of the time
period within which the Commission must act
currently are submitted as letters in paper form.
Adding the ability to indicate that the exchange
consents to an extension of time on electronic Form
1 will streamline the process for making such a
submission. See 15 U.S.C. 78s(a)(1)(B).
83 The Commission also is amending the
instructions to Form 1 to add a new section titled
‘‘When to Use the Form,’’ which explains when
Form 1 filings are required.

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securities exchange or an exempt
exchange. Accordingly, capturing
information regarding the type of Form
1 filing facilitates the exchange’s
communication with the Commission
and helps the Commission more
efficiently review Form 1 submissions.
Electronic Form 1 also captures
contact information for the exchange
and certain individuals. Consistent with
the previous version of Form 1,
electronic Form 1 requires the exchange
to identify contact information for the
exchange, a contact employee, and
counsel for the exchange. Unlike
previous Form 1, electronic Form 1
additionally requires an email address
for the contact employee, which could
take the form of an email to a specific
contact employee or a general email to
a group of contact employees. The
requirement to provide an email address
for the exchange contact employee
expedites communications between
Commission staff and the relevant
exchange.
Electronic Form 1 requires an
exchange to electronically attach
exhibits by using an exhibit table. The
exhibit table contains columns for the
name of the exhibit, information
required by the exhibit, whether
alternative means of satisfying the filing
of an exhibit are available for that
particular exhibit (e.g., URL(s)), if
permitted by applicable Commission
rule, and checkboxes to indicate
whether such alternative means are
being used.84 The information required
by the exhibits to electronic Form 1
remains the same as previous Form 1. In
addition, to facilitate the electronic
filing of the supplemental materials
required under 17 CFR 240.6a–3(a)
(‘‘Rule 6a–3(a)’’) and the volume reports
required under Rule 6a–3(b), the
Commission is adding new sections III
and IV, respectively, to Form 1. Sections
III and IV do not add new requirements
beyond those currently included in
Rules 6a–3(a) and (b). Rule 6a–3(a)
requires exchanges to file certain
information with the Commission or, in
the alternative, to indicate where such
information can be found on an internet
website controlled by the exchange. The
amendments require the filing of this
information through section III of
electronic Form 1 or, in the alternative,
to provide through section III of
electronic Form 1 the URL(s) of the
location(s) on the internet website

84 See

supra notes 66–68.

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where such information can be found. If
an exchange chooses this latter option
and provides URL(s) of an internet
website where such information can be
found, section III also clarifies that such
website must be free and accessible
(without any encumbrances or
restrictions) by the general public.
Likewise, section IV does not change the
substance of what must be filed; it
merely requires the filing of the volume
reports required under Rule 6a–3(b) to
be made on electronic Form 1 instead of
in paper format.
Furthermore, electronic Form 1
continues to require an exchange to
consent to service of any civil action
brought by, or notice of any proceeding
before, the Commission in connection
with its activities. The existing language
under which the exchange consents to
service via registered or certified mail at
the main or mailing address provided
on Form 1 continues to be included in
the electronic form.85
In addition, electronic Form 1
requires the individual who is
submitting the form to check a box on
behalf of the exchange to represent that
the information and statements
contained in the Form 1, including
exhibits, schedules, or other documents,
are current, true, and complete. The
previous requirement to sign and
notarize the form is being eliminated
because it is unnecessary, not
compatible with, and not required for
electronic filing on EDGAR.
Finally, electronic Form 1 requires
exchanges to structure Exhibits D
(unconsolidated financial statements of
each of the exchange’s subsidiaries or
affiliates), E (description of the
electronic trading system’s manner of
operation, except for the attached copy
of the users’ manual), and I (audited
financial statements of the exchange) in
Inline XBRL. The execution page,
Exhibits C (information regarding each
of the exchange’s subsidiaries, affiliates,
and entities with whom the exchange
has an agreement relating to the
operation of the exchange’s electronic
trading system, except for the copies of
existing documents listed below), H
(listing fee schedule and brief
description of the criteria governing
which securities may be traded on the
exchange, except for the copies of
existing documents listed below), J (list
of officers, governors, standing
committee members, or persons

performing similar functions), K (list of
significant shareholders or partners), L
(description of criteria, conditions, and
procedures governing membership in
the exchange), M (list of members,
participants, subscribers, or other users
of the exchange and description of each
user’s activities), N (schedules of
securities traded on the exchange), and
the information required under Rule 6a–
3(b) (reports regarding the securities
sold on the exchange over the previous
calendar month) must also be
structured, albeit in a custom XML data
language specific to Form 1 rather than
in Inline XBRL.
Attached copies of existing
documents, including those filed with
Exhibits A (constitution, articles of
incorporation or association, and
existing bylaws or corresponding rules
or instruments of the exchange), B
(written rulings, settled practices having
the effect of rules, and interpretations of
the Governing Board or other committee
of the exchange in respect of any
provisions of the constitution, bylaws,
rules, or trading practices of the
exchange), C (written rulings, settled
practices having the effect of rules, and
interpretations of the Governing Board
or other committee of the exchange in
respect of any provisions of the
constitution, bylaws, rules, or trading
practices of the exchange’s affiliates,
subsidiaries, or entities with whom the
exchange has an agreement related to
the operation of the exchange’s
electronic trading system), E (listing
applications and required agreements),
F (forms pertaining to membership,
participation, or subscription,
application for approval as a person
associated with a member, participant,
or subscriber of the exchange, or any
other similar materials), G (forms of
financial statements, reports, or
questionnaires required of members,
participants, subscribers, or any other
users relating to financial responsibility
or minimum capital requirements for
such members, participants, or any
other users), H (listing applications and
agreements required to be executed in
connection with listing), and the
information required under Rule 6a–
3(a)(1) (supplemental materials issued
or made available to members of, or
participants or subscribers to, the
exchange), must be filed as unstructured
PDF documents.

85 The Commission also is deleting the outdated
provision allowing for service of any civil action
pursuant to confirmed telegram.

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Unstructured PDF

Exhibits D, E (in part), I
Execution page, Exhibits C (in part), H (in part), J, K, L, M, N, Rule 6a3(b) monthly reports
Exhibits A, B, C (in part), E (in part), F, G, H (in part), Rule 6a-3(a)(l)
supplemental materials

The structuring requirements will
facilitate access to the exchange’s
disclosures (such as by enabling
efficient retrieval of only those
disclosures filed by a subset of
exchanges over particular reporting
periods) and their analysis (such as by
enabling efficient comparisons of
individual disclosures or sets of
disclosures across different exchanges
and reporting periods). This will benefit
market participants through enhanced
oversight of the exchanges. For example,
Commission staff will be able to
leverage the machine-readability of
Exhibit I to automatically flag any
atypical fluctuations in particular
financial line items across every
exchange’s financial statements, and
assess whether closer examination of
any such fluctuations is warranted.
Similarly, Commission staff will be able
to leverage the machine-readability of
Exhibit E by retrieving automated
redline comparisons of the manner of
operations description disclosed by
exchanges from prior reporting periods
to the current reporting period, thus
pinpointing any widespread operational
changes for further assessment.
Market participants (such as issuers,
analysts, and other exchanges) will also
benefit from direct use of the machinereadable disclosures on Form 1. For
example, the structuring requirement for
Exhibit I will allow analysts to more
quickly and efficiently compare the
audited financial statements of
exchanges as they determine the
exchange on which they list their
securities. Without the structured data
requirements, these analyses, to the
extent they are done, need to be
performed manually, such as by
gathering the current and former
financial statements for each exchange
and entering all financial line items of
interest into databases, resulting in a
less efficient and precise process. In
addition, the structured data
requirement enables EDGAR to perform
technical validations (i.e., programmatic
checks to ensure the documents are
appropriately standardized, formatted,
and complete) upon intake of the Form
1 disclosures, thus improving the

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quality of the filed data by decreasing
the incidence of non-substantive errors
(such as the omission of values from
fields that should always be populated).
The nature and extent of such benefits
may vary based on the content of each
Form 1 Exhibit. As discussed in the
subsequent economic analysis, studies
of XBRL requirements for public
operating company financial statements
indicate a number of benefits for
investors and market participants.86 The
probability that, and extent to which,
these particular benefits arise from
structured Form 1 disclosures could be
heightened for Exhibits D and I, which
likewise include structured financial
statements under the rule amendments.
In addition, the particular benefits of
structuring data will vary based on the
type of disclosures included in each
particular Exhibit. Structured numerical
disclosures, such as those included on
Exhibit I, lend themselves to
mathematical functionality, such as the
calculation of key ratios or the
identification of extreme statistical
outliers. Structured textual disclosures,
such as those included on Exhibit E,
lend themselves to targeted keyword
searching and more sophisticated
sentiment analysis.
After consideration, the Commission,
as proposed, is requiring Inline XBRL
for certain exhibits to Form 1 and
custom XML for others because each
data language is better suited for
particular types of disclosures. Exhibits
D and I require disclosure of financial
statements, and Inline XBRL was
designed to accommodate financial
statement information, including the
particular metadata (e.g., the relevant
fiscal period, whether the line item is on
the balance sheet, and whether the line
item is a credit or debit) that must be
linked to each data point within the
financial statements to fully convey its
semantic meaning to a machine reader.
Exhibit E requires narrative disclosure
regarding the trading system’s manner
of operations, and whereas custom XML
data languages only have the capacity to
accommodate brief narrative
86 See

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descriptions, Inline XBRL can
accommodate longer narrative
descriptions with presentation
capabilities that preserve humanreadability and maintain machinereadability.87
The execution page of Form 1,
Exhibits C (in part), H (in part), J, K, L,
M, and N to Form 1, and the Rule 6a–
3(b) reports filed on Form 1 do not
require such content. For these
disclosures, the use of custom XML data
languages is preferable to Inline XBRL,
because it yields smaller file sizes and
therefore enables more streamlined
processing of the information.88
Requiring custom XML rather than
Inline XBRL for these disclosures is also
preferable because it enables EDGAR to
generate fillable web forms that permit
exchanges to input their disclosures into
form fields rather than structure their
disclosures in custom XML themselves.
This added flexibility could ease the
burden of compliance on exchanges in
some instances, although exchanges
may have the requisite sophistication to
encode the disclosures in custom XML
themselves without relying on fillable
web forms.89
The Commission is requiring
exchanges to file copies of existing
documents, such as copies of bylaws,
written agreements, and listing
applications, as unstructured PDF
attachments. An unstructured PDF
requirement is preferable to a structured
data requirement for these documents,
because requiring exchanges to
retroactively structure these existing
documents, which were prepared for
purposes outside of fulfilling the
Commission’s disclosure requirements,
is likely to impose costly compliance
burdens on exchanges that may not be
justified in light of the commensurate
87 Compare, for example, the Inline XBRL
requirement for the description of investment
strategies that open-end funds disclose on Form N–
1A to the custom XML requirement for the brief
description of the applicant’s business that SBS
Entities disclose on Form SBSE. See Item 4 of Form
N–1A; Item 7 of Form SBSE.
88 See also infra section X.E.4 (discussing other
structured data languages that would result in
smaller file sizes than Inline XBRL).
89 See infra sections IX.D.2 and X.C.2.b.

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informational benefits associated with
more efficient disclosure use. Thus, the
structured data requirements are not
warranted for these copies of existing
documents.
One commenter suggested that all
items in Form 1 should be submitted in
XBRL, except for copies of existing
documents which could be submitted in
PDF and linked via tags in an XBRL
document.90 The commenter stated that
there were different ‘‘flavors’’ of XBRL
such as XML, XHTML (i.e., Inline
XBRL), JSON, and CSV, each
appropriate for slightly different
reporting needs, and that requiring
Inline XBRL for Form 1 would be
advisable due to the financial and
narrative data that Form 1 elicits.91 The
Commission agrees with the commenter
that Inline XBRL is suitable for financial
and narrative data, and is therefore
requiring Inline XBRL for those Form 1
exhibits with financial disclosures (i.e.,
Exhibits D and I) and extended narrative
disclosures (i.e., Exhibit E except for the
copy of the users’ manual). However,
the Commission disagrees with the
commenter that an Inline XBRL
requirement would be more suitable
than a custom XML requirement for the
other structured Form 1 disclosures.
In that regard, the commenter stated
that requiring a custom XML schema
designed to fit a single reporting
situation—in contrast with XBRL,
which is designed for many reporting
situations and for which there is a large
competitive marketplace of tools to
support reporting preparation—must be
managed with custom applications, and
using such applications will likely be
more expensive for filers than using
existing XBRL applications.92 However,
the Commission disagrees that the
preparation of custom XML Form 1
exhibits must be managed with custom
applications, because exchanges will
have means of complying with Form 1
custom XML requirements that do not
entail the use of such applications. First,
exchanges are sophisticated entities and
likely have experience encoding
disclosures using custom XML schemas
without the use of custom applications.
Exchanges are likely able to leverage
that experience to create custom XML
Form 1 exhibits without the need to
incur additional expense. Second,
exchanges will have the option to forgo
creating structuring custom XML Form
1 exhibits altogether, and instead input
their disclosures into a fillable web form
90 See XBRL Letter at 3–4. The commenter agreed
that requiring exchanges to retroactively structure
existing documents is likely to be overly
burdensome. See id. at 4.
91 See id. at 4.
92 See id.

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that EDGAR will make available to Form
1 filers. Exchanges that use the fillable
form option will similarly not need to
create custom commercial applications
to prepare the custom XML exhibits. In
either case above, exchanges will be
able to comply with the custom XML
Form 1 requirements without needing to
incur additional expense by creating
any application specifically designed to
prepare data using the custom XML
schema for Form 1 exhibits.
The commenter also stated that it
would be more efficient for data users
to extract data from Form 1 if all the
data were structured in Inline XBRL,
because software applications would be
more easily able to extract data from
documents if everything contained in
the document were identically
structured. The Commission agrees with
the commenter that using different
structured data languages for Form 1
will make it more difficult to
incorporate the Inline XBRL disclosures
filed on Form 1 into the same datasets
and applications as the custom XML
disclosures filed on Form 1 and run
analyses across the differently formatted
Form 1 disclosures, without
undertaking data conversion processes
that are frequently burdensome and
imprecise. Nonetheless, the streamlined
data processing associated with the
smaller sizes of the custom XML
exhibits and execution page, as
described earlier in this section, justifies
the use of custom XML structuring for
some Form 1 exhibits rather than Inline
XBRL structuring for all Form 1
exhibits.
With respect to the copies of existing
documents proposed to be submitted as
PDF documents, the commenter stated
that retroactively structuring such
documents is likely to be overly
burdensome, but that the information
could be made more accessible by
requiring reporting entities to prepare a
single XBRL document with tagged and
appropriately labeled links to the
various PDF documents.93 The
Commission agrees with the commenter
that retroactive structuring of such
documents is not justified in light of the
burdens on exchanges. The Commission
does not agree that requiring exchanges
to prepare an XBRL document with
tagged and labeled links to the various
PDF exhibits is appropriate, because the
exhibit table requirement in electronic
Form 1 will already provide sufficient
accessibility and clarity as to the
exhibits contained in Form 1 (including
allowing for PDF exhibits) without
requiring exchanges to prepare a
separate XBRL document. Specifically,
93 See

PO 00000

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the Commission is requiring an
exchange filing Form 1 to electronically
attach PDF exhibits, identify the name
of each PDF exhibit, the information
required by each PDF exhibit, whether
alternative means of satisfying the filing
of an exhibit are available for that
particular PDF exhibit, and whether
such alternative means are being used to
file that particular PDF exhibit. Because
this set of requirements will facilitate
Form 1 data users finding and accessing
PDF exhibits, the Commission disagrees
with the commenter that exchanges
should be required to prepare a single
XBRL document with tagged links to the
various PDF documents with
appropriate labels.
B. Form 1–N
1. Relevant Statutory Framework
Section 6 of the Exchange Act 94 sets
out a framework for the registration and
regulation of national securities
exchanges. The Exchange Act was
amended by the Commodity Futures
Modernization Act of 2000 (‘‘CFMA’’) 95
to allow the trading of security futures
products. Under the CFMA, markets
that wish to trade security futures
products are regulated jointly by the
Commission and the CFTC. The
Exchange Act, as amended by the
CFMA, provides that futures exchanges
that meet certain criteria and that wish
to trade security futures products may
file notice with the Commission to
become a ‘‘Security Futures Product
Exchange.’’ 96
2. Previous Requirements for Filing
Form 1–N
Rule 6a–4 under the Exchange Act 97
sets forth the notice registration
procedures for Security Futures Product
Exchanges and permits futures
exchanges to submit a notice
registration on Form 1–N.98 Form 1–N
requires information regarding how the
futures exchange operates, its rules and
procedures, corporate governance, its
criteria for membership, its subsidiaries
and affiliates, and the security futures
products it intends to trade. Rule 6a–4
also requires entities that have
submitted an initial Form 1–N to file: (1)
amendments to Form 1–N in the event
any information provided in the initial
Form 1–N is rendered inaccurate or
incomplete; (2) periodic updates of
certain information provided in the
initial Form 1–N; (3) certain information
94 See
95 See

15 U.S.C. 78f.
Public Law 106–554, Appendix E, 114 Stat.

2763.
96 See 15 U.S.C. 78f(g).
97 See 17 CFR 240.6a–4.
98 See 17 CFR 249.10.

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that is provided to the Security Futures
Product Exchange’s members; and (4) a
monthly report summarizing the
Security Futures Product Exchange’s
trading of security futures products. The
information required to be filed with the
Commission pursuant to Rule 6a–4 is
designed to enable the Commission to
carry out its statutorily mandated
oversight functions and to ensure that
Security Futures Product Exchanges
continue to be in compliance with the
Exchange Act.
3. Requirement to Electronically File
Form 1–N
The Commission is amending Rule
6a–4 under the Exchange Act, as well as
Form 1–N and the instructions to Form
1–N, to require the electronic filing on
EDGAR of all submissions required by
the rule and form.99 As explained in the
introduction to this section,100 among
other benefits, these amendments will
increase efficiencies and decrease
overall costs 101 related to the filing of
these forms and the review of the filed
forms by the Commission and its staff.
A description of the Commission’s
amendments to Rule 6a–4, Form 1–N,
and the instructions to Form 1–N to
implement this electronic filing
requirement is provided below.

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a. Amendments to Rule 6a–4
The Commission is adding a new
paragraph (d) to Rule 6a–4 to require the
electronic filing of Form 1–N on EDGAR
for exchange notice registrations and
amendments made under Rule 6a–4 in
accordance with the requirements of
Regulation S–T.102
The Commission also is amending the
text of Rule 6a–4 to accommodate
electronic filing, as well as to make
minor corrections and clarifications.
Specifically, the Commission is
modifying Rules 6a–4(a)(1) and 6a–
4(c)(2) to resolve existing typographical
errors and Rule 6a–4(b)(1)(i) to refer to
the appropriate section of Form 1–N,
99 The Commission is also making a technical
modification, not included in the Proposing
Release, to Rule 232.101 (17 CFR 232.101(a)(1)) to
include Form 1–N in the list of filings required to
be filed electronically.
100 See supra introductory text to section II.
101 As discussed in more detail in the Economic
Analysis, some entities that currently do not use
EDGAR may incur relatively small initial costs to
submit filings on EDGAR and there are some
potential costs associated with structuring certain
information. However, savings from filing these
forms electronically rather than in paper is
expected to be greater than the costs. See infra
X.C.1.a.
102 Regulation S–T governs the electronic
submission of documents filed or otherwise
submitted to the Commission and encompasses the
general rules and regulations for electronic filing
via the EDGAR system. See 17 CFR 232.10 through
232.501.

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rather than the ‘‘Execution Page,’’ to
reflect the shift to electronic filing. The
Commission is amending Rules 6a–
4(b)(5)(i), (ii) and (iii) to delete the
phrase ‘‘satisfy this filing requirement
by’’ because the language is superfluous.
The Commission is making conforming
changes to Rules 6a–4(b)(5)(i)(A) and
(B), and 6a–4(b)(5)(ii) and (iii)(A) and
(B) to clarify that certain certifications
by the exchange and listing of websites
containing information required by Rule
6a–4 are required to be made on
electronic Form 1–N. The Commission
further is updating the due dates in
Rules 6a–4(b)(3) and (4) for the next
annual and triennial filings from June
30, 2002, and June 30, 2004, to June 30,
2025. Finally, the Commission is
making non-substantive changes to
Rules 6a–4(a)(1)(i), 6a–4(a)(1)(i)(B), and
6a–4(a)(1)(ii)(B) to update crossreferences in those rules to the
Commodities Exchange Act to reflect
changes to the Commodities Exchange
Act resulting from the Dodd-Frank Act.
b. Amendments to Form 1–N and the
Form 1–N Instructions
In addition to the revisions to Rule
6a–4, the Commission is revising and
reformatting Form 1–N, and the
instructions thereto, to accommodate
the electronic filing of initial notices,
subsequent amendments, supplemental
material, and reports that are made on
Form 1–N. The changes to Form 1–N to
permit electronic filing to the
Commission require minimal
modifications to the form, as described
below. The Commission also is revising
the Form 1–N instructions to facilitate
the electronic filing of Form 1–N on
EDGAR. As explained in the
introduction to this section,103 these
revisions address when a form is
considered incomplete or deficient
when filed and use of a custom XML
data language for the cover page. These
revisions to Form 1–N and the Form 1–
N instructions will facilitate the filing of
the information mandated by Form 1–N
and Rule 6a–4.
Electronic Form 1–N solicits
information through prompts on the
form that are expected to better organize
the information collected. Electronic
Form 1–N also requires an exchange to
attach exhibits (or provide website
URL(s) where applicable) via a new
exhibit table that is part of electronic
Form 1–N. The exhibit table contains
columns for the name of the exhibit,
information required by the exhibit,
whether alternative means of satisfying
the filing of an exhibit are available for
that particular exhibit (e.g., URL(s)), if
103 See

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permitted by applicable Commission
rule, and checkboxes to indicate
whether such alternative means are
being used. Where Rule 6a–4 allows for
alternative means of filing the
information required under certain
exhibits, the new exhibit table permits
an exchange to electronically provide
the certifications and details necessary
for an exchange to avail itself of these
alternative means. The information
required to be filed with the exhibits is
not changing. Rule 6a–4 provides that in
lieu of filing certain exhibits as part of
a paper Form 1–N submission, an
exchange may either: (i) identify where
such information is published and
certify its accuracy as of its publication
date; (ii) certify that the information is
available to the Commission and the
public upon request; or (iii) indicate the
location of the internet website where
such information may be found and
certify that the information available at
such location is accurate as of its
date.104 The amended rule does not
change the availability of these
alternative means, only the method of
providing the necessary certifications
and details. As described above, instead
of attaching paper exhibits, those
exhibits need to be submitted
electronically. Similarly, instead of
providing on paper the certifications
and details required for an exchange to
avail itself of these alternative means,
those certifications and details need to
be provided via the electronic Form 1–
N. In the event an exchange indicates on
Form 1–N the location(s) of an internet
website where such information may be
found, where applicable, the
Commission is requiring the exchange
to provide the URL(s) of the location(s)
on the internet website where such
information may be found, to certify
that the information posted on such
website(s) is accurate as of its date and
is free and accessible (without any
encumbrances or restrictions) to the
general public, as an alternative to filing
certain exhibits required by electronic
Form 1–N.
For electronic Form 1–N, the
Commission is adding prompts prior to
section I that require the exchange to
identify the basis for submitting Form
1–N. Specifically, electronic Form 1–N
requires the exchange to check a box
stating one of the following: (i) whether
the filing is an initial notice of
registration; (ii) whether the filing is an
amendment to the notice of registration;
(iii) whether the exchange is providing
its annual filing for the year; (iv)
whether the exchange is providing a
triennial filing; (v) whether the
104 See

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exchange is providing supplemental
materials; or (vi) whether the exchange
is providing a report of security futures
products traded during the prior
calendar month.
The Commission also is amending the
instructions to Form 1–N to add a new
section titled ‘‘When to Use the Form,’’
which explains when Form 1–N filings
are required, and which of the six types
of Form 1–N filing is required (e.g.,
initial registration, supplemental
material). Currently, there is no place on
Form 1–N for an exchange to indicate
the type of filing that it is submitting,
other than whether it is an application
or an amendment. Capturing
information regarding the type of Form
1–N filing: (1) enhances the exchange’s
communication with the Commission;
(2) helps the Commission more
efficiently review Form 1–N
submissions; and (3) facilitates the
searching and sorting through of Form
1–N submissions by other potential
users such as market participants and
investors.
Electronic Form 1–N also captures
contact information for the exchange
and certain individuals. Consistent with
previous Form 1–N, electronic Form 1–
N requires the exchange to identify
contact information for the exchange, a
contact employee, and counsel for the
exchange. Unlike previous Form 1–N,
electronic Form 1–N additionally
requires an email address for the contact
employee and an email address for the
exchange’s counsel. The requirement to
provide an email address for the
exchange contact employee and the
exchange’s counsel expedites any
subsequent communications between
Commission staff and the relevant
exchange.
In addition, to facilitate the electronic
filing of the supplemental materials and
monthly reports required under Rule
6a–4(c), the Commission is adding new
sections III and IV, respectively, to Form
1–N.105 Sections III and IV require such
materials and reports to be attached to
Form 1–N via the new exhibit table in
the same manner as exhibits to Form 1–
N, and section III provides the exchange
with the ability to enter URL(s) to the
website location of the supplemental
materials in lieu of its filing the
supplemental materials via Form 1–N.
Sections III and IV do not add new
requirements beyond those previously
included in Rule 6a–4(c). Rule 6a–
105 The Commission is not including a question
mark inadvertently introduced into Section III of
Form 1–N when proposed. The Commission is also
making technical amendments to Rule 6a–4(a)(1)(ii)
to change the words ‘‘market place’’ to
‘‘marketplace’’ and Rule 6a–4(c)(1)(ii) to change the
word ‘‘Internet’’ to ‘‘internet.’’

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4(c)(1) requires exchanges to file certain
information with the Commission or in
the alternative to indicate where such
information can be found on an internet
website controlled by the exchange. The
amended rule requires the filing of this
information through section III of
electronic Form 1–N or, in the
alternative, to provide through section
III of electronic Form 1–N the URL(s) of
the location(s) on the internet website
where such information can be found.
Section III also clarifies that such
website must be free and accessible
(without any encumbrances or
restrictions) by the general public.
Likewise, section IV does not change the
substance of what must be reported; it
merely requires the reporting of
information required under Rule 6a–4(c)
to be made on electronic Form 1–N
instead of in paper format.
Furthermore, electronic Form 1–N
continues to require an exchange to
consent to service of any civil action
brought by, or notice of any proceeding
before, the Commission in connection
with its activities. The previous
language under which the Security
Futures Product Exchange consents to
service via registered or certified mail at
the main or mailing address provided
on Form 1–N continues to be included
in the electronically filed form.106
In addition, electronic Form 1–N
requires the individual who is
submitting the form to check a box on
behalf of the Security Futures Product
Exchange to represent that the
information and statements contained in
the Form 1–N, including exhibits,
schedules, or other documents, are
current, true, and complete. The
previous requirement to sign and
notarize the form is being eliminated
because it is unnecessary, not
compatible with, and not required for
electronic filing through EDGAR.107
Finally, electronic Form 1–N requires
filers to submit the execution page in a
custom XML data language specific to
106 The Commission also is deleting the outdated
provision allowing for service of any civil action
pursuant to confirmed telegram.
107 The Commission is making a technical
amendment to Section I of electronic Form 1–N to
add the words ‘‘(if any)’’ after Item 4 ‘‘Facsimile.’’
The Commission is making a technical amendment
to Section V of electronic Form 1–N under the
column for ‘‘information Required by the Exhibit’’
relating to Exhibit H, changing the words
‘‘primarily engage’’ to ‘‘primarily engaged.’’ The
Commission is making a technical amendment to
Section V of electronic Form 1–N to replace the
words ‘‘by-laws’’ with ‘‘bylaws.’’ The Commission
is making a technical amendment to Section V of
electronic Form 1–N by capitalizing certain words
in the headings of the table of exhibits. Lastly, the
Commission is making a technical amendment to
the Form 1–N General Instructions to replace
‘‘comprising’’ with ‘‘composing.’’

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Form 1–N. As with the other Covered
SRO Forms, filers are able to input their
execution page disclosures into a
fillable web form that EDGAR
subsequently converts to custom XML.
Structuring the execution page in
custom XML improves the ability to
sort, filter, and otherwise organize Form
1–N filings without creating significant
additional burden on Form 1–N filers.
The remainder of Form 1–N is not
structured, however, because the very
limited number of Form 1–N filers and
filings could mitigate much of the
benefit derived from machinereadability of the disclosures contained
therein.108
C. Form 15A
1. Relevant Statutory Framework
Section 15A of the Exchange Act sets
forth the statutory standards for
registration as a national securities
association or as an affiliated securities
association.109 Section 15A(b) states that
the Commission shall not approve
registration as a national securities
association unless the Commission
determines that the applicant meets
specified statutory criteria.110 Under
Exchange Act Rule 15Aa–1, an
applicant for registration as a national
securities association must file a
registration statement with the
Commission on Form X–15AA–1.111
The information required to be provided
on Form X–15AA–1 includes, among
other things, lists of officers, governors,
and committee members, as well as
membership lists.112 The Commission
reviews the completed Form X–15AA–
1 to evaluate whether the applicant
meets the standards set forth in section
15A(b) for registration as a national
securities association.
Furthermore, under Exchange Act
Rule 15Aj–1(a), every association
applying for registration or registered as
a national securities association must
file with the Commission an
amendment to its registration statement
or any amendment or supplement
thereto promptly after discovering any
inaccuracy therein. Similarly, under
108 See

infra section IX.C.3.
15 U.S.C. 78o–3.
110 See 15 U.S.C. 78o–3(b).
111 See Exchange Act Rule 15Aa–1 (17 CFR
240.15Aa–1) and Form X–15AA–1 (17 CFR
249.801). Currently, FINRA is the only national
securities association registered with the
Commission. The National Futures Association
(‘‘NFA’’), as specified in section 15A(k) of the
Exchange Act, is also registered as a national
securities association, but only for the limited
purpose of regulating the activities of NFA members
that are registered as brokers or dealers in security
futures products under section 15(b)(11) of the
Exchange Act.
112 See 17 CFR 249.801.
109 See

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
Exchange Act Rule 15Aj–1(b), every
association applying for registration or
registered as a national securities
association, promptly after any change
which renders no longer accurate any
information contained or incorporated
in its registration statement or in any
amendment or supplement thereto,
must file with the Commission a current
supplement to its registration statement
setting forth such change.113
Finally, under Exchange Act Rule
15Aj–1(c), every association applying
for registration or registered as a
national securities association must file
annual amendments to its registration
statement with the Commission.114

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2. Previous Requirements for Filing
Forms X–15AA–1, X–15AJ–1, and X–
15AJ–2
Prior to these amendments, an
applicant for registration as a national
securities association was required to
file a registration statement and exhibits
with the Commission on Form X–
15AA–1 in triplicate.115 Every
association applying for registration or
registered as a national securities
association was required to file with the
Commission an amendment or
supplement to its registration statement
on Form X–15AJ–1 and an annual
consolidated supplement to its
registration statement on Form X–15AJ–
2. These filings also had to be made in
triplicate, at least one copy of which
had to be signed and attested in the
same manner as was required in the
case of the original registration
statement.116 Every association applying
for registration or registered as a
national securities association was
required to file Form X–15AJ–2 with the
Commission promptly after March 1 of
each year.117
The information collected by these
forms was substantially similar: Form
X–15AA–1, the registration statement
for registration as a national securities
association, requests 29 items of
information and includes 3 exhibits; 118
Form X–15AJ–1, for filing any
amendments or supplements to the
113 See Exchange Act Rule 15Aj–1(a) and (b), 17
CFR 240.15Aj–1(a) and (b). These filings were
submitted on Form X–15AJ–1, 17 CFR 249.802. See
17 CFR 240.15Aj–1(d) (requiring that such filings be
made on Form X–15Aj–1).
114 See Exchange Act Rule 15Aj–1(c), 17 CFR
240.15Aj–1(c). These filings were submitted on
Form X–15AJ–2, 17 CFR 249.803. See 17 CFR
240.15Aj–1(d) (requiring that such filings be made
on Form X–15Aj–2). Rule 15Aj–1(c)(1)(ii) also
requires the filing of complete sets of the
constitution, bylaws, rules, and related documents
of the association, once every three years.
115 See 17 CFR 240.15Aa–1.
116 See 17 CFR 240.15Aj–1.
117 See 17 CFR 240.15Aj–1(c).
118 See 17 CFR 249.801.

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registration statement, requests no
information beyond that requested by
Form X–15AA–1; 119 and Form X–15AJ–
2, for filing the annual consolidated
supplement to the registration
statement, only requires one additional
item of information, the inclusion of the
date of the filing, which was not
required by Form X–15AA–1.120
3. Requirements to Electronically File
on Form 15A Information Previously
Filed on Forms X–15AA–1, X–15AJ–1,
and X–15AJ–2
a. Amendments to Rules 15Aa–1 and
15Aj–1
As discussed in detail below, the
Commission is amending Rule 15Aa–1
and redesignating it as Rule 15aa–1,121
redesignating Rule 15Aj–1 122 as Rule
15aa–2, redesignating Form X–15AA–1
as Form 15A, amending the instructions
to new Form 15A, and repealing Forms
X–15AJ–1 and X–15AJ–2 in connection
with the Commission’s requirement that
applicants and national securities
associations electronically file on a duly
executed Form 15A the information
currently filed on Forms X–15AA–1, X–
15AJ–1, and X–15AJ–2.123 As stated
above in the introduction to this section
II, among other benefits, revising the
forms relating to registration as a
national securities association will
increase efficiencies and decrease costs
incurred by applicants for registration as
a national securities association and by
national securities associations.124 In
addition, the amendments will facilitate
Commission review of the information
to be provided on Form 15A.
119 See 17 CFR 249.802. Form X–15AJ–1 and
Form X–15AA–1 both require that if the association
is registered, or applying for registration, as an
affiliated securities association, the respondent list
the registered national securities association with
which the applicant or reporting association is
affiliated. In addition, Form X–15AA–1 asked the
applicant to state its reasons for believing that such
affiliation will be granted. Form X–15AA–1 also
required the applicant to estimate the annual dollar
volume of transactions effected by members of the
applicant association.
120 See 17 CFR 249.803. Form 15A requires the
inclusion of the date of the filing. Capturing the
date (in a structured manner) will assist the
Commission in determining compliance with the
rule requirement that annual supplements be filed
promptly after Mar. 1 of each year (17 CFR
240.15Aj–1(c)).
121 See 17 CFR 240.15Aa–1.
122 See 17 CFR 240.15Aj–1.
123 The Commission is also making a technical
modification to 17 CFR 232.101(a)(1) to include
Form 15A in the list of filings required to be filed
electronically. The Commission is making technical
amendments to hyphenate ‘‘up-to-date’’ in three
locations within Rule 15aa–2(c)(1)(ii), capitalize
‘‘Items’’ in Rule 15aa–2(b)(3) and on Form 15A, and
to replace ‘‘comprising’’ with ‘‘composing’’ in the
Form 15A General Instructions.
124 See supra section II.

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To facilitate electronic filing of Form
15A, the Commission is amending Rule
15Aa–1 to require electronic filing. The
amendments to Rule 15Aa–1 require
that filings submitted pursuant to Rule
15Aa–1 be filed electronically on
EDGAR in accordance with the
requirements of Regulation S–T (17 CFR
part 232). The amendments to Rule
15Aa–1 align the electronic filing
requirements with changes being
adopted under Rule 6a–1 (regarding
Form 1 submissions) as well as the
amendments to Rule 17ab2–1, which set
forth the electronic filing requirements
for Form CA–1 submissions.125 As
stated above, the Commission further is
redesignating Rule 15Aj–1126 as Rule
15aa–2.
b. Form 15A
The Commission is redesignating
Form X–15AA–1 as Form 15A and is
incorporating in Form 15A information
related to amendments and supplements
to the registration statement currently
filed on Form X–15AJ–1 and
information related to the annual
consolidated supplement to the
registration statement currently filed on
Form X–15AJ–2. New Form 15A solicits
information through prompts on the
form that better organize the
information that is currently collected
through Forms X–15AA–1, X–15AJ–1,
and X–15AJ–2, which should make it
easier for respondents to comply with
the filing requirements. Furthermore,
exhibits are required to be electronically
uploaded to EDGAR. Among other
benefits as detailed in the Economic
Analysis,127 the amendments will
increase efficiencies and decrease costs
by consolidating substantially similar
information currently filed on three
paper forms into one electronic form.
Because the information currently filed
on the three forms will be captured
entirely on Form 15A, the Commission
also is repealing Forms X–15AJ–1 and
X–15AJ–2.128
New Form 15A contains eleven
sections. Preceding section I of Form
15A, the new form contains prompts
125 See

also amendments to Rule 6a–4.
17 CFR 240.15Aj–1. The amendments to
Rule 15Aj–1 will include updated references to
relevant forms as well as updates to take into
account electronic filing.
127 See infra section X.C.1 (discussing benefits
such as reducing the risk that non-electronic
submissions are delayed and increasing the ability
to run comparisons across reporting periods).
128 The Commission proposed in 2004 to simplify
and streamline the disclosure process for national
securities associations by, among other things,
redesignating Form X–15AA–1 and combining it
with Forms X–15AJ–1 and X–15AJ–2. See Exchange
Act Release No. 50699 (Nov. 18, 2004), See 69 FR
71126, 71155 (Dec. 8, 2004). The Commission did
not adopt any final rule based on that proposal.
126 See

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that require the association to note the
basis for submitting the form. The
prompts indicate whether the
submission is an initial application filed
pursuant to Rule 15aa–1 or an
amendment or supplement—which
currently are filed on Form X–15AJ–1 or
X–15AJ–2, respectively—pursuant to
new Rule 15aa–2. Section I is titled
‘‘Organization,’’ and it solicits the
following information about the
association: (i) its name; (ii) its statutory
address, principal executive office
address, and the addresses of its branch
or district offices (or if there are no such
branch or district offices, the association
would check the ‘‘Not Applicable’’ box);
(iii) the contact information of each
person authorized to receive service of
process and notices on behalf of the
association from the Commission; (iv)
the contact information for the
association’s counsel; (v) the
association’s form of organization (e.g.,
corporation, sole proprietorship), date of
organization, and name of State and
reference to any statute thereof under
which the association is organized; and
(vi) information about its directors,
officers, and certain other persons, and
information about the members of its
standing committees, or, in lieu of
providing such information on new
Form 15A, the association could
provide a certification that the
information can be obtained in a
publication.129 The information
solicited in section I is the same as that
solicited in Items 1 through 6 on current
Form X–15AA–1.
Section I also requires the association
to attach Exhibits A through D. Exhibit
A requires the association to attach
copies of its corporate governance
documents (e.g., constitution, bylaws),
or in lieu of filing such documents, the
association could provide a certification
that the information may be obtained in
a publication 130 or that the information
is kept up to date and available to the
Commission and the public upon
request.131 Exhibit A of new Form 15A
solicits the same information as Exhibit
A of current Form X–15AA–1 but
reflects additional ways that the
association could satisfy its filing
obligation. Exhibit B requires the
association to attach a balance sheet of
the association as of a date within 30
days of the filing of an initial
application, or promptly after the close
of each fiscal year if the filing is a
supplement, together with an income
129 See 17 CFR 240.15aa–2(c)(1)(ii)(A), as
amended.
130 See id.
131 See 17 CFR 240.15aa–2(c)(1)(ii)(B), as
amended.

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and expense statement for the year
preceding such date or, if the
association was organized during such
year, for the period from the date of
such organization to the date of such
balance sheet. Exhibit B of new Form
15A solicits the same information as
Exhibit B of current Form X–15AA–1.
Exhibit C requires the association to
provide a list, as of the latest practical
date, of all of its members, and in lieu
of supplementing the disclosed
information regarding the names of
members and their principal places of
business when there is a change to that
information—as is required under
current Rule 15Aj–1(b)—the association
is able to certify that changes in that
information are reported in a record
which is published at least once a
month and promptly filed with the
Commission, reflecting an additional
way that the association could satisfy its
filing obligation.132 Exhibit C of new
Form 15A solicits the same information
as Exhibit C of current Form X–15AA–
1, and adds the requirement that the
association set forth the date of election
to membership for each member elected
to membership after December 31, 1994,
which is currently required on Exhibit
C of Form X–15Aj–2. Exhibit D of new
Form 15A solicits the same information
as Exhibit D of current Form X–15AA–
1, requiring the association to
electronically file any notices, reports,
circulars, loose-leaf insertions, riders,
new additions, lists or other records of
changes when, as, and if such records
are made available to members of the
association, as required by new Rule
15aa–2(d)(2).
Sections II through IX of new Form
15A solicits information about specific
association rules and other information
that is currently solicited on Form X–
15AA–1. Section II is titled
‘‘Membership’’ and requires the
association to cite the specific rule(s) of
the association addressing membership
requirements, such as any rule
restricting membership. Section II poses
the same questions about the
association’s membership rules as Items
7 through 10 of current Form X–15AA–
1. Section III is titled ‘‘Representation of
Membership’’ and requires the
association to cite the specific rule(s) of
the association that assures fair
representation of its members, which
information is currently solicited in
Item 11 of Form X–15AA–1. Section IV
is titled ‘‘Dues and Expenses’’ and
requires the association to cite the
specific rule(s) of the association that
provides for the equitable allocation of
dues among its members to defray
132 See

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reasonable expenses of administration,
which information is currently solicited
in Item 12 of Form X–15AA–1.
Section V is titled ‘‘Business Conduct
and Protection of Members.’’ This
section requires the association to cite
specific rule(s) of the association
addressing the protection of members
and member conduct with regard to
principles of fair trade and dealing, such
as the association rule(s) designed to
prevent fraudulent and manipulative
acts and practices and the rule(s)
designed to provide safeguards against
unreasonable profits or unreasonable
rates of commissions or other charges.
Section V also solicits information about
association rule(s) addressing the
disclosure of financial information or
other business conduct requirements,
such as the types of financial statements
the association requires from its
members, rules with respect to member
insolvency, and rules requiring the
keeping and preserving of books and
records. Section V poses the same
questions about business conduct and
the protection of members as Items 13
through 23 of current Form X–15AA–1.
Section VI is titled ‘‘Disciplining of
Members’’ and requires the association
to cite the specific rule(s) of the
association that addresses member
discipline. Section VI poses the same
questions about member discipline as
Items 24 and 25 of current Form X–
15AA–1. Section VII is titled ‘‘Affiliated
Associations’’ and requires the
association to cite the specific rule(s) of
the association that provide for the
admission of registered affiliated
securities associations. Section VII
poses the same question as Item 26 of
current Form X–15AA–1. Section VIII is
titled ‘‘Miscellaneous’’ and requires the
association to cite the specific rule(s) of
the association that (i) regulate the
dealings of a member with any
nonmember broker or dealer and (ii)
provide a method for enforcing
compliance on the part of its members
with the rules of the association. Section
VIII of new Form 15A poses the same
questions as Items 27 and 28 of current
Form X–15AA–1. Section IX is titled
‘‘Additional Information for Registration
as an Affiliated Securities Association’’
and applies only to applications
submitted for registration as an affiliated
securities association. Section IX
requires the applicant to provide the
registered national securities association
with which it seeks to be affiliated, its
reasons for believing that such
affiliation will be granted, and the
estimated dollar volume of transactions
effected by members of the applicant.
Section IX of new Form 15A poses the

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same questions as Items 29 and 30 of
current Form X–15AA–1.
Section X requires the association to
provide the contact information for its
contact employee, and section XI
provides the signature block and
attestation. Consistent with the
amendments to Form 1, Form 1–N, and
Form CA–1, the entity filing new Form
15A consents to service of process to the
individuals listed in section I, Item 3,
which service of process could be via
registered or certified mail. Section XI
also requires the filer to represent that
the information and statements
contained in the form, including
exhibits, schedules, or other documents,
are current, true, and complete.
In addition, the Commission is
amending the instructions for new Form
15A to include general directions for
preparing and filing the form, describe
the seven types of submissions that may
be made under new Rules 15aa–1 and
15aa–2, and set forth the items, exhibits,
and schedules required to be filed for
each type of submission.
Finally, Form 15A requires the
execution page to be filed in a custom
XML data language specific to Form
15A. As with the other Covered SRO
Forms, filers are able to input their
execution page disclosures into a
fillable web form that EDGAR will
subsequently convert to custom XML.
Structuring the execution page in
custom XML should improve the ability
to sort, filter, and otherwise organize
Form 15A filings, enhancing the ability
of the Commission to compare filings
from year to year without creating
significant additional burden on filers.
The remainder of new Form 15A is not
structured, however, because the very
limited number of Form 15A filers and
filings could mitigate the benefit
derived from machine-readability of the
disclosures contained therein.133 The
Commission did not receive comment
on these proposals and for the reasons
discussed above is adopting them as
proposed.

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D. Form CA–1
1. Relevant Statutory Framework
Section 17A of the Exchange Act
governs the establishment of a national
system for the prompt and accurate
clearance and settlement of securities
transactions.134 Section 17A(b)(2) of the
Exchange Act135 states that a clearing
agency may be registered under the
terms and conditions provided
thereunder and in accordance with the
provisions of section 19(a) of the
133 See

infra section IX.C.4.
15 U.S.C. 78q–1.
135 See 15 U.S.C. 78q–1(b)(2).
134 See

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Exchange Act 136 by filing with the
Commission an application for
registration in such forms as the
Commission, by rule, may prescribe
containing the rules of the clearing
agency and such other information and
documents as the Commission, by rule,
may prescribe as necessary or
appropriate in the public interest or for
the prompt and accurate clearance and
settlement of securities transactions.
2. Pre-existing Requirements for Filing
Form CA–1
Previously, the Commission adopted
Rule 17ab2–1137 and Form CA–1,138
pursuant to section 17A(b)(2) of the
Exchange Act, in order to set forth the
requirements for registration as a
clearing agency or for an exemption
from registration as a clearing agency
under section 17A. Rule 17ab2–1(a)
states that an application for registration
or for exemption from registration as a
clearing agency or an amendment to any
such application shall be filed with the
Commission on Form CA–1, in
accordance with the instructions
thereto.139
Form CA–1 contains general
instructions for preparing and filing
Form CA–1 and instructions relating to
the filing of amendments to a Form CA–
1. It also includes an execution page and
19 exhibits. The Form CA–1 execution
page requests general information from
the applicant, as well as information
regarding whether the clearing agency is
exposed to loss if a participant fails to
perform its obligations to the clearing
agency. The exhibits to Form CA–1 also
require an applicant clearing agency to
provide information regarding business
organization, financial position,
operational capacity, access to its
services, and, for those seeking an
exemption from registration, a statement
demonstrating why granting an
exemption from registration would be
consistent with the public interest, the
protection of investors, and the
purposes of section 17A, including the
prompt and accurate clearance and
settlement of securities transactions and
the safeguarding of securities and funds.
3. Comment Regarding Proposed
Changes to Rule 17ab2–1 and Form CA–
1
The Commission received one
comment specifically addressing the
proposed changes to Rule 17ab2–1 and
Form CA–1140 which was generally
136 See

15 U.S.C. 78s(a).
17 CFR 240.17ab2–1.
138 See 17 CFR 249b.200.
139 See 17 CFR 240.17ab2–1(a).
140 See Letter from Megan Malone Cohen, General
Counsel and Corporate Secretary, Options Clearing
137 See

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7271

supportive of the proposal and
described it as ‘‘an effort[ ] to reduce the
burden on registrants by modernizing
filing requirements and forms to make
submission more streamlined and costeffective.’’ 141 The commenter focused
on how the proposed Form CA–1
changes, inclusive of Rule 17ab2–1,
would impact its requirements to make
periodic amendments as a registered
clearing agency. The commenter stated
that it does not anticipate that the
proposed structured data requirements
will present obstacles or be burdensome
for registered clearing agencies filing
routine amendments to Form CA–1, but
it did seek clarification on the
requirement under Item 2 for
submission of an email address.
Specifically, the commenter sought to
clarify whether a registrant may provide
a dedicated (i.e., general) email account
in lieu of an individual person’s email
account in order to comply with this
requirement. The commenter stated
several benefits to the use of a dedicated
email account, including allowing for
routing to multiple individuals,
uninterrupted monitoring even during
personnel transitions, and protection
from spamming.
The amendments permit either an
individual or dedicated email account
to be used. The email address
requirement for the person in charge of
the registrant’s clearing agency activities
is to facilitate communication with the
person who is able to furnish
information about the clearing agency
activities. As long as the person in
charge of the registrant’s clearing agency
activities is able to receive and send
information at that email address, such
an email address meets the purposes of
that requirement. The change does not
impose any requirements on how an
applicant, registrant, or exempt clearing
agency chooses to structure its internal
email account system to follow a
naming convention, manage access, or
contain forwarding rules for emails to
one or more persons. If the person who
is in charge of the registrant’s clearing
agency activities can receive and send
information through all the contact
information provided on the Form CA–
1, including the email account, this
requirement will be met.
Consistent with the general support
by the commenter for the benefits of the
proposed changes to Rule 17Ab2–1 and
Form CA–1, and the acknowledgement
by the commenter that it does not create
obstacles, for the reasons discussed in
this section, the Commission is adopting
Corporation (May 22, 2023) (‘‘OCC 5/22/2023
Letter’’).
141 See id. at 1.

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these changes as proposed, as further
described below, because of their
benefits.

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4. Requirement to Electronically File
Form CA–1
The Commission is revising certain
aspects of Rule 17ab2–1, Form CA–1,
and the instructions to Form CA–1 to
require electronic filing of applications
on Form CA–1 and subsequent
amendments thereto by applicants,
registered clearing agencies, and exempt
clearing agencies. The revisions
therefore require: (i) an applicant to file
electronically its initial application on
Form CA–1 for registration or for an
exemption from registration and any
subsequent amendments thereto; (ii) a
registered clearing agency to file
electronically any amendments to its
Form CA–1 after being granted
registration as a clearing agency; and
(iii) an exempt clearing agency to file
electronically any amendments to its
Form CA–1 after being granted an
exemption from registration as a
clearing agency. As explained above in
the introduction to section II, the
revised rule and form revisions increase
efficiencies and decrease costs related to
the filing of Form CA–1 and
amendments thereto by both registered
and exempt clearing agencies, and the
Commission’s review of filed Forms
CA–1 and amendments thereto.142 In
addition, while exempt clearing
agencies are not subject to the SRO rule
filing process under section 19(b) of the
Exchange Act,143 certain exempt
clearing agencies are currently subject to
electronic filing requirements under
Regulation SCI.144 Consequently,
requiring these entities to file
electronically Form CA–1 and
amendments thereto is consistent with
existing requirements for these entities
under Regulation SCI.
5. Amendments to Rule 17ab2–1
The Commission is revising Rule
17ab2–1 to require electronic filing of
Form CA–1. Specifically, the
Commission is revising paragraphs (a),
(d), (e), and (f) to reference the method
of filing as being electronic, and is
adding paragraph (g) to provide specific
instructions on the method of filing
electronically, including a requirement
for an electronic signature (defined as
an electronic entry in the form of a
magnetic impulse or other form of
computer data compilation of any letter
142 See

supra section I.B.
15 U.S.C. 78s(a) and (b).
144 See 17 CFR 242.1006. See also Exchange Act
Release No. 73639 (Nov. 19, 2014), 79 FR 72251,
72258 (Dec. 5, 2014) (listing categories of SCI
entities under Regulation SCI).
143 See

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or series of letters or characters
composed of a name, executed, adopted
or authorized as a signature).
Additionally, paragraph (g) specifies a
cutoff time of 5:30 p.m. eastern standard
time or eastern daylight saving time for
purposes of deeming which business
day (defined to exclude certain days of
the week, holidays, and closures) that a
filing occurred. It also specifies that a
filing would be deemed timely filed if
it is required to be filed on a day that
is not a business day and is filed on the
next available business day. As stated
above in the introduction to section II,
among other benefits, revising the forms
relating to registration as a clearing
agency increases efficiencies and
decreases costs incurred by applicants
for registration as a clearing agency.
6. Amendments to Form CA–1 and the
Form CA–1 Instructions
Electronic Form CA–1 solicits
information through prompts on the
form that should better structure the
information collected. In addition,
electronic Form CA–1 requires exhibits
to be attached through a new exhibit
table that is part of electronic Form CA–
1. Further, all information posted on a
website pursuant to electronic Form
CA–1 must be free and accessible
(without any encumbrances or
restrictions) by the general public.
Prompts are being added prior to section
I of the form that require the registrant
to note the basis for submitting Form
CA–1. Specifically, electronic Form CA–
1 requires the registrant to check a box
stating one of the following: (i) whether
the filing is an application pursuant to
Rule 17ab2–1(a) and if it is, whether the
registrant is applying for registration as
a clearing agency 145 or requesting an
exemption from registration as a
clearing agency; (ii) whether the filing is
an amendment to an initial Form CA–
1 application pursuant to Rule 17ab2–
1(d) prior to the Commission’s grant of
registration or an exemption from
registration, or an update to an initial
Form CA–1 application correcting
information that is inaccurate,
misleading, or incomplete, pursuant to
Rule 17ab2–1(e); (iii) whether the filing
is to provide the registrant’s consent to
an extension of the time period within
which the Commission must take action
on an initial Form CA–1 application and
145 If the registrant is applying for registration as
a clearing agency, the changes to Form CA–1
require the registrant to indicate whether it requests
the Commission to consider granting exemption
from specified clearing agency requirements during
a temporary registration period, in accordance with
paragraph (c)(1) of Rule 17ab2–1 under the
Exchange Act.

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the date the extension expires; 146 (iv)
whether the filing is to withdraw an
initial Form CA–1 application prior to
the Commission taking action on the
application; (v) whether the filing is an
amendment to Form CA–1 pursuant to
Rule 17ab2–1(e) following Commission
action to grant registration or an
exemption; or (vi) whether the filing is
required by a Commission order
approving an application for exemption
from registration as a clearing agency
pursuant to section 17A(b)(1) of the
Exchange Act. The Commission is
requiring a registrant to indicate the
type of filing to help facilitate the
electronic filing of, and the
Commission’s review of, Form CA–1
submissions, including information
required of an exempt clearing agency
by an exemptive order.
The Commission also is modifying
Form CA–1 to add a requirement for
information about a contact employee.
Amended Form CA–1 requires the
name, title, email address, and
telephone number of an employee
prepared to respond to questions about
the Form CA–1 submission.147 The
Commission is requiring information
about a contact employee to facilitate
communication between the registrant
and the Commission. Similarly, the
Commission is requiring the email
address of the person in charge of the
registrant’s clearing agency activities to
facilitate communication between the
registrant and the Commission. As
described above, the amendments
permit the use of dedicated, general
email accounts as long as the person in
charge can send and receive information
from the email provided to the
Commission on the Form CA–1.148
In addition, revised Form CA–1
requires a registrant to electronically
attach exhibits by using an exhibit table
for all of the exhibits required by the
current form, broken down into
sections.149 There are also sections that
may be applicable to only certain
146 See

15 U.S.C. 78s(a)(1)(B).
Commission is making the following
technical changes: (1) capitalizing ‘‘Item’’ in the
General Instructions to Form CA–1, Form CA–1,
and in Rule 17ab2–1(e); (2) replacing ‘‘comprising’’
with ‘‘composing’’ and ‘‘comprised’’ with
‘‘composed’’ in the General Instructions to Form
CA–1 and Form CA–1; (3) replacing ‘‘comprising’’
with ‘‘composed of’’ in Rule 17ab2–1(g)(2); and (4)
in Section B of the General Instructions to Form
CA–1, replacing the phrase ‘‘The full middle name
is required’’ with ‘‘The full middle name, if one
exists, is required’’ to be clear that a full name can
be provided without a middle name when an
individual does not have a middle name.
148 See supra note 140 and accompanying text.
149 Sections III through VII of Form CA–1, as
amended, consist of exhibits relating to General
Information, Business Organization, Financial
Information, Operational Capacity, and Access to
Services, respectively.
147 The

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filings, with section VIII covering
requests for an exemption from
registration under Exhibit S, and section
IX covering submission of any
conditions, reports, notices or other
submissions to the Commission
required as directed in any order
approving an application for exemption
from registration as a clearing agency,
under Exhibit T. Furthermore, adopted
Form CA–1 preserves the current ability
for a registrant to indicate that it is
requesting confidential treatment with
respect to certain of the disclosed
information, and make a request for
confidential treatment, under section X.
In addition, as discussed further below
in section VII, the Commission is
adopting new paragraph (j) to Rule 24b–
2 to require that a filer not omit the
confidential portion from the material
filed in electronic format on Form CA–
1, but rather request confidential
treatment of information provided in
electronic format by completing section
X of Form CA–1.
The Commission also is omitting Item
7(b) from the current Form CA–1. Item
7(b) solicits the following information:
as of September 30, 1975, the dollar
amount of the potential exposure of
registrant, if any, as a result of
differences (without offsetting long
differences against short differences and
without offsetting any suspense account
items) in its clearing agency activities
not resolved after 20 business days. On
December 1, 1975, it became unlawful
for any clearing agency—not subject to
temporary exemptive relief under
paragraph (b) of Rule 17ab2–1 that has
since expired—to perform the functions
of a clearing agency unless registered or
exempt.150 Before December 1, 1975,
however, applicant clearing agencies
may have performed the functions of a
clearing agency prior to registering with
the Commission or obtaining an
exemption from registration. Therefore,
to facilitate review by the Commission
of applications on Form CA–1 by such
clearing agencies, Item 7(b) of Form CA–
1 requires disclosure, as of September
30, 1975, of the dollar amount of the
potential exposure of the clearing
agency from differences in its clearing
agency activities not resolved after 20
business days. Information provided
pursuant to this provision is no longer
useful to the Commission because
150 Paragraph (b) of Rule 17ab2–1 provides any
clearing agency that filed an application with the
Commission on or before Nov. 24, 1975, with a
temporary exemption from the registration
provisions of section 17A(b) of the Exchange Act
and the rules and regulations thereunder until the
Commission either grants registration, denies
registration, or grants an exemption from
registration. See 17 CFR 240.17ab2–1(b).

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information on potential exposures to
the clearing agency as of September 30,
1975, is stale data. Accordingly, it is no
longer necessary to include Item 7(b) on
Form CA–1.
The Commission also is revising the
instructions to Form CA–1 to facilitate
the electronic filing of Form CA–1. The
revised form instructions do not contain
the language in paragraph 2 under Part
I of the current form stating that clearing
agencies are required to file four
completed copies of Form CA–1 with
the Commission, or the language in
paragraph 4 under Part I of the current
form providing instructions relating to
the requirements for copies of Form
CA–1. Further, the revised instructions
do not contain the language of
paragraph 3 under Part I of the current
form, which states that ‘‘[t]he date on
which a Form CA–1 is received by the
Commission shall be the date of filing
thereof if all the requirements with
respect to filing have been complied
with.’’ This language would be
inconsistent with the date-of-filing
provision being added to Rule 17ab2–1,
which provides for a 5:30 p.m. eastern
standard time or eastern daylight saving
time, whichever is currently in effect,
on a business day, cutoff for a filing to
be deemed filed on the day on which it
is submitted.
In addition, existing paragraph 13
under Part III of the current form states
that, if an item is amended, the
registrant must repeat all unamended
items as they last appeared on the page
on which the amended item appears
and must file four copies of the new
page, each with updated and properly
completed cover and execution pages.
The requirement to repeat unamended
items on certain pages relates solely to
the filing of amended paper copies and,
therefore, it is not relevant to the
electronic filing process. The
Commission is requiring a registered or
exempt clearing agency to electronically
file a full exhibit to help facilitate the
performance of the Commission’s
regulatory functions because the
Commission is able to review an
amended exhibit to Form CA–1 in its
entirety and more easily compare the
revised exhibit against the prior version,
particularly if numerous, nonconsecutive pages are being amended.
The Inline XBRL requirement for certain
Form CA–1 exhibits further facilitates
this comparison process, because Inline
XBRL allows reviewers to create
automated redline comparisons of an
exhibit (or specific portion thereof) to a
prior version of the same exhibit (or
specific portion thereof). Accordingly,
the Commission is deleting the

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reference to pagination that is currently
in Item III, paragraph 13.
In addition, Form CA–1 and the
instructions to Form CA–1 continue to
require a registered or exempt clearing
agency to consent to the service of
notice of a proceeding under sections
17A or 19 of the Exchange Act involving
the registrant. The language under
which the registrant consents to service
via registered or certified mail at the
address provided on Form CA–1 would
continue to be included in the
electronically filed form.151
Finally, Form CA–1 requires a
registered or exempt clearing agency to
structure Schedule A (descriptive
responses complementing the clearing
agency’s execution page disclosures)
and Exhibits C (description of
organizational structure), F (description
of material pending legal proceedings),
H (financial statements), J (description
of services and functions), K
(description of security measures and
procedures), L (description of
safeguarding measures and procedures),
M (description of backup systems), O
(description of, and reasons for, criteria
governing access to services), R
(prohibitions and limitations on access
to services), and S (explanation of
requested exemption) in Inline XBRL.
The execution page and Exhibits A
(persons controlling management or
policies, but not the copies of written
agreements with such persons), B
(officers, managers, and individuals
occupying similar positions), D (persons
controlled by or under common control
with the clearing agency, and
description of control relationship), E
(dues, fees, and other charges for
clearing activities, but not the copies of
the constitution, articles of
incorporation or association, bylaws,
rules procedures, and instruments
corresponding thereto), I (office
addresses and activities performed in
each office), N (participants or
applicants for participation), and Q
(schedule of fees for services rendered
by participants) also must be structured,
albeit in a custom XML data language
specific to Form CA–1 rather than in
Inline XBRL.
The copies of existing documents
filed with Exhibits A (copies of written
agreements with control persons), E
(copies of the constitution, articles of
incorporation or association, bylaws,
rules, procedures, and instruments
corresponding thereto), G (copies of
contracts with exchanges, national
securities associations, and securities
151 The provision on page 3 of the Form CA–1
allowing for service of any civil action pursuant to
confirmed telegram is deleted.

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markets), P (copies of contracts
governing subscription terms), and T

(submissions to the Commission
required as directed in any approval

order) are filed as unstructured PDF
documents.

Structured Data Requirements for Form CA-1

Schedule A, Exhibits C, F, H, J, K, L, M, 0, R, S
Execution page, Exhibits A (in part), B, D, E (in part), I, N, Q
Exhibits A (in part), E (in part), G, P, T

The structuring requirements should
facilitate access to the clearing agency’s
disclosures (enabling, for example, more
efficient retrieval of only those
disclosures filed by a subset of clearing
agencies over particular reporting
periods) and analysis (such as by
comparing individual disclosures or sets
of disclosures across clearing agencies
and time periods). This will benefit
market participants through enhanced
oversight of clearing agencies. Market
participants (such as broker-dealers,
analysts, and other clearing agencies)
will also benefit from direct use of the
machine-readable disclosures on Form
CA–1. For example, institutional
investors could leverage the machinereadability of Exhibit J to run automated
redlines of a clearing agency’s
safeguarding procedure descriptions
from prior periods, thereby detecting
any significant procedural changes that
could raise concern.
Without the structured data
requirements, these types of analyses
would need to be performed manually,
such as by gathering the current and
former descriptions of safeguarding
procedures for each exchange and
entering them all into databases,
resulting in a significantly less efficient
and precise process. In addition, the
structured data requirement enables
EDGAR to perform technical validations
(i.e., programmatic checks to ensure the
documents are appropriately
standardized, formatted, and complete)
upon intake of the Form CA–1
disclosures, thus potentially improving
the quality of the filed data by
decreasing the incidence of nonsubstantive errors (such as the omission
of values from fields that should always
be populated).
The nature and extent of such benefits
may vary based on the content of each
Form CA–1 Exhibit. As discussed in the
Economic Analysis, studies of XBRL
requirements for public operating
company financial statements indicate a
number of benefits for investors and
market participants.152 The probability
that, and extent to which, these
152 See

infra section X.C.1.b.

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particular benefits arise from structured
Form CA–1 disclosures could be
heightened for Exhibit H, which
likewise includes structured financial
statements. In addition, the particular
benefits of structuring data likely vary
based on the type of disclosures
included in each particular Exhibit.
Structured numerical disclosures, such
as those included on Exhibit H, lend
themselves to mathematical
functionality, such as the calculation of
key ratios or the identification of
extreme statistical outliers. Structured
textual disclosures, such as those that
included on Exhibit K, lend themselves
to period-over-period redline
comparisons, targeted keyword
searching, and more sophisticated
sentiment analysis.
After consideration, the Commission,
as proposed, is requiring Inline XBRL
for certain exhibits to Form CA–1 and
custom XML for others, because each
data language is better suited for
particular types of disclosures. Exhibit
H requires disclosure of financial
statements, and Inline XBRL was
designed to accommodate financial
statement information, including the
particular metadata (e.g., the relevant
fiscal period, whether the line item is on
the balance sheet, whether the line item
is a credit or debit) that must be linked
to each data point within the financial
statements to fully convey its semantic
meaning to a machine reader. Exhibits
C, F, J, K, L, M, O, R, and S require
narrative disclosures on topics such as
the clearing agency’s services, security,
backup systems, and criteria governing
access to services; whereas custom XML
data languages only have the capacity to
accommodate brief narrative
descriptions, Inline XBRL can
accommodate longer narrative
descriptions with presentation
capabilities that preserve humanreadability while maintaining machinereadability.
The execution page of Form CA–1,
Exhibits A (in part), B, D, E (in part), I,
N, and Q do not require such content.
For these disclosures, the use of custom
XML is preferable to Inline XBRL,

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because it yields smaller file sizes and
therefore enables more streamlined
processing of the information.153
Requiring custom XML rather than
Inline XBRL for these disclosures is also
preferable because it will enable EDGAR
to generate fillable web forms that
permit clearing agencies to manually
input their disclosures into the form
fields, rather than structure their
disclosure in the custom XML data
language themselves. This added
flexibility could ease the burden of
compliance on clearing agencies in
some instances, although clearing
agencies may have the requisite
sophistication to encode the disclosures
in custom XML themselves without
relying on fillable web forms.
The Commission is requiring clearing
agencies to file copies of existing
documents, such as copies of bylaws,
written agreements, and contracts
governing subscription terms, as
unstructured PDF attachments. The
Commission is not requiring clearing
agencies to retroactively structure these
existing documents, which were
prepared for purposes outside of
fulfilling the Commission’s disclosure
requirements, because such a
requirement will likely impose costly
compliance burdens on clearing
agencies that may not be justified in
light of the commensurate informational
benefits associated with more efficient
disclosure use. Thus, structured data
requirements are not warranted for these
copies of existing documents.
One commenter agreed that the
proposed structured data requirements
for Form CA–1 would not present
obstacles or be burdensome for clearing
agencies.154 Another commenter
recommended that all items in Form
CA–1 be submitted in Inline XBRL,
except for copies of existing documents
which could then be submitted in PDF
format and linked via tags in an XBRL
153 See also infra section X.E.4 (discussing other
structured data languages that would result in
smaller file sizes than Inline XBRL, and the reasons
why the Commission has not required the use of
such data languages under the rule amendments).
154 See OCC 5/22/2023 Letter at 2.

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Inline XBRL
Custom XML
Unstructured
PDF

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
document.155 The commenter stated
that requiring a single data language
would lead to efficiencies in both
reporting and data extraction and
identified Inline XBRL as the most
suitable option for the information
reported on Form CA–1, because much
of it is financial and narrative.156 The
Commission agrees with the commenter
that Inline XBRL is suitable for financial
and narrative data, and is therefore
requiring Inline XBRL for those Form
CA–1 exhibits with financial disclosures
(i.e., Exhibit H) and extended narrative
disclosures (i.e., Schedule A and
Exhibits C, F, J, K, L, M, O, R, and S).
However, the Commission disagrees
with the commenter that an Inline XBRL
requirement would be more suitable
than a custom XML requirement for the
other structured Form CA–1 disclosures.
In that regard, the commenter stated
that, whereas there is a large
competitive marketplace of tools to
support XBRL preparation which can be
leveraged for any reporting application,
use of a custom XML schema for some
Form CA–1 disclosures will require the
creation of a new application
specifically designed for a 2-step data
extraction process that involves
preparing and extracting data using a
custom XML schema.157 The
Commission disagrees with the
characterization by the commenter that
a new application would need to be
specifically designed to prepare data
using that schema. Clearing agencies
will have means of complying with
Form CA–1 custom XML requirements
that do not involve the creation of a new
application. First, clearing agencies will
be able to create custom XML CA–1
documents internally without the use of
custom applications; because, similar to
exchanges as discussed above, clearing
agencies are sophisticated entities that
likely have experience encoding
disclosures using custom XML schemas
without needing to create new custom
applications. Second, clearing agencies
(like exchanges) will have the option to
forgo creating structured custom XML
Form CA–1 exhibits altogether, and
instead input their disclosures into a
fillable web form that EDGAR will make
available to Form CA–1 filers. Clearing
agencies that use the fillable form
option will similarly not need to
procure or pay for custom commercial
applications to prepare the custom XML
data required by those Form CA–1
exhibits. In either of the above cases,
155 See XBRL Letter at 4–5. The commenter
agreed that there would not be sufficient value in
retroactively structuring existing documents.
156 See id.
157 See id.

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clearing agencies will be able to comply
with the custom XML Form CA–1
requirements without any need for
creation of a new application
specifically designed to prepare data
using the custom XML schema for Form
CA–1 exhibits.
The commenter also stated that it
would be more efficient for data users
to extract data from Form CA–1 if all the
data were structured in Inline XBRL,
because this would result in a one-step
extraction process rather than a two-step
extraction process. The Commission
agrees with the commenter that using
different structured data languages for
Form CA–1 will add an additional step
to the extraction of the structured data
(making it a one-step extraction process
rather than a two-step extraction
process), because data users will need to
run conversion processes to incorporate
the Inline XBRL disclosures on Form
CA–1 into the same datasets and
applications as the custom XML
disclosures filed on Form CA–1.
Nonetheless, the streamlined data
processing associated with the smaller
sizes of the custom XML exhibits and
execution page, as described earlier in
this section, justify any such drawbacks.
With respect to the execution page,
the commenter referenced the
Commission’s existing requirements for
public companies to tag cover page
information in periodic reports in Inline
XBRL, and questioned why the
Commission has chosen not to follow
that precedent for Form CA–1.158
Several other existing Commission
disclosure forms, such as electronic
Form X–17A–5 Part III, electronic Form
17–H, and the SBSE Forms, use custom
XML execution pages.159 The
Commission is similarly requiring
custom XML rather than Inline XBRL
for the Form CA–1 execution page
because while Inline XBRL is
particularly suitable for financial
statements or extended narrative
disclosures, custom XML is comparably
suitable for the checkboxes, brief text
strings, and limited numeric disclosures
included on the Form CA–1 execution
page (much like the execution pages for
electronic Form X–17A–5 Part III,
electronic Form 17–H, and the SBSE
Forms). Given the comparable technical
suitability of custom XML and Inline
XBRL for the disclosures in the Form
CA–1 execution page, the smaller file
sizes and more streamlined processing
of custom XML data compared to Inline
XBRL data, the custom XML
158 See

XBRL Letter at 5; 17 CFR 232.406.
EDGAR Filer Manual, Volume II at 8.2.20,
8.2.21, and 8.2.22.
159 See

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7275

requirement for the Form CA–1
execution page is appropriate.160
E. Form 19b–4(e)
1. Relevant Statutory Framework
Section 19(b) of the Exchange Act, as
amended, requires each SRO to file with
the Commission, in accordance with
such rules as the Commission may
prescribe, copies of any proposed rule,
or any proposed change in, addition to,
or deletion from the rules of such SRO
(collectively, a ‘‘proposed rule change’’)
accompanied by a concise general
statement of the basis and purpose of
such proposed rule change.161 Rule
19b–4(e)(1) provides that the listing and
trading of a new derivative securities
product by an SRO shall not be deemed
a proposed rule change under the
Exchange Act if the Commission has
approved, pursuant to section 19(b) of
the Exchange Act,162 the SRO’s trading
rules, procedures, and listing standards
for the product class that include the
new derivative securities product, and
the SRO has a surveillance program in
place for such product class.163
2. Background of Rule 19b–4(e)
As discussed above, Rule 19b–4(e)(1)
under the Exchange Act provides that
the listing and trading of a new
derivative securities product 164 by an
SRO shall not be deemed a proposed
rule change subject to certain
conditions. The Commission
determined that, when it has approved
an SRO’s trading rules, procedures, and
listing standards for the product class
that include the new derivative
securities product, and the SRO has an
adequate surveillance program in place
for such product class, the listing and
trading of the new derivative securities
product would be ‘‘reasonably and fairly
implied’’ by the SRO’s existing trading
rules, procedures, and listing standards,
and therefore, would not be deemed a
proposed rule change under Rule 19b–
4(c)(1).165
160 See also supra section II.A.3 and infra section
X.E.4 (discussing other structured data languages
that would result in smaller file sizes than Inline
XBRL, and the reasons why the Commission has not
required the use of such data languages under the
rule amendments).
161 See 15 U.S.C. 78s(b).
162 See 15 U.S.C. 78s(b).
163 See 17 CFR 240.19b–4(e)(1).
164 Rule 19b–4(e) defines a new derivative
securities product as ‘‘any type of option, warrant,
hybrid securities product or any other security,
other than a single equity option or a security
futures product, whose value is based, in whole or
in part, upon the performance of, or interest in, an
underlying instrument.’’ See 17 CFR 240.19b–4(e).
165 See Exchange Act Release No. 40761 (Dec. 8,
1998), 63 FR 70952 (Dec. 22, 1998) (‘‘Rule 19b–4(e)

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For purposes of Rule 19b–4(e)(1),
SROs have submitted, and the
Commission has approved pursuant to
section 19(b)(2) of the Exchange Act,
trading rules, procedures, and listing
standards for several types of new
derivative securities products including,
for example, exchange-traded funds,
index-linked securities and other
exchange-traded structured products,
and narrow and broad-based index
options.166
As expressed in the Rule 19b–4(e)
Adopting Release, the Commission
adopted Form 19b–4(e) in order for the
Commission to maintain an accurate
record of all new derivative securities
products traded on the SROs in order to
notify the Commission when an SRO
begins to trade a new derivative
securities product not required to be
submitted as a proposed rule change to
the Commission for approval.167 The
Commission also stated that it would
make Forms 19b–4(e) public.168 At the
time of the adoption of Rule 19b–4(e),
the Commission estimated the new rule
would eliminate approximately 45 SRO
rule filings each year,169 and the
information regarding new derivative
securities products required pursuant to
Rule 19b–4(e) was required to be
submitted using a paper Form 19b–4(e).
3. Previous Requirements for Filing
Form 19b–4(e)

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Under Rule 19b–4(e)(2)(ii) prior to
these amendments, SROs were required
to submit Form 19b–4(e) 170 to the
Commission within five business days
after commencement of trading a new
Adopting Release’’). See also 17 CFR 240.19b–
4(c)(1).
166 See, e.g., Exchange Act Release Nos. 42787
(May 15, 2000), 65 FR 33598 (May 24, 2000) (SR–
Amex–2000–14) (approving generic listing
standards for exchange traded funds called Portfolio
Depositary Receipts and Index Fund Shares); 45718
(Apr. 9, 2002), 67 FR 18965 (Apr. 17, 2002) (SR–
NYSE–2002–07) (approving generic listing
standards for Trust Issued Receipts); 55687 (May 1,
2007), 72 FR 25824 (May 7, 2007) (SR–NYSE–2007–
27) (approving generic listing standards for IndexLinked Securities); 48405 (Aug. 25, 2003), 68 FR
52257 (Sept. 2, 2003) (SR–ISE–2003–05) (approving
generic listing standards for narrow-based index
options); 78397 (June 22, 2016), 81 FR 49320 (July
27, 2016) (SR–NYSEArca–2015–110) (approving
generic listing standards for Managed Fund Shares);
and 88566 (Apr. 6, 2020), 85 FR 20312 (Apr. 10,
2020) (SR–CboeBZX–2019–097) (approving generic
listing standards for Exchange-Traded Fund
Shares).
167 See Rule 19b–4(e) Adopting Release, 63 FR at
70963.
168 See id. at 70964 n.139 (‘‘Form 19b–4(e) will
be publicly available through the Commission’s
Public Reference Room. In addition, the
Commission will endeavor to make the Forms
available on the Commission’s website.’’).
169 See Rule 19b–4(e) Adopting Release, 63 FR at
70964.
170 See 17 CFR 249.820.

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derivative securities product.171 In
addition, pursuant to the instructions
for completing Form 19b–4(e), SROs
were required to submit an original and
nine paper copies of a duly executed
Form 19b–4(e) with the Commission.172
4. Rescission of Form 19b–4(e)
The Commission is amending Rule
19b–4 to rescind Form 19b–4(e) and
instead require SROs to post on their
internet websites the information
previously included on Form 19b–4(e)
as proposed. More specifically, an SRO
will be required to post on its public
internet website, within five business
days after commencing the trading of a
new derivative securities product, the
information required in current Part I,
Items 2 through 9 of Form 19b–4(e) for
that product: 173 (a) type of issuer of new
derivative securities product (e.g.,
clearinghouse, broker-dealer,
corporation, etc.); (b) class of new
derivative securities product; (c) name
of underlying instrument; (d) if the
underlying instrument is an index, state
whether it is broad-based or narrowbased; (e) ticker symbol(s) of new
derivative securities product; (f)
market(s) upon which securities
composing the underlying instrument
trade; (g) settlement methodology of
new derivative securities product; and
(h) position limits of new derivative
securities product (if applicable). This
information must be provided using the
most recent versions of an XML schema
and the associated PDF renderer that
will be published on the Commission’s
website.174 This information generally
should be available at a prominently
posted hyperlink on the SRO’s website
that is free and accessible (without any
encumbrances or restrictions) by the
general public.
As was previously required in Part II
of Form 19b–4(e), an SRO is required to
provide on its website a representation
by a duly authorized SRO official that
the governing body of the SRO has duly
171 See Rule 19b–4(e)(2)(ii). Although Rule 19b–
4(e) relates to the listing and trading of new
derivative securities products by SROs, the only
SROs that list and trade new derivative securities
products and file Forms 19b–4(e) to the
Commission are national securities exchanges.
172 See Items II and III of the Instructions for
Completing Form 19b–4(e), 17 CFR 249.820.
173 Part I, Item 1, ‘‘Name of Self-Regulatory
Organization Listing New Derivative Securities
Product,’’ will not be necessary to include because
the table of new derivative securities products will
be on the website of the SRO that has listed and
is trading the new derivative securities product, so
the identity of the listing SRO will be self-evident.
The Commission also is making technical
amendments to remove an extraneous ‘‘s’’ at the
end of ‘‘trade’’ and to replace ‘‘comprising’’ with
‘‘composing’’ in the text of Rule 19b–4(e)(2)(ii)(F).
174 See 17 CFR 240.19b–4(e)(2)(ii), as amended.

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approved, or has duly delegated its
approval to such official for, the listing
and trading of the new derivative
securities product according to its
relevant trading rules, procedures,
surveillance programs, and listing
standards to assure that such products
are being listed and traded in
accordance with the SRO’s obligations
under Rule 19b–4(e), as well as an email
address to contact that official. The
requirement to provide an email address
for the SRO contact employee should
expedite communications between
Commission staff and the relevant SRO.
Any SRO that relies on Rule 19b–4(e) to
list and trade a new derivative securities
product continues to be subject to Rule
19b–4(e)(2)(i), which requires the SRO
to maintain at its principal place of
business a file, available to Commission
staff for inspection, of all relevant
records and information pertaining to
each new derivative securities product
traded pursuant to Rule 19b–4(e) for a
period of not less than five years, the
first two years in an easily accessible
place, as prescribed in Rule 17a–1 under
the Exchange Act.175 Thus, the SRO
trading a new derivative securities
product needs to maintain the relevant
records and information regarding the
new derivative securities product to
comply with the recordkeeping and
reporting requirements of Rule 19b–4(e).
As under the previous rule, and as
contemplated in the adoption of the
current rule, the Commission will
review SRO compliance through its
routine inspections of SROs.176
The electronic filing requirement
should provide the same information for
the Commission and the public as was
previously provided by Form 19b–4(e)
without necessitating the additional
steps of submitting a paper form
containing that information with the
Commission. Among other benefits,
electronic filing should increase
efficiencies and decrease costs related to
both the submission of Form 19b–4(e)
by an SRO and the Commission’s
processing of submitted Forms 19b–4(e).
As discussed above, since the
Commission adopted Rule 19b–4(e),
technology has evolved significantly
and the internet has played an
increasingly vital role in information
distribution.177 During this period, the
Commission has encouraged the
dissemination of information
electronically via the internet and other
automated systems and services.178 In
175 See
176 See

17 CFR 240.17a–1.
Rule 19b–4(e) Adopting Release, 63 FR at

70963.
177 See supra note 14.
178 Id. See also supra note 15.

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
addition, the Commission now receives
thousands of Forms 19b–4(e) per year
from the SROs, rather than the 45 per
year as stated in the Rule 19b–4(e)
Adopting Release, each of which is
submitted to the Commission and then
must be made public individually by
the Commission,179 and therefore the
submissions require, in the aggregate,
additional time to process before the
information contained in those Forms
becomes available for Commission
review and also publicly available.180
Requiring SROs to post the information
contained in the current Form 19b–4(e)
on their websites accomplishes the goal
outlined in the Rule 19b–4(e) Adopting
Release, for the Commission to maintain
accurate information regarding these
new derivative securities products,
while ensuring that information remains
publicly available.181 In addition,
requiring SROs to post that information
within 5 business days after
commencement of trading a new
derivative securities product, as the
previous rule required, will continue to
allow the Commission to determine that
an SRO has properly relied on the rule
and continue to do so in a timely
fashion.182 This is appropriate given the
large number of Forms 19b–4(e) that are
submitted currently as well as the
nature of the information contained in
those Forms, which is highly
standardized. Providing that
information on the relevant SRO’s
publicly available website renders that
information more readily accessible to
both the Commission and the public
than submitting numerous Forms 19b–
4(e) had done previously and has the
added benefit of eliminating the twostep process of an SRO submitting a
Form 19b–4(e) and then that Form being
made public through the Commission.
In addition, because that information is
subject to the relevant SRO’s books and
records obligations 183 and subject to the
Commission’s examination and
inspection authority,184 the accuracy of
the records for Commission review is
commensurate with the accuracy of the
information on the Forms 19b–4(e)

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179 See

id. at 70964 n.139.
180 See FR Doc. 2022–17308, 87 FR 49894 (Aug.
12, 2022) (Request to OMB for extension of Rule
19b–4(e) and Form 19b–4(e); SEC File No. 270–447;
OMB Control No. 3235–0504) (identifying 2,331
Forms 19b–4(e) submitted to the Commission based
on the average annual number of Forms 19b–4(e)
submitted in 2019, 2020, and 2021).
181 See Rule 19b–4(e) Adopting Release, 63 FR at
70963, 70964 n.139.
182 See 17 CFR 240.19b–4(e)(2)(ii).
183 See 17 CFR 240.17a–1.
184 See Rule 19b–4(e) Adopting Release, 63 FR at
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submitted to the Commission under the
previous rule.
One commenter, who agreed with
requiring Form 19b–4(e) to be prepared
in machine-readable form, stated that
Forms 19b–4(e) should instead be
submitted to EDGAR (or, alternatively,
that the Commission or another party
should create a registry where links to
these documents can be posted).185 The
commenter stated that this would
facilitate use for market participants,
who would be able to collect all needed
data in one location rather than set up
mechanisms to track new form postings
on multiple websites.186 The commenter
stated that such an approach would be
unlikely to increase the reporting
burden for SROs.187
The Commission disagrees that the
19b–4(e) information should be
submitted to EDGAR rather than posted
to SRO websites. The Commission
receives thousands of Forms 19b–4(e)
per year from the SROs and expects that
the products subject to Rule 19b–4(e)
will continue to number in the
thousands going forward. In addition,
the information to be provided under
Rule 19b–4(e) is limited to no more than
eight basic information items, including
ticker symbol, type of issuer, and
whether the underlying instrument is a
broad or narrow-based index. Given the
quantity of these products and the
limited set of information required to be
provided under Rule 19b–4(e) for each
new product, requiring EDGAR
submission for each of these products
would be an unduly burdensome
process compared to SRO website
posting, which will provide a readily
accessible interface for market
participants to access this data without
necessitating submission to EDGAR.
Similarly, a registry of links would add
an unnecessary layer of complexity in
making the information publicly
available when many market
participants are already familiar with
accessing SROs’ public websites, such
as those the SROs would have in place
under the amended rule. For these
reasons, the amended rules do not
include a requirement to centrally
submit Rule 19b–4(e) information to
EDGAR, nor do they require the creation
of a registry of links to Rule 19b–4(e)
postings.
The same commenter also stated that
XBRL should be used in place of custom
XML for the Rule 19b–4(e)
information.188 According to the
commenter, an XBRL requirement for
185 See

XBRL Letter at 6.
id.
187 See id.
188 See id.
186 See

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7277

the Rule 19b–4(e) information would
improve accessibility to the data
because it can be extracted by the same
tools used for other reported data
prepared in XBRL, and where
derivatives are reported in other filings
by SEC reporting entities, the data
(which includes facts that are already
defined as concepts in other
taxonomies) may be easily linked and
interoperable.189 The Commission
disagrees with the commenter that
XBRL is more suitable than custom
XML for the Rule 19b–4(e) information.
While XBRL is particularly suitable for
financial statements and extended
narrative disclosures, custom XML is
comparably suitable for the discrete set
of brief text strings that Rule 19b–4(e)
requires, and results in smaller file sizes
and therefore more efficient data
processing than XBRL does. The rule
amendments require custom XML rather
than XBRL for the Rule 19b–4(e)
information because the more efficient
data processing enabled by custom XML
justifies forgoing the XBRL
interoperability benefit that the
commenter describes.
Finally, the same commenter
encouraged the use of the Legal Entity
Identifier (‘‘LEI’’) for the entity
responsible for the derivative product
and a Financial Instruments Global
Identifier (‘‘FIGI’’) for the derivative
identifier.190 The commenter stated that
these two identifiers are both open, nonproprietary identifiers (for legal entities
and securities, respectively), and would
be extremely helpful for data users in
evaluating business and investment
risk.191 The Commission does not
disagree that the LEI and the FIGI would
provide benefits for the open and
precise identification of legal entities
and securities disclosed pursuant to
Rule 19b–4(e). However, the
Commission is not modifying the
content of Form 19b–4(e) to include an
LEI or FIGI requirement under the
amended rules because such changes
are beyond the scope of the
amendments which are intended to
provide for eliminating paper
submission of the information provided
189 See

id.
id.
191 See id. Another commenter specifically stated
that the Commission should require LEI to be
disclosed on the notices that Exchange Act Rule
15fi–3(c) requires, because structured data is more
useful when it contains a consistent identifier, like
the LEI, instead of varying names or identifiers.
According to the commenter, the absence of an LEI
requirement on the notices will lead to inconsistent
submissions that lack comparability. See Letter
from Stephan Wolf, CEO GLEIF (May 22, 2023)
(‘‘GLEIF Letter’’). The Commission responds to this
comment in a subsequent section of this release.
See infra section V.C.2.
190 See

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on Form 19b–4(e), rather than making
changes to information required to be
disclosed such as the replacement or
supplementation of SRO names and
ticker symbols for new derivatives
securities products with LEI or FIGI
requirements.
Thus, for the reasons discussed above,
the Commission is rescinding Form
19b–4(e) and is adopting the
amendments to Rule 19b–4(e) as
proposed.

These amendments are appropriate
because the manual signature
requirement under Rule 19b–4 is
redundant and therefore unnecessary
given that Form 19b–4, which is filed
electronically, already requires an
electronic signature.195 The comments
the Commission received on these
amendments to Rule 19b–4, Form 19b–
4, and the related instructions were
generally supportive of these
amendments.196

F. Rule 19b–4(j) and Form 19b–4

G. Conforming Technical Amendment
to Rule 202.3(b) Under the Exchange
Act
As discussed above, the Commission
is making a technical amendment to
conform its Informal and Other
Procedures to the changes herein to
Rules 6a–1, 6a–2, and 6a–3 with respect
to Form 1 filings and to Rule 6a–4 with
respect to Form 1–N filings, as
proposed. Specifically, the Commission
is making conforming changes to Rules
202.3(b)(2) and (b)(3) of its Informal and
Other Procedures 197 to clarify that
defective applications on Form 1 and
notices on Form 1–N, respectively, must
be returned to the Filer,198 and must not
be held by the Commission.199 While
Rules 202.3(b)(2) and (b)(3) currently
permit the Commission to hold
defective applications on Form 1 and
defective notices on Form 1–N, holding

1. Relevant Statutory Framework
Section 19(b) of the Exchange Act, as
amended, requires each SRO to file with
the Commission, in accordance with
such rules as the Commission may
prescribe, copies of any proposed rule,
or any proposed change in, addition to,
or deletion from the rules of such SRO
(collectively, a ‘‘proposed rule change’’)
accompanied by a concise general
statement of the basis and purpose of
such proposed rule change.192 Rule
19b–4, subject to certain exceptions,
requires an SRO to submit each
proposed rule change by electronically
filing Form 19b–4.193
2. Rule Change
The Commission is adopting the rule
change as proposed to remove the
requirement under 17 CFR 240.19b–4(j)
(‘‘Rule 19b–4(j)’’) that the signatory to
an electronically submitted Form 19b–4
manually sign a signature page or other
document authenticating,
acknowledging, or otherwise adopting
his or her signature that appears in
typed form within the electronic filing,
execute that document before or at the
time the rule filing is electronically
submitted, and retain that document for
its records in accordance with Rule 17a–
1. The Commission also is removing the
related language in Form 19b–4 and the
instructions to Form 19b–4 that a duly
authorized officer of the SRO manually
sign one copy of the completed Form
19b–4 and that the manually signed
signature page be maintained pursuant
to section 17 of the Exchange Act.194
192 See

15 U.S.C. 78s.
17 CFR 240.19b–4(b).
194 This amendment is for purposes of filing with
the Commission only and does not affect the
requirements with which certain SROs subject to
oversight by other regulatory agencies must
continue to comply. Currently, under Section F of
the instructions to Form 19b–4, a registered clearing
agency for which the Commission is not the
appropriate regulatory agency also shall file with its
appropriate regulatory agency three copies of the
form, one of which shall be manually signed,
including exhibits. A clearing agency that also is a
designated clearing agency shall file with the
Federal Reserve three copies of any form containing
an advance notice, one of which shall be manually

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193 See

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signed, including exhibits; provided, however, that
this requirement may be satisfied instead by
providing the copies to the Federal Reserve in an
electronic format as permitted by the Federal
Reserve. The Municipal Securities Rulemaking
Board (‘‘MSRB’’) also shall file copies of the form,
including exhibits, with the Federal Reserve, the
Comptroller of the Currency, and the Federal
Deposit Insurance Corporation. These requirements,
all promulgated pursuant to 15 U.S.C. 78q(c)(1),
remain in effect.
195 The Commission also is making a technical
amendment to replace ‘‘comprising’’ with
‘‘composing’’ in the text of Rule 19b–4(j).
196 See, e.g., Letter from Michael Wichkoski (June
17, 2023) (‘‘Wichkoski Letter’’); OCC 5/22/2023
Letter; Letter from Lars Wohlfahrt (Apr. 17, 2023)
(‘‘Wohlfahrt Letter’’).
197 See 17 CFR 202.3(b)(2) and (3).
198 For purposes of this Rule, the Commission
would return Form 1 and Form 1–N filings to Filers
by deleting the application or notice from EDGAR
and sending an email to the contact person
notifying the Filer: (i) that the application or notice
was deleted from EDGAR and thus is considered as
being returned under Rule 202.3(b)(2) or Rule
202.3(b)(3), respectively, of the Commission’s
Informal and Other Procedures, as applicable; (ii) of
the reason(s) for such return; and (iii) that,
therefore, the application or notice is not
considered filed with the Commission.
199 For purposes of this rule, an application on
Form 1 or a notice on Form 1–N is deemed
defective if: (i) it was not properly signed; (ii) it did
not contain the required information, including
exhibits; or (iii) the information provided was
presented in a manner that would make it difficult
for the Commission and its staff to conduct its
review of the application or notice. See 17 CFR
249.1 and 249.10.

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such applications or notices serves no
purpose, as defective Form 1 and Form
1–N filings do not contain sufficient
information for the Commission and its
staff to review such applications and
notices.200 In such situations, it is
appropriate to return the defective
filings to the Filers so that the Filers
may correct the defective filings.
Additionally, Rules 202.3(b)(2) and
(b)(3) 201 are being amended to update
the name of the Division of Trading and
Markets from the previously used
Division of Market Regulation.
III. Requirements for Clearing Agencies
To Electronically File Covered
Supplemental Materials
A. Preexisting Rule 17a–22
Prior to the amendments adopted in
this release, preexisting Exchange Act
Rule 17a–22 required that within 10
days after issuing, or making generally
available, to its participants or to other
entities with whom it has a significant
relationship, such as pledgees, transfer
agents, or SROs, any material
(including, for example, manuals,
notices, circulars, bulletins, lists or
periodicals), a registered clearing agency
shall file three copies of such material
with the Commission.202 A registered
clearing agency for which the
Commission is not the ARA at the same
time had to file one copy of such
material with its ARA.203 Since the
Updated Staff Statement was issued,
registered clearing agencies have been
submitting electronic copies of filings
required under Rule 17a–22 to the
Commission through a dedicated email
inbox, rather than submitting paper
copies.204
B. Amended Rule 17a–22
The Commission is amending Rule
17a–22, as proposed, to: (i) replace the
requirement to file supplementary
materials with the Commission or an
ARA in paper form with a requirement
to prominently post such materials on
the clearing agency’s internet website;
and (ii) reduce the timeframe for
compliance with the rule from 10 days
to 2 business days for the posting
requirement.205 By replacing the paper
200 Id.
201 See

17 CFR 202.3(b)(2) and (3).
17 CFR 240.17a–22.
203 See id.
204 See supra note 7.
205 In consultation with the Federal Reserve, the
Commission is removing the obligation to send an
additional paper copy to a clearing agency’s ARA
from Rule 17a–22. If the supplemental materials are
prominently posted on the clearing agency’s
internet website, all its regulatory authorities will
have access to them, removing the need to file an
additional paper copy. Separate from any
202 See

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
filing requirement for registered clearing
agencies with an electronic posting
requirement via the clearing agency’s
internet website, the amendment aligns
with the Commission’s larger-scale
objective tied to its mission of
enhancing the efficiency and
effectiveness of its regulatory regime for
registered clearing agencies under the
Exchange Act.
Rule 17a–22, as amended, requires
that within 2 business days after
issuing, or making generally available,
to its participants or other entities with
whom it has a significant relationship,
any material (including, for example,
manuals, notices, circulars, bulletins,
lists or periodicals) that is not otherwise
required to be posted on its internet
website pursuant to any requirement
under section 19(b) of the Exchange Act
or the rules thereunder, a registered
clearing agency shall prominently post
such material on its internet website.
The Commission received one
comment letter specifically addressing
the proposed amendments to Rule 17a–
22.206 In that comment letter, an equity
derivatives clearing agency registered
with the Commission, OCC, stated that
it supports the proposed amendments to
Rule 17a–22 because the rule, as
amended, removes duplicative and
administratively burdensome
requirements. However, OCC suggests
clarification on the scope of
supplemental materials that are made
‘‘generally available.’’ 207 As discussed
in more detail in the relevant sections
below, the Commission is not making
further changes to Rule 17a–22, as
proposed, but is providing certain
clarification to address OCC’s concern.

As discussed above, supplementary
materials required by Rule 17a–22 are
important to the Commission’s ongoing
supervision of clearing agencies, and the
timely posting of such materials ensures
that Commission supervision is
effectively considering the most current
information available to the clearing
agency and its participants.209 Clearing
agencies should already have
established internal policies and
procedures in place to meet these
posting requirements for proposed rule
changes, and these procedures could be
reasonably replicated to meet the
timeframes under the amendments to
Rule 17a–22. Second, by replacing the
requirement to file paper copies with a
requirement to post the materials on the
clearing agency’s internet website, the
time required to comply with the
amended rule (when compared to the
current rule) should be significantly
reduced. By eliminating the paper filing
requirement, clearing agencies should
no longer have to expend the time and
resources associated with copying,
packaging, and mailing three copies of
supplemental materials to the
Commission and, where applicable, the
ARA, which should in turn allow for
shorter compliance timeframes. Third, 2
business days for posting is reasonable
because the supplemental materials will
have already been prepared for
distribution to its participants or other
entities with whom it has a significant
relationship, and as such, should be
readily available for posting to the
clearing agency’s internet website
within the 2 business days.

1. Two-Day Timeframe for Compliance
Reducing the notice timeframe from
10 days to 2 business days is reasonable
and appropriate for three reasons. First,
the timeframe of 2 business days helps
ensure the timely dissemination of
information to affected market
participants and is consistent with a
registered clearing agency’s obligation
under Rule 19b–4(m) to update its
internet website to post any rule
changes filed pursuant to Exchange Act
Rule 19b–4 within two business days.208

Rule 17a–22, as amended, does not
change the scope of supplemental
materials to which the rule previously
applied. Accordingly, the amended rule
retains the language that any
supplemental material issued or made
generally available to a clearing agency’s
participants or other entities with whom
it has a significant relationship is
subject to Rule 17a–22. The amended
rule retains the list of illustrative
examples of types of supplemental
materials. In addition, copies of any
material issued or made generally
available to participants or other entities
with whom the clearing agency has
significant relationships (e.g., issuers,
transfer agents, custodian, service
providers, other non-participant entities
that avail themselves of clearing agency
services, etc.) are, under the current
rule, required to be filed, where
applicable.

requirements in Rule 17a–22, certain provisions in
section 17A of the Exchange Act require notice to
the ARA, and the amendments to Rule 17a–22 do
not affect those provisions. See, e.g., 15 U.S.C. 78q–
1(b)(5)(C).
206 See OCC 5/22/2023 Letter.
207 In its comment letter, OCC suggested that the
Commission clarify certain language in order to
avoid ambiguity on the scope of supplemental
materials made ‘‘generally available.’’ OCC 5/22/
2023 Letter at 4. This comment is discussed in more
detail below in Section III.C.3 below.
208 See 17 CFR 240.19b–4(m).

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2. Scope of Supplemental Materials

Because the significant relationships
vary across clearing agencies, the
Commission is deleting the list of
examples of such relationships from the
rule text. However, the removal of these
examples from the text of the rule is not
an indication that these entities are no
longer considered within the scope of
the rule. Rather, the Commission is
eliminating this list to ensure that
clearing agencies consider appropriately
the universe of entities with whom they
have a significant relationship, which
varies by registered clearing agency
because they serve different markets or
offer different services and may also
change over time as market practices
evolve. Issuers, transfer agents,
custodians, service providers, and other
non-participant entities that use the
clearing agency’s services continue to be
examples of the types of entities to
whom a clearing agency may provide
supplementary materials under the rule,
and the revisions are intended to avoid
confusion because certain types of
relationships, such as issuers and
transfer agents, exist in some markets
but not others. A clearing agency
generally should consider the markets it
serves, the services it offers, and the
universe of entities with whom it has a
significant relationship when
addressing its compliance with the rule.
While the scope of supplemental
materials subject to the rule remains
unchanged under the amended rule, the
Commission is adding new rule text to
expressly exclude any materials subject
to section 19(b) of the Exchange Act or
rules thereunder from the supplemental
materials posting requirement, and
thereby specify that the materials
subject to Rule 17a–22, as amended, are
distinct from any posting requirements
under section 19(b) and Rule 19b–4
thereunder. This added text is
consistent with the Commission’s stated
purpose of Rule 17a–22 when it was
adopted in 1980,210 and this change is
intended to avoid the imposition of
duplicative posting requirements.
Specifically, in the original Rule 17a–
22 Adopting Release, the Commission
also amended, among other things, the
requirements applicable to the filing by
SROs of proposed rule changes and
certain other materials under Rule 19b–
4 and Form 19b–4.211 There, the
Commission revoked a provision on
Form 19b–4B requiring SROs to file
notice of stated policies, practices, and
interpretations not deemed to be rules
because, in part, the provision
duplicated the filing requirements in
210 See

209 See

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211 Id.

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Rules 6a–3, 15Aj–1, and 17a–21.212
These rules required national securities
exchanges, registered securities
associations, and the MSRB,
respectively, to submit to the
Commission any material they made
generally available. Accordingly, in
conjunction with its revocation of the
above-noted provision of Form 19b–4B,
the Commission adopted Rule 17a–22,
which established a filing requirement
for registered clearing agencies parallel
to the filing requirement under Rules
6a–3, 15Aj–1, and 17a–21. In so doing,
the Commission distinguished between
materials subject to Rule 19b–4 and
those subject to the supplemental
material rules. The inclusion of new text
relating to Rule 19b–4 is meant to
specify clearing agencies’ obligations
under Rule 17a–22 as being separate
and distinct from the obligation under
Rule 19b–4. In general, a clearing
agency should consider within the
scope of Rule 17a–22 policies,
procedures, and other documents that
help explain to affected parties the rules
of the clearing agency but are not also
required to be filed under Rule 19b–4.
3. Meaning of ‘‘Generally Available’’

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The existing requirement under Rule
17a–22 to post only those materials that
the clearing agency is ‘‘making generally
available’’ remains unchanged from the
original rule and as proposed. Any
document that is made ‘‘generally
available’’ to a wide or diverse group of
individuals or entities should be
considered supplemental material and
as such, posted to the clearing agency’s
website. In the Commission’s
experience, most, if not all, of the filings
required by Rule 17a–22 are already
being posted on a registered clearing
agency’s website. Moreover, as stated in
the Proposing Release, the Commission
does not envision that those documents
of a confidential or sensitive nature, or
that would cause harm if publicly
disclosed, fall within the scope of the
rule.
OCC requested that the Commission
clarify Rule 17a–22’s text relating to the
scope of certain supplemental materials
made ‘‘generally available’’ to certain
212 Id. See also 17 CFR 240.6a–3; 17 CFR
240.15Aj–1; and 17 CFR 240.17a–21. Rule 6a–3 was
amended in 2001 to allow a national securities
exchange the option of posting supplementary
information to its website and certifying that the
information available on its website is accurate as
of its date. See Exchange Act Release No. 44692
(Aug. 13, 2001), 66 FR 43721 (Aug. 20, 2001). Since
the adoption of this amendment, usage of and
familiarity with the internet among affected market
participants has increased substantially, and so in
amending Rule 17a–22, it is appropriate to
transition the requirement in Rule 17a–22 for
clearing agencies solely to internet posting.

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wide groups of entities with whom the
clearing agency has a significant
relationship, particularly as it relates to
materials that may be considered
confidential or sensitive. In particular,
OCC stated that the amended rule could
be interpreted to mean that any
materials provided to a clearing
agency’s members or other entities (i.e.,
a wide or diverse group of entities)
could be considered ‘‘generally
available’’ and therefore necessarily not
confidential or sensitive.213 OCC stated
that, while some of the information a
clearing agency may provide to clearing
members or other entities to whom it
has a significant relationship is
appropriate to post publicly on its
website, other materials provided to
entities with whom it has a significant
relationship are not appropriate for
public disclosure. Examples of such
materials include, according to OCC,
instructions and technical information
relating to connectivity, security
practices, the operation of systems that
only participating exchanges may
access, or directories with direct contact
information for employees within the
clearing agency.214 Consequently, OCC
suggested that the Commission clarify
that materials do not become ‘‘generally
available’’ solely because such materials
are provided to a wide or diverse group
of entities.215
Some of the ambiguity, OCC
explained, is created by Rule 17a–22
rule text that refers to ‘‘issuing, or
making generally available’’ materials to
relevant entities.216 OCC states that
neither the existing rule nor the
proposed rule defines the text ‘‘issuing
or making generally available’’ to
exclude documents of a confidential or
sensitive nature that a clearing agency
may provide to its clearing members or
other participants as a group, even if
those documents could cause harm if
publicly disclosed.217 The commenter
also proposes that the Commission
consider revising the text to remove the
reference to ‘‘issuing,’’ which appears to
OCC to be duplicative to the reference
to ‘‘making.’’ 218 OCC states that the
inclusion of ‘‘service providers’’ in the
Commission’s discussion of entities
with whom a clearing agency has a
significant relationship for purposes of
Rule 17a–22 provides further support
for its ‘‘understanding.’’ 219 Such service
213 OCC

5/22/2023 Letter at 5.

214 Id.
215 Id.
216 Id.
217 Id.

at 5–6.

218 Id.
219 OCC 5/22/2023 Letter at 6. As discussed in the
proposing release, clearing agencies must make an
assessment as to whether any type of entity,

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providers could include, among many
others, cybersecurity and cloud services
providers, ‘‘with whom the Commission
would presumably expect the clearing
agency to have sensitive and
confidential communications.’’ 220 For
such communications to fall outside of
Rule 17a–22, OCC asserts that there
must therefore be a category of
communications with even a wide
group of service providers or other
relevant entities that are not considered
‘‘generally available.’’ The Commission,
OCC suggests, should therefore clarify
that not all documents provided to
entities with whom a clearing agency
has a significant relationship are,
through such provisions, made
‘‘generally available,’’ even when
provided to those entities as a group.
That is, the Commission should clarify
that only those materials provided to
entities with whom a clearing agency
has a significant relationship that the
clearing agency also makes generally
available are subject to Rule 17a–22.221
As previously discussed above and
stated in the Proposing Release, any
document made ‘‘generally available’’ to
a wide or diverse group of individuals
or entities should be considered
supplemental materials and as such
posted to the clearing agency’s website.
However, documents of a confidential
or sensitive nature, or those that would
cause harm if publicly disclosed, fall
outside the scope of both preexisting
Rule 17a–22 and amended Rule 17a–22
because such documents would not be
sent to a wide or diverse group of
individuals.222 Clearing agencies often
send certain documents that relate to
sensitive or confidential information,
such as security systems, sensitive trade
or financial data, and surveillance
methods, to a large number of persons
or entities with whom the clearing
agency has a significant relationship,
such as participants or service
providers, or to a smaller group of
diverse persons or entities, such as
technology companies that interface
with clearing agency. However,
distributions of this kind are not
‘‘generally available’’ because they are
not intended for public viewing. To
avoid causing harm to the clearing
agency, markets, or participants,
clearing agencies have a vested interest
in ensuring that such sensitive or
confidential material is distributed to

Frm 00032

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including service providers, is the type of entity
with whom the clearing agency has a significant
relationship and whether materials provided to that
type of entity are made ‘‘generally available.’’ See
Proposing Release at 23945–23946.
220 Id.
221 Id. at 6.
222 See Proposing Release at 23945–23946.

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the least number of persons or entities
that have a need to know the
information contained in the sensitive
or confidential materials. This approach
thereby ensures a limited distribution of
the documents. In other words, by their
nature, documents which are sensitive
or confidential would not be considered
documents made ‘‘generally available’’
and therefore would not be
supplementary material. Therefore, such
documents also would be beyond the
scope of the rule’s requirements.
In determining whether supplemental
materials should be considered
‘‘generally available’’ and thus, subject
to the posting requirements of Rule 17a–
22, clearing agencies generally should
consider all the facts and circumstances
related to making public supplementary
materials to a specific group or groups
of persons or entities. For example, a
clearing agency generally could
consider the number and type of
persons or entities to whom the
supplemental materials are distributed
in determining whether materials are
‘‘generally available.’’ A clearing agency
generally could also consider the nature
of the group to whom the distribution is
made and the nature of the materials
being distributed, particularly as it
relates to harm that would result if
publicly disclosed, and whether the
limited distribution is consistent with

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its rules or policies for the treatment of
confidential or sensitive information.
With regard to OCC’s suggestion to
revise the rule text to remove the
reference in the rule text to ‘‘issuing’’
because it is ambiguous or duplicative
with the reference to ‘‘making generally
available,’’ the Commission does not
agree.223 The Commission is retaining
the terminology as proposed to ensure
that supplementary materials are within
scope of the rule regardless of the
particular mechanism a clearing agency
may choose or use to distribute them.224
4. Requirement to ‘‘Prominently Post’’
Finally, in the amendment to Rule
17a–22 that requires the clearing agency
to ‘‘prominently post’’ any
supplemental material subject to the
amended rule on the clearing agency’s
223 OCC

5/22/2023 Letter at 5–6.
the release proposing Rule 17a–22 in 1979,
the Commission intended to establish for registered
clearing agencies a filing requirement that generally
paralleled the filing requirements imposed under
Rules 6a–3, 15Aj–1, and 17a–21 (requiring national
securities exchanges, registered securities
associations, and the MSRB to make certain
materials available to the Commission), thus
requiring clearing agencies to file with the
Commission material that they ‘‘distribute or make
generally available’’ to their participants, pledgees
or transfer agents. Exchange Act Release No. 15838
(May 18, 1979), 44 FR 30924, 30929 (May 29, 1979).
The rule text, as proposed in 1979 and then adopted
in 1980, refers to ‘‘issuing or making generally
available.’’ Id. at 30934; Exchange Act Release No.
17258, 45 FR 73914 (Nov. 7, 1980).
224 In

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7281

website, the Commission is interpreting,
as proposed, ‘‘prominently’’ to mean
that the supplemental materials are
readily identifiable and accessible on
the website for as long as the
information remains applicable to
affected parties. If access to the
supplemental materials requires indepth familiarity with the website or is
not readily apparent because it requires
searching through multiple layers to
access the information, the
supplemental materials generally would
not be considered prominently posted.
A clearing agency generally should
make supplemental materials available
at a prominently posted hyperlink on
the clearing agency’s website that is free
and accessible (without any
encumbrances or restrictions) by the
general public. To the extent such a link
does not already exist, a registered
clearing agency could consider creating
a specific web page that identifies and
catalogues (such as through a list of
hyperlinks) the supplemental materials
that it maintains pursuant to Rule 17a–
22.
IV. Requirements to Electronically File
Broker-Dealer, OTC Derivatives Dealer,
and SBS Entity Reports
The Commission is requiring the
following forms and reports to be filed
in electronic format on EDGAR:

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Form or Report
Form X-17A-5 Part III: Annual reports
and related annual filings.

Form 17-H: Risk Assessment Report for
Brokers and Dealers.

Form X-17A-5 Part III: Annual reports
and related annual filings.

Filer Type
Broker or Dealer

Broker or Dealer

Amendments
The form (17 CFR 249.617)
and Exchange Act Rules
17a-5 and 17a-12 (17 CFR
240. l 7a-5; 17 CFR 240. l 7a12).
Rule lOl(a) of Regulation
S-T (17 CFR232.101(a)).
Exchange Act Rule 17h-2T
(17 CFR 240. l 7h2-T).
Rule lOl(a) of Regulation
S-T.
The form (17 CFR 249.617)
and Exchange Act Rule
18a-7 (17 CFR 240.18a-7).

SBS Entity

Rule lOl(a) of Regulation
S-T.

The Commission proposed to amend
Rules 17a–5, 18a–7, and 17a–12 to
require that the annual reports and
related annual filings that firms must
file under Rules 17a–5, 18a–7, and 17a–
12 be filed with the Commission
electronically on EDGAR in a structured
data language.225 Specifically, the
Commission proposed to amend
paragraphs (d)(6) and (k) of Rule 17a–5,
paragraph (c)(6) of Rule 18a–7, and
paragraphs (b)(6), (k), (l), and (m) of
Rule 17a–12 to provide that the annual
reports and related annual filings must
be filed with the Commission
electronically on EDGAR in accordance
with the EDGAR Filer Manual, as
defined in Rule 11 of Regulation S–T,
and must be filed in accordance with
the requirements of Regulation S–T.226
The proposed paragraphs also provide
that the annual reports must be
submitted in Inline XBRL (i.e., as an
Interactive Data File in accordance with
Rule 405 of Regulation S–T).227 The
225 See Proposing Release at 23948–50. For
further discussion of the structured data
requirements, including Inline XBRL requirements,
see infra section VII.A.
226 See Proposing Release at 23948.
227 See id.; see also Rule 405(a)(3) of Regulation
S–T, which specifies Inline XBRL as the data

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EDGAR Filer Manual would be updated
to reflect these amendments to Rules
17a–5, 18a–7, and 17a–12.228 First-time
EDGAR filers would need to obtain
EDGAR access credentials.229
As discussed in section VII of this
release, most commenters supported
filing the annual reports and related
filings electronically on EDGAR,230
although one commenter encouraged
the Commission to address EDGAR’s
technical deficiencies, stating that
‘‘[h]over-over definitions and links to
relevant rules should [] be standard.’’ 231
The Commission has stated that it has
‘‘engaged in a multi-year, multi-phase
effort to modernize the EDGAR system,
including both internal and publicfacing components. Security and
modernization enhancements were
deployed in June 2020, focusing on
technology upgrades internal to the
language to be used for the Interactive Data File. See
17 CFR 232.405(a)(3).
228 See Proposing Release at 23949.
229 Instructions for obtaining EDGAR access
credentials are on the Commission’s website at
https://www.sec.gov/divisions/marketreg/brokerdealer-edgar-access-credentials.htm.
230 See, e.g., SIFMA 5/22/2023 Letter at 13;
Wohlfahrt Letter.
231 See Letter from John Sage (Apr. 18, 2023)
(‘‘Sage Letter’’).

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system.’’ 232 The two changes the
commenter requested have been
included in prior updates to the EDGAR
system.233 Given the benefits of
electronic filing discussed in the
Proposing Release, commenter support
for electronic filing, and the fact that the
issues identified by this commenter
have already been addressed, the
Commission is adopting as proposed the
requirement to file broker-dealers’ and
SBS Entities’ annual audits
electronically on EDGAR.
The Commission also proposed to
require firms filing annual reports or
annual supplemental reports with the
Commission under Rules 17a–5, 18a–7,
and 17a–12 to apply machine-readable
Inline XBRL data ‘‘tags’’ to the
disclosures contained in those
documents before filing them through
EDGAR.234 These data tags can include
numerical detail tags (which are used
for tagging individual data points) for
232 See Annual Report on SEC website
Modernization Pursuant to Section 3(d) of the 21st
Century Integrated Digital Experience Act (Dec.
2022), available at https://www.sec.gov/files/21stcentury-idea-act-report-2022–12.pdf.
233 See, e.g., Annual Report on SEC website
Modernization Pursuant to Section 3(d) of the 21st
Century Integrated Digital Experience Act (Dec.
2022), available at https://www.sec.gov/files/21stcentury-idea-act-report2022–12.pdf.
234 See Proposing Release at 23949.

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individual reported numeric values,
such as line items on a financial
statement, or text block tags for textual
narratives, such as the discussions in
the notes to financial statements.235 In
complying with the Inline XBRL
requirements, filers could use Inline
XBRL tagging software to apply Inline
XBRL tags to their reports before
submitting them to EDGAR, or could
employ a tagging service provider to
apply the Inline XBRL tags to their
reports on their behalf.236
The proposed Inline XBRL
requirement applies to all disclosures
required by Form X–17A–5 Part III other
than disclosures required on the facing
page.237 The facing page of Form X–
17A–5 Part III is currently a fillable form
that EDGAR converts into a custom
XML data language and would remain
so.238
After considering commenters’
concerns discussed below, the
Commission is adopting as proposed the
requirement that annual reports or
supplemental reports filed under Rules
17a–5, 18a–7, and 17a–12 utilize
machine-readable Inline XBRL data tags
with respect to the disclosures
contained in such annual reports or
annual supplemental reports.
As the Commission explained in the
Proposing Release,239 there will be
substantial benefits to having firms file
these reports in a machine-readable
format.240 Specifically, the structuring
requirements will make the information
included on the reports more readily
accessible for retrieval, aggregation, and
comparison across different brokerdealers, OTC derivatives dealers,
SBSDs, and MSBSPs, and across
different time periods, as compared to
an unstructured PDF, HTML, or ASCII
format requirement for the reports.241
This will benefit investors and markets
by enabling more timely and detailed
supervision of filers, and by providing
public users with a more efficient means
of accessing and analyzing the publicly
disclosed portion of the reports (such as
the Statement of Financial Condition
and the notes thereto). For example,
Commission staff could leverage the
machine-readability of the
computational schedules to
automatically flag any mathematical
inconsistencies or calculation errors
therein. In addition, the structured data
requirement will enable EDGAR to
235 See

id.
id.
237 See id. at 23950.
238 See id.
239 See id. at 23949–50.
240 See id.
241 See id.
236 See

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perform technical validations (i.e.,
programmatic checks to ensure the
documents are appropriately
standardized, formatted, and complete)
upon intake of the reports, thus
improving the quality of the filed data
by decreasing the incidence of nonsubstantive errors, such as the omission
of required disclosures that should
always be present).242
Further, the Commission estimated
the compliance costs associated with
machine-readable format to be relatively
modest for many Form X–17A–5 Part III
filers, including smaller broker-dealers
and filers affiliated with public
companies that already have experience
structuring data.243 One commenter
asserted that the Commission’s
structured data cost estimates in the
proposing release were too low, and
conveyed one firm’s estimates that it
would cost $20,000 to $40,000 per year
per registrant to retain an XBRL tagging
service provider and $20,000 to $30,000
per year per entity to purchase the
tagging software.244 The commenter
described multiple fundamental
operational changes that, in its view,
firms will need to undergo as a result of
the structured data requirements,
including hiring additional personnel
that are proficient in XBRL and XML,
developing processes for converting the
relevant data into XBRL and XML and
uploading that data to EDGAR, training
new and existing personnel on these
processes, and overhauling systems and
operations to integrate the XBRL/XML
production and processing.245 Based on
the Commission’s experience with firms
submitting structured disclosures in
other contexts (e.g., operating company
periodic reports and fund prospectus
risk/return summaries), the Commission
disagrees that the structured data
requirements will require every firm to
both license XBRL tagging software and
contract the services of a third-party
XBRL tagging service provider. Firms
that have submitted structured
disclosures to the Commission by fully
outsourcing XBRL tagging requirements
to a third-party service provider have
likely not needed to also license XBRL
tagging software as a result of the
decision to outsource.246 By the same
242 For additional discussion of benefits arising
from structured data requirements, including
responses to public comments that specifically
address the topic, see infra section X.C.1.b.
243 See Proposing Release at 23995.
244 See SIFMA 5/22/2023 Letter at 5.
245 See id. at 4.
246 C.f., Yu Cong, Ayishat Omar, Huey-Lian Sun;
Does IT Outsourcing Affect the Accuracy and Speed
of Financial Disclosures? Evidence from PreparerSide XBRL Filing Decisions, Journal of Information
Systems, 1 Jun 2019; 33 (2): 45–61 (explaining that
‘‘to comply with the SEC’s XBRL mandate, firms

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7283

token, the Commission disagrees that
the structured data requirements under
the rule amendments will obligate every
filer or submitter to undergo each of the
fundamental operational changes the
commenter describes. Firms that
outsource compliance with structured
data requirements to a third-party
service provider rather than comply
with the structured data requirements
in-house will not need to hire additional
personnel that are proficient in XBRL
and XML, develop processes for
converting the relevant data into XBRL
and XML and uploading that data to
EDGAR, train new and existing
personnel on these processes, or
overhaul systems and operations to
integrate the XBRL/XML production,
because the third-party service provider
would take such actions as necessary.
Firms that choose not to outsource
compliance with Inline XBRL
requirements will incur some, but not
all, of the costs that the commenter
describes. These firms will not be
required to hire additional personnel
that are proficient in XBRL, because
firms can instead license Inline XBRL
software tools that allow staff without
XBRL proficiency to apply Inline XBRL
tags to regulatory disclosures without
any need to overhaul the firm’s systems
or operations. These firms will,
however, likely need to implement
processes for the use of such software
tools (i.e., applying Inline XBRL tags
and validating the tagged regulatory
disclosures), and will need to train their
staff on these processes.247
Also, while the Commission estimates
that some clearing agencies and
exchanges will incur costs within the
$20,000 to $30,000 range to structure
Form CA–1 and Form 1, the
Commission does not expect all brokerdealers (especially smaller brokerdealers) will incur the same level of
costs to structure the annual audited
report, in part because many brokerdealers are comparable to smaller
reporting companies that file structured
Commission filings and that incur
significantly less than that range to
have been using in-house resources or outsourcing
to third-party vendors to create their XBRL
formatted financial statements’’ and that ‘‘ . . .
many firms, especially smaller firms that lack
extensive resources, have outsourced the creation
and filing process . . . ’’).
247 The Commission includes these process and
training costs in its estimates of initial structured
data implementation costs and burdens in the
Economic Analysis and Paperwork Reduction Act
Analysis sections of this release. See infra section
X.C.2.b (describing and quantifying initial
implementation costs arising from the structured
data requirements); see also infra sections IX.D.2,
IX.D.5, IX.D.9.a, and IX.D.15 (estimating higher
structured data burdens for the first year of
compliance compared to subsequent years).

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comply with such structuring
obligations. More specifically, the
Commission estimates larger brokerdealers will incur approximately $6,000
to $18,000 to structure Form X–17A–5
Part III in the first year and $4,000 to
$12,000 to structure Form X–17A–5 Part
III in subsequent years, while smaller
broker-dealers will incur approximately
$500 to $1,300 to structure Form X–
17A–5 Part III in the first year and $300
to $1,000 to structure Form X–17A–5
Part III in subsequent years.248 While
the Commission is mindful of imposing
significant additional costs, especially
on smaller broker-dealers, for which an
added compliance cost comprises a
higher proportion of overall compliance
costs than an equivalent cost for larger
broker-dealers, the Commission does
not believe structured data compliance
costs in the estimated range of $300 to
$1,300 for a report filed once per year
will impose significant hardships on
smaller broker-dealers.
The Commission estimated at
proposal that (1) all respondents
affiliated with public reporting
companies already subject to Inline
XBRL requirements would incur
reduced burdens and costs because such
respondents would be able to leverage
the licenses or service agreements as
well as the Inline XBRL tagging
experiences of those affiliates; (2)
respondents choosing to outsource
Inline XBRL tagging to a third-party
service provider would not incur initial
implementation costs or burdens; and
(3) respondents complying with Rule
18a–7 under a substituted compliance
order pursuant to Exchange Act Rule
3a71–6 would not incur any additional
costs related to structured data.
With respect to the first estimate, one
commenter stated that this burden and
cost reduction is dependent on the
contractual arrangements that firms
have with third-party providers, and on
the internal staffing structure for each
company.249 In response to this
comment, the Commission is now
estimating that only half of the affiliated
respondents will incur reduced burdens
and costs.250
With respect to the second estimate,
one commenter stated that structured
data requirements will impose burdens
associated with the process of
diligencing, negotiating with, and
248 See infra section X.C.2.b (describing these
estimated cost ranges in greater specificity). The
Commission estimates some larger broker-dealers
that are affiliated with public reporting companies
will incur approximately $2,000 to $6,000 to
structure Form X–17A–5 Part III. See id.
249 See XBRL Letter at 11.
250 See infra sections IX.D.9 and section X.C.2.b.

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onboarding third parties.251 The
Commission agrees, and because these
burdens apply to respondents that
outsource Inline XBRL tagging to thirdparty service providers, the Commission
has increased the number of
respondents it estimates will incur
initial structured data implementation
burdens.252
With respect to the third estimate, one
commenter stated that the Commission
should allow firms relying on
substituted compliance to continue
submitting home-country reports in
their current form, explaining that the
organization and requirements of these
reports is often different from U.S.
reports.253 The Commission agrees that
the first time a respondent relying on
substituted compliance (or its thirdparty tagging service provider) applies
Inline XBRL tags to its home country
report, it will incur the additional
burden of determining which
disclosures within its home country
report are responsive to U.S. disclosure
requirements and must therefore be
tagged.254 To capture this additional
step, the Commission is increasing the
estimated initial Inline XBRL tagging
burdens and costs compared to the
estimates in the proposing release.
The Commission more fully explains
the bases for these estimated cost
ranges—which are generally consistent
with those in the Proposing Release
because the cost considerations relevant
to Form X–17A–5 Part III structuring
have not materially changed since the
publication of the Proposing Release.255
251 See

SIFMA 5/22/2023 Letter at 4.
infra section IX.D.9.
253 See SIFMA 5/22/2023 Letter at 7. Although
the comment referred specifically to home-country
equivalents to CCO reports, home-country
equivalents to Rule 18a–7 annual reports and
related filings can also vary from U.S. reports in
their organization and requirements.
254 See infra section IX.D.9.
255 See id. As explained further in the Economic
Analysis section, the Commission is making several
changes to its Form X–17A–5 Part III structured
data cost and burden estimates compared to the
proposal. First, whereas the proposed estimates
assumed all larger broker-dealer affiliates of public
reporting companies would incur reduced
structured data costs and burdens, the revised
estimates assume only some of these broker-dealers
will incur reduced costs and burdens. Second,
whereas the proposed estimates assumed that
broker-dealers which fully outsource XBRL
compliance to third-party service providers would
not incur initial implementation costs in the first
year of compliance, the revised estimates assume
that outsourcing broker-dealers will incur some
initial implementation costs (specifically, the cost
of negotiating, diligencing, and onboarding the
third-party tagging service provider) in the first year
of compliance. Third, whereas the proposed
estimates did not assume firms relying on
substituted compliance would incur different costs
to structure Form X–17A–5 Part III than other
broker-dealers would, the revised estimates include
an additional initial implementation cost for firms
252 See

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The Commission is also phasing in the
machine readability requirements of the
rule amendments, as discussed in
section VIII below, to further ameliorate
compliance concerns with respect to
smaller broker-dealers.
The Commission also proposed to add
a new paragraph (e)(2)(iii) to Rule 17a–
5, new paragraph (d)(1)(iii) to Rule 18a–
7, and new paragraph (c)(3) to Rule 17a–
12, which would require the notarized
oath or affirmation to be kept ‘‘for a
period of not less than six years, the first
two years in an easily accessible place
and in accordance with the
requirements of’’ Rule 17a–4, 18a–6, or
17a–12, as applicable.256 The
Commission also proposed to
redesignate current paragraph (c)(3) of
Rule 17a–12 as paragraph (c)(4) due to
the insertion of new paragraph (c)(3).
The Commission did not receive
comment on the proposal to keep the
oath or affirmation for at least six years,
the first two years in an easily accessible
place. The Commission is adopting this
requirement as proposed.
However, the Commission received
comment asking to remove the
requirement for the annual audit’s oath
or affirmation to be notarized.257 The
Commission has considered the
comment and agrees that the
notarization requirement can be
eliminated because the Commission is
adopting amendments to ensure that
electronic signatures are genuine. More
specifically, as discussed in section
VI.D.2. of this release, the Commission
is amending its signature requirements
in Rules 17a–5, 17a–12, and 18a–7 so
that electronic signatures are permitted,
but only if they are authenticated. Given
the Commission’s desire to modernize
its intake of these forms to an electronic
format and the safeguards it is adopting
to ensure that electronic signatures are
genuine, the notarization requirement
can be eliminated to be consistent with
other filings the Commission receives
electronically, such as Form 10–K,
which is also not notarized.258 For these
reasons, the Commission is amending
Part III of Form X–17A–5 (i.e., the
annual audit’s cover page) to remove the
signature line for the notary public, and
is adopting the six year record retention
requirement, but is not adopting the
word ‘‘notarized’’ originally included in
relying on substituted compliance to structure Form
X–17A–5 Part III.
256 See paragraph (e)(2)(iii) of Rule 17a–5, as
proposed to be amended; paragraph (d)(1)(iii) of
Rule 18a–7, as proposed to be amended; paragraph
(c) of Rule 17a–12, as proposed to be amended.
257 See SIFMA 5/22/2023 Letter at 9–10; see also
Integrated Solutions Letter at 3.
258 See Commission Form 10–K, available at
https://www.sec.gov/files/form10-k.pdf.

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the six year record retention
requirement in paragraph (e)(2)(iii) of
Rule 17a–5, paragraph (d)(1)(iii) of Rule
18a–7, and paragraph (c)(3) of Rule 17a–
12, as proposed to be amended.259
Finally, SBS Entities relying on a
Commission substituted compliance
order also will continue to not be
required to provide a notarized oath or
affirmation with their annual audit
submission to the Commission.260
Another commenter requested that
the Commission permit a firm’s
Financial and Operations Principal
(‘‘FinOp’’) to sign the oath or affirmation
on its behalf.261 Under Financial
Industry Regulatory Authority
(‘‘FINRA’’) rules, persons engaged in the
investment banking or securities
business of a FINRA member must
register with FINRA and pass exams
administered by FINRA to help ensure
competence in specific areas of a brokerdealer’s business.262 One such category
is Financial and Operations
Principal.263 Accordingly, while a
FinOp plays an important role for a
broker-dealer, under FINRA rules, the
FinOp need not be an officer or owner
of the broker-dealer. It is important the
person signing the oath or affirmation be
an officer or an owner to ensure that a
person with responsibility for the affairs
of the broker-dealer signs such oath or
affirmation. However, nothing would
prevent a FinOp who is also an officer
or owner of the broker-dealer from
signing the oath or affirmation in the
person’s capacity as an officer or owner.
In light of the requirement that the
annual reports and related annual
259 See Part III of Form X–17A–5, as amended;
paragraph (e)(2)(iii) of Rule 17a–5, as amended;
paragraph (d)(1)(iii) of Rule 18a–7, as amended;
paragraph (c)(3) of Rule 17a–12, as amended. The
compliance date for this amendment to Form X–
17A–5 Part III will take effect before the EDGAR
system can be updated to remove the checkbox to
acknowledge that the oath or affirmation has been
notarized. A firm’s oath or affirmation is not
required to be notarized after the compliance date
for this amendment to Form X–17A–5 Part III, even
though the EDGAR system may continue to ask
firms to check a box if the oath or affirmation is
notarized in the interim period until the EDGAR
system receives the required update.
260 See SIFMA 5/22/2023 Letter at 10 (asking the
Commission to confirm that firms relying on
substituted compliance continue to not be required
to submit a notarized oath or affirmation with their
annual audit submission to the Commission).
261 See Integrated Solutions Letter at 3.
262 See FINRA Qualification Exams available at
https://www.finra.org/registration-exams-ce/
qualification-exams; See also FINRA Rule 1210
(stating that each person engaged in the investment
banking or securities business of a member must be
registered with FINRA as a representative or
principal in each category of registration
appropriate to the person’s functions and
responsibilities as set forth in FINRA Rule 1220,
unless exempt from registration under FINRA Rule
1230).
263 See FINRA Rules 1220(a)(4) and 1210.01.

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filings under Rules 17a–5 and 18a–7 be
filed electronically on EDGAR, the
Commission is amending the
confidentiality provisions of the first
sentence of paragraphs (e)(3) of Rule
17a–5 and (d)(2) of Rule 18a–7. Those
sentences contain requirements that
certain parts of the reports be ‘‘bound
separately’’ and that certain pages be
‘‘stamped confidential,’’ which do not
apply to the process of designating
portions of the annual reports
confidential when filing them
electronically on EDGAR.264 Therefore,
the Commission proposed to amend the
confidentiality provisions to conform to
the electronic process for filing on
EDGAR. The Commission proposed to
amend the first sentence of paragraph
(e)(3) of Rule 17a–5 and paragraph (d)(2)
of Rule 18a–7 to state that the annual
reports ‘‘may be filed as: (i) One public
document; or (ii) Two documents: (A) A
document consisting of the Statement of
Financial Condition, the notes to the
Statement of Financial Condition, and
the report of the independent public
accountant covering the Statement of
Financial Condition, which is not
confidential; and (B) A document
containing the balance of the annual
reports for which confidential treatment
may be requested and which will be
deemed confidential for the purposes of
section 24(b) of the Act.’’ 265 The
Commission received no comment on
the proposal to amend these provisions
to conform to the electronic process for
filing on EDGAR and is adopting them
as proposed.266
The Commission also proposed to
replace ‘‘deemed confidential to the
extent permitted by law’’ with ‘‘deemed
confidential for the purposes of section
24(b) of the Act’’ in Rules 17a–5 and
18a–7 for consistency with the language
used in other rules (e.g., paragraph (c)(4)
of Rule 17h–2T) and to clarify the legal
basis of the rule.267 The Commission
also proposed this change in paragraph
(a)(2) of Rule 17a–5 regarding FOCUS
Report filings so that the language in
Rule 17a–5 is internally consistent.268
264 At present, a broker-dealer filing its annual
reports on EDGAR designates the portions of the
reports for which it is requesting confidentiality by
checking a ‘‘Request Confidentiality’’ box when it
uploads the relevant documents. As with the other
aspects of the current voluntary filing program, this
aspect of the EDGAR filing process will not change.
265 See paragraph (e)(3) of Rule 17a–5, as
proposed to be amended; paragraph (d)(2) of Rule
18a–7, as proposed to be amended.
266 See paragraph (e)(3) of Rule 17a–5, as
amended; paragraph (d)(2) of Rule 18a–7, as
amended.
267 See paragraph (e)(3) of Rule 17a–5, as
proposed to be amended; paragraph (d)(2) of Rule
18a–7, as proposed to be amended.
268 See paragraphs (a)(2) and (e)(3)(ii)(B) of Rule
17a–5, as proposed to be amended.

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The Commission proposed analogous
changes to the first sentence of
paragraph (d)(2) of Rule 18a–7.269 Rule
17a–12 does not contain an analogous
provision relating to separately binding
the public portion of the report from the
portion for which confidential treatment
will be requested, but the Commission
proposed to amend pre-existing
paragraph (c)(3) of Rule 17a–12 (which
is being re-designated as paragraph
(c)(4)) 270 to add language to state that an
EDGAR filer may request confidential
treatment.271 The Commission also
proposed to amend paragraph (a)(2) of
Rule 17a–12 to replace ‘‘deemed to be
confidential’’ with ‘‘deemed to be
confidential for the purposes of section
24(b) of the Act’’ for consistency with
the language used in other rules (e.g.,
paragraph (c)(4) of Exchange Act Rule
17h–2T) and to clarify the legal basis of
the rule.272 The Commission received
no comment on these proposals and is
adopting them as proposed.273
B. Rule 17h–2T and Form 17–H
Under section 17(h) of the Exchange
Act and Rule 17h–2T, broker-dealers
that are part of a holding company
structure and that maintain capital of at
least $20 million must file quarterly and
annual risk assessment reports with the
Commission.274 The reports are filed
using Form 17–H.275
The Commission proposed to amend
paragraph (a)(2) of Rule 17h–2T to
require that the quarterly and annual
risk assessment reports be filed with the
Commission electronically through
EDGAR, using the same process used by
broker-dealers currently voluntarily
269 See paragraph (d)(2) of Rule 18a–7, as
proposed to be amended.
270 See paragraph (c)(4) of Rule 17a–12, as
proposed to be amended.
271 See 17 CFR 240.24b–2.
272 See paragraph (a)(2) of Rule 17a–12, as
proposed to be amended.
273 See paragraphs (a)(2) and (e)(3)(ii)(B) of Rule
17a–5, as amended; paragraph (d)(2) of Rule 18a–
7, as amended; paragraphs (a)(2) and (c)(4) of Rule
17a–12, as amended.
274 On June 29, 2020, the Commission exempted
from the requirements of Rules 17h–1T and 17h–
2T broker-dealers that do not hold funds or
securities for, or owe money or securities to,
customers and do not carry customer accounts, or
that are exempt from Rule 15c3–3 pursuant to
paragraph (k)(2) of that rule, and that maintain total
assets of less than $1 billion and capital, including
debt subordinated in accordance with Rule 15c3–
1d, of less than $50 million. See Order Under
Section 17(h)(4) of the Securities Exchange Act of
1934 Granting Exemption from Rule 17h–1T and
Rule 17h–2T for Certain Broker-Dealers Maintaining
Capital, Including Subordinated Debt of Greater
than $20 Million but Less than $50 Million,
Exchange Act Release No. 89184 (June 29, 2020), 85
FR 40356 (July 6, 2020).
275 See 17 CFR 249.328T. Form 17–H is available
at https://www.sec.gov/about/forms/form17-h.pdf.

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using EDGAR to file Form 17–H.276 The
proposed amendments also provide that
the financial statements required by
Item 4 of Form 17–H would be required
to be submitted in Inline XBRL. With
respect to the Inline XBRL requirement,
the process would mirror the process
described above for broker-dealers filing
annual reports in Inline XBRL.277 Under

the amendments being adopted, brokerdealers would be required to apply
machine-readable Inline XBRL tags to
the financial statements included in the
quarterly and annual risk assessment
reports. The existing custom XML
requirement for the facing page and Part
II of Form 17–H would remain in place,
as would the PDF requirement for Item

1, 2, and 3 of Form 17–H (which require
copies of organizational charts, risk
management procedures, and
descriptions of pending legal
proceedings that the broker-dealer
maintains pursuant to paragraph (a)(1)
of Rule 17h–1T).278

Structured Data Requirements for Form 17-H
Item4
Execution page, Part II
Items 1, 2, and 3

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The Commission received one
comment specific to Form 17–H. The
commenter, an XBRL standards
association, advocated that the
Commission require more of Form 17–
H be filed in XBRL format.279 The
Commission proposed to utilize XBRL
for the financial statements in Item 4 of
Form 17–H, for which XBRL is wellsuited.280 The Commission proposed to
retain the existing custom XML
requirement for the facing page and for
Part II, even though it acknowledged
certain drawbacks to this approach,

Proposing Release at 23951.
supra section IV.A.
278 See 17 CFR 240.17h–1T(a)(1).

given the compliance burden associated
with changing the facing page and Part
II from a custom XML schema to
XBRL.281 Ultimately, the Commission
disagrees with the commenter that
expanding the XBRL requirements to
cover more of Form 17–H would be
appropriate because, while the
Commission acknowledges the
commenter’s contention that greater use
of XBRL would promote ease and
efficiency of processing the data
contained within Form 17–H, such
advantages would not justify the

276 See

279 See

277 See

280 See

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XBRL Letter at 7.
Proposing Release at 23951.
281 See id.

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compliance burdens and
implementation costs that would be
incurred to expand the use of XBRL in
Form 17–H.282 For these reasons, the
Commission is adopting the
amendments to Rule 17h–2T and the
structured data amendments to Form
17–H as proposed.
V. Other Forms, Reports, or Notices
The Commission is requiring the
following forms, reports and notices
(and instructions thereto) to be filed or
submitted on EDGAR:

282 See

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Form X-17 A-19: Information Required of
National Securities Exchanges and
Registered National Securities
Associations pursuant to Sections 17 and
19 of the Securities Exchange Act of 1934
and Rule 17a-19 thereunder - Report of
Change in Membership Status
Notices (and withdrawals of notices) to
the Commission pursuant to Rule 3a713(d)(l )(vi)

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Certain registered
SBSDs or registered
brokers that meet
certain capital and
other requirements

Notices (and any amendments to the
notices) to the Commission of SecurityBased Swap Valuation Disputes pursuant
to Rule 15fi-3(c)

SBS Entity

Compliance Reports pursuant to Rule
15fk-1(c)(2)(ii)(A)

SBS Entity

A. Notices Pursuant to Rule 17a–19 and
Form X–17A–19
Rule 17a–19 requires every national
securities exchange and registered
national securities association to file a
Form X–17A–19 with the Commission
at its principal office in Washington, DC
and with the Securities Investor
Protection Corporation (‘‘SIPC’’) within
five business days of the initiation,
suspension, or termination of any
member and, when terminating the
membership interest of any member, to
notify that member of its obligation to
file financial reports as required by
paragraph (b) of Rule 17a–5.283
283 17

Filer/Submitter
Type
Exchange or
Association

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Prior to these amendments, the
instructions to Form X–17A–19
provided that the original of the form
must be mailed to the Commission at its
principal office and a copy of the form
must be mailed to SIPC. The
Commission proposed to amend this
requirement to provide that Form X–
17A–19 must be filed with the
Commission electronically on EDGAR
in accordance with the EDGAR Filer
Manual, as defined in Rule 11 of
Regulation S–T, and in accordance with
the requirements of Regulation S–T.284
Accordingly, Form X–17A–19 would be

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The form and instructions to
the form (17 CFR 249.635),
and corresponding
Exchange Act Rule 17a-19
(17 CFR 240.17a-19).
Rule I0I(a) of Regulation
S-T (17 CFR232.101(a)).
17 CFR 240.3a713(d)(l)(vi) (Rule 3a713(d)(l)(vi)).
17 CFR 232.I0I(a),
232.201(a), and 232.202(a)
(Rule I0I(a), 201(a) and
202(a) of Regulation S-T).
17 CFR 240.15fi-3(c) (Rule
15fi-3(c)).
17 CFR 232.I0I(a) and (d)
(Rule I0I(a) and (d) of
Regulation S-T).
17 CFR 240.15fk1(c)(2)(ii)(A).
(Rule 15fk-l(c)(2)(ii)(A)).
17 CFR 232.I0I(a) and (c)
(Rule IOI(a) and (c) of
Regulation S-T).

284 See 17 CFR 240.17a–19, as proposed to be
amended.

CFR 240.17a–5(b).

Amendments

filed in a custom XML-based data
language.285 As is the case with most of
the Commission’s other XML-based
forms, such as the aforementioned
facing page to Form X–17A–5 Part III,286
national securities exchanges and
registered national securities
associations would comply with the
custom XML requirement by either
inputting the information into a fillable
web form that EDGAR would then
285 Requirements to submit forms on EDGAR in
custom XML structured data languages are set forth
in the EDGAR Filer Manual, Volume II, Chapter 9,
and the specific XML requirements for Form X–
17A–19 would be included in an updated version
of the EDGAR Filer Manual, Volume II, Chapter 8.
286 See supra section IV.A.

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convert into the custom XML-based data
language, or submitting the information
directly to EDGAR in the custom XMLbased data language.287 The
Commission did not receive any
comments specific to Form X–17A–19,
other than the general structured data
concerns discussed in sections VII.A.
and X.C. below, and so to achieve the
benefits of electronic submission and
structuring described in section X.C.1, is
adopting as proposed the requirement to
file Form X–17A–19 electronically on
EDGAR using structured data format.288
The Commission also proposed
making conforming amendments to the
‘‘General Instructions’’ to Form X–17A–
19. Instruction 2 was proposed to be
amended to replace the instruction to
mail the original of the form to the
Division with an instruction to file the
original ‘‘electronically on EDGAR in
accordance with the EDGAR Filer
Manual, as defined in Rule 11 of
Regulation S–T (§ 232.11) and in
accordance with the requirements of
Regulation S–T.’’ Instruction 2 was also
proposed to be amended to instruct
filers to send copy number 1 of Form X–
17A–19 to SIPC at SIPC’s updated
address. Instruction 3 was proposed to
be amended to replace the words ‘‘shall
be executed with a manual signature’’
with the words ‘‘shall be signed.’’
Instruction 4 was proposed to be deleted
(and subsequent instructions would be
renumbered accordingly), because the
instruction about what to do if there is
insufficient space in the form is
unnecessary if the filing is submitted on
EDGAR. Renumbered instruction 6
(formerly instruction 7) was proposed to
be amended to provide that copies of
the form may be obtained ‘‘on the
Commission’s website’’ instead of ‘‘from
the main office of the Securities and
Exchange Commission in Washington,
DC’’ The Commission did not receive
comment on these proposals and is
adopting them as proposed.
In addition, the Commission proposed
a technical amendment to lines 1, 4, and
5 of Form X–17A–19. These lines ask
the filer to check off one of the listed
exchanges or associations but the list is
not up-to-date. Therefore, the
Commission proposed to amend lines 1,
4, and 5 of Form X–17A–19 to include
an ‘‘other’’ field for exchanges or
associations that are not listed on the
form, so that the listing of exchanges
and associations would be complete.
The Commission did not receive
comment on this proposal and for the
reason discussed above, is adopting it as
proposed.
287 See
288 See

Proposing Release at 23953.
17 CFR 240.17a–19, as amended.

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B. Notice (and Any Withdrawal of a
Notice) Filed Pursuant to Rule 3a71–
3(d)(1)(vi)
1. Proposed Rule
The Commission proposed to amend
Rule 3a71–3(d)(1)(vi) 289 to change the
method of filing ANE Exception
Notices.290 Prior to these amendments,
Rule 3a71–3(d)(1)(vi) required a
Registered Entity to file an ANE
Exception Notice by submitting it to the
electronic mailbox described on the
Commission’s website at www.sec.gov at
the ‘‘ANE Exception Notices’’
section,291 and the Commission was
required to publicly post the notice on
the same section of its website.292 A
Relying Entity is able to review publicly
posted ANE Exception Notices to
determine whether its affiliated
Registered Entity’s ANE Exception
Notice has been filed in accordance
with Rule 3a71–3(d)(1)(vi).
The proposed amendments to Rule
3a71–3(d)(1)(vi) would require an ANE
Exception Notice to be filed
electronically on, and publicly
disseminated through, the EDGAR
system. The Commission did not
propose changes to the content of an
ANE Exception Notice, which consists
of the name of the Registered Entity
whose associated persons may conduct
activity covered by the ANE Exception,
the fact that those associated persons
may conduct such activity, and the date.
ANE Exception Notices filed
electronically on EDGAR also would be
289 17

CFR 240.3a71–3(d)(1)(vi).
Proposing Release, 88 FR at 23954–56.
Rule 3a71–3(d) provides a conditional exception
(‘‘ANE Exception’’) to Rule 3a71–3(b)(1)(iii)(C), 17
CFR 240.3a71–3(b)(1)(iii)(C), which itself provides
that, for purposes of determining whether the
dealing activity of a non-U.S. person that is not a
conduit affiliate exceeds the applicable de minimis
threshold (set forth in 17 CFR 240.3a71–2(a)(1))
below which a person is generally not within the
SBSD definition, non-U.S. persons generally must
count their security-based swap transactions
connected with their dealing activity that are
arranged, negotiated, or executed by personnel
located in a U.S. branch or office, or by personnel
of an agent of such non-U.S. person located in a
U.S. branch or office (‘‘ANE Activity’’). See 17 CFR
240.3a71–3(d). One of the conditions to the ANE
Exception is that all ANE Activity for which the
non-U.S. person is relying on the exception (the
‘‘Relying Entity’’) be conducted by the U.S.
personnel in their capacity as persons associated
with a majority-owned affiliate (as defined in 17
CFR 240.3a71–3(a)(10)) of the Relying Entity that is
either a registered SBSD or a registered broker that
meets certain capital and other requirements (such
a registered majority-owned affiliate, the
‘‘Registered Entity’’). See 17 CFR 240.3a71–3(d)(1).
In addition, before an associated person of the
Registered Entity commences this ANE Activity, the
Registered Entity must file with the Commission an
ANE Exception Notice. See 17 CFR 240.3a71–
3(d)(1)(vi).
291 See https://www.sec.gov/tm/ane-exceptionnotices.
292 See 17 CFR 240.3a71–3(d)(1)(vi).
290 See

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permitted, but not required, to include
contact details of a person or
department at the Registered Entity that
counterparties may contact regarding
the ANE Exception. Each ANE
Exception Notice thus contains a
minimal amount of information.293
The Commission also proposed to
amend Rule 3a71–3(d)(1)(vi) to: (1)
provide that withdrawals of ANE
Exception Notices shall be made
electronically via EDGAR, and (2)
require a Registered Entity to promptly
withdraw its ANE Exception Notice if it
becomes unregistered or otherwise
ineligible to serve as the Registered
Entity for purposes of the ANE
Exception.294 The latter requirement is
intended to help ensure that ANE
Exception Notices published on EDGAR
remain accurate for market participants
and other users of the information.295
Prior to these amendments, a
Registered Entity could, but was not
required to, withdraw an ANE
Exception Notice by contacting the
Commission to request that the notice
be manually removed from the ANE
Exception Notices web page.296 Upon
removal of the notice from the web
page, the ANE Exception Notice would
be withdrawn and a Relying Entity
would no longer be able to rely on the
ANE Exception unless another relevant
ANE Exception Notice is filed.
Under the proposed rule, an ANE
Exception Notice withdrawal request
via EDGAR would result in EDGAR
293 See Proposing Release, 88 FR at 23954. As of
Dec. 31, 2023, three Registered Entities had filed an
ANE Exception Notice.
294 See Proposing Release, 88 FR at 23955.
Regardless of whether a required withdrawal is
promptly filed by the Registered Entity (or filed at
all), each condition of Rule 3a71–3(d)(1) must be
satisfied in order for the Relying Entity to rely on
the ANE Exception, and the Relying Entity may not
rely on the exception if the Registered Entity is no
longer registered or otherwise no longer satisfies the
conditions described in 17 CFR 240.3a71–3(d)(1).
295 See Proposing Release, 88 FR at 23955. The
ANE Exception also is subject to a cap on the
amount of certain inter-dealer security-based swaps
positions. See 17 CFR 240.3a71–3(d)(1)(vii).
Positions subject to the cap include security-based
swaps between a Relying Entity and a non-U.S.
person that is, or is an affiliate of, any Registered
Entity that has filed an ANE Exception Notice with
the Commission. See 17 CFR 240.3a71–3(a)(13). All
such positions connected with dealing activity of
the Relying Entity and certain of its affiliates are
counted toward the cap. See 17 CFR 240.3a71–
3(d)(6). Currently, the Relying Entity and its
affiliates can review the ANE Exception Notices
published on the Commission’s website to
determine whether any of the filed ANE Exception
Notices are relevant to the Relying Entity’s or any
of its affiliates’ progress toward the cap on interdealer security-based swaps. See Exchange Act
Release No. 87780 (Dec. 18, 2019), 85 FR 6270,
6280–84 (Feb. 4, 2020) (‘‘Cross-Border Adopting
Release’’).
296 See Cross-Border Adopting Release, 85 FR at
6283 n.138.

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identifying the relevant ANE Exception
Notice as no longer active (as opposed
to removal of the notice from
EDGAR).297 The withdrawal would also
be publicly disseminated through
EDGAR.
In the Proposing Release,298 the
Commission explained that as a result of
the amendments to Rule 3a71–
3(d)(1)(vi), EDGAR users would have
the ability to search for ANE Exception
Notices that have not been withdrawn,
i.e., the notices that remain eligible to
satisfy the ANE Exception’s notice
condition. These filed and not
withdrawn ANE Exception Notices
would also help identify the Registered
Entities who, together with their
affiliates, could cause a transaction to
fall under the ANE Exception’s cap on
certain inter-dealer security-based
swaps.299 The Commission further
stated that the inclusion of ANE
Exception Notices submitted on EDGAR
and withdrawn in EDGAR’s publicly
available data would aid Relying
Entities and their affiliates in
determining their progress toward the
ANE Exception’s cap at a particular
point in the past.300 This functionality
is not available under the email-based
filing system, as the Commission retains
only currently active notices on the
‘‘ANE Exception Notices’’ web page.

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2. Amended Rule
After considering the public
comments, the Commission has
determined to adopt the amendments to
Rule 3a71–3(d)(1)(vi) as proposed.
Requiring ANE Exception Notices to be
filed electronically and publicly
disseminated via EDGAR will, among
other things, facilitate more efficient
and timely transmission and
dissemination of information and will
benefit the Commission, Registered
Entities, Relying Entities, and other
market participants. Electronic filing of
ANE Exception Notices on EDGAR will
enhance the ability of Relying Entities
and their affiliates to access and use the
filed ANE Exception Notices to
determine their progress toward the
ANE Exception’s cap on inter-dealer
297 See Proposing Release, 88 FR at 23955.
Consistent with current Rule 3a71–3(d)(1)(vi), the
EDGAR system also would not allow amendments
to an ANE Exception Notice. To report a name
change or change of contact details on an ANE
Exception Notice via EDGAR, a Registered Entity
must file a new notice with the updated
information.
298 See Proposing Release, 88 FR at 23955–56.
299 See supra note 295.
300 Subject to Rule 3a71–3(d)(6)(ii), security-based
swap positions that counted toward the cap before
withdrawal of an ANE Exception Notice continue
to count toward the cap after such withdrawal. See
Proposing Release, 88 FR at 23955–56.

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security-based swaps. Other members of
the public also will be able to access
and review ANE Exception Notices
more efficiently. Instead of reviewing
each notice individually, users would
be able to access the public-facing
portion of the Commission’s EDGAR
system to search for a specific filer, for
ANE Exception Notices and for
withdrawals of ANE Exception Notices.
Further, electronic submission and
display of the ANE Exception Notices
on EDGAR will provide market
participants and the public with access
to such notices and their withdrawals,
including the names of filing Registered
Entities and the date of each filing
promptly after submission on EDGAR,
without the need for manual
Commission staff processing and the
associated delays and demands on
Commission resources.301
One commenter stated that EDGAR’s
search functionality is extremely
limited, and, as a result, firms would
not be able to access and use ANE
Exception Notices on EDGAR in an
efficient manner.302 Accordingly, the
commenter asserts, even if the
Commission requires firms to submit
ANE Exception Notices via EDGAR, the
Commission must continue to publish
such notices on the Commission’s
website.303 The Commission disagrees.
Although in the past EDGAR’s search
function may have been more limited,
EDGAR’s current functionalities will
facilitate the objectives of the
amendments to Rule 3a71–3(d)(1)(vi). In
particular, EDGAR’s ‘‘Full-Text Search’’
functionality, launched in 2021,
includes options to access the full text
of electronic filings since 2001 to the
present by date, company name, person,
Central Index Key (‘‘CIK’’), and filing
type.304
301 Following the compliance date of the
amended rule, ANE Exception Notices will no
longer be posted on the Commission’s website,
including notices filed prior to the compliance date.
The Commission will transfer to EDGAR any ANE
Exception Notice filed (and not withdrawn) prior to
the compliance date. Such ANE Notices will retain
their pre-compliance date filing date. Securitybased swap positions that counted toward the cap
in 17 CFR 240.3a71–3(d)(1)(vii) prior to the
compliance date will continue to count toward the
cap after the transfer of the ANE Exception Notices.
Upon the compliance date, Registered Entities will
become subject to the new withdrawal requirements
under the amended rule with respect to their ANE
Exception Notices already on file with the
Commission.
302 SIFMA 5/22/2023 Letter at 12.
303 Id.
304 See https://www.sec.gov/edgar/search/#.
Resources for using this functionality, including a
series of FAQs, are available on the Commission’s
website. See https://www.sec.gov/edgar/search-andaccess and https://www.sec.gov/edgar/search/eftsfaq.html. As an example, once updates to EDGAR
are made to accommodate submission (and

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7289

As discussed in the Proposing
Release, because of the nature and
minimal amount of information
included in ANE Exception Notices,
users of ANE Exception Notices would
be unlikely to benefit from structured
data tools to analyze the data therein, as
these tools typically would assist in
analyzing large data sets more
efficiently, and using an unstructured
data format for ANE Exception Notices
would make better use of the resources
of the Commission and market
participants. Accordingly, the
amendments do not require the
submission and withdrawal of ANE
Exception Notices to be made in a
structured data format.
A Registered Entity that has not
previously made an electronic filing on
EDGAR would need to obtain EDGAR
access credentials pursuant to the
EDGAR Filer Manual in order to file an
ANE Exception Notice electronically via
EDGAR.305 Requiring submission of
ANE Exception Notices electronically
through EDGAR is appropriate because
most Registered Entities already have
access to and familiarity with EDGAR
through registering or filing information
with the Commission.306 For those
Registered Entities, the Commission
does not expect there to be additional
burdens associated with mandating
EDGAR filing of ANE Exception
Notices.
As discussed in the Proposing
Release, it would not be appropriate or
necessary for a Registered Entity to have
available a temporary or continuing
hardship exemption 307 from the
requirement to file ANE Exceptions
Notices on EDGAR. For one, reliance on
the ANE Exception, which requires the
filing of an ANE Exception Notice, is
voluntary, and the ANE Exception is
only available for Relying Entities
whose affiliated Registered Entity is
operationally capable of complying with
withdrawal) of ANE Exception Notices via EDGAR,
a firm should be able to go to https://www.sec.gov/
edgar/search/#, and, using the ‘‘Browse filing
types’’ option, select the designated category to
search for ANE Exception Notices.
305 A small number of Registered Entities may be
first-time EDGAR filers; for example, a party that
succeeds to the registration of a Registered Entity
in a merger, conversion, or other corporate
transaction may not yet have EDGAR access
credentials.
306 A Registered Entity that is an SBSD must file
its application for registration on EDGAR. See 17
CFR 240.15Fb2–1(c). Additionally, pursuant to
amendments being adopted in this release, a
Registered Entity that is a broker will be required
to file on EDGAR certain annual reports, and many
brokers already do so voluntarily under existing
Commission rules. See infra sections VIII and XI.B.
307 See, respectively, 17 CFR 232.201(a),
addressing temporary hardship exemptions, and 17
CFR 232.202(a), addressing continuing hardship
exemptions.

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certain disclosure, communication, and
recordkeeping conditions.308 Further,
the ANE Exception is premised in part
on the public availability of the ANE
Exception Notice to Relying Entities.
For these reasons, as well as the
simplicity of the expected filings and
the sophistication of the filers, the
Commission is amending Regulation S–
T to exclude ANE Exception Notices
and withdrawals from temporary
hardship exemptions under Rule
232.201(a) and continuing hardship
exemptions under Rule 232.202(a).
C. Notice (and Any Amendment,
Including Notice of Dispute
Termination) Provided Pursuant to Rule
15fi–3(c)

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1. Proposed Rule
The Commission proposed to amend
Rule 15fi–3(c) to require that the
submission of valuation dispute notices
and amendments to such notices to the
Commission (‘‘VDNs’’) be made in
EDGAR in a custom XML-based
structured data language.309 Under Rule
15fi–3(c), each SBS Entity must
promptly notify the Commission and
any applicable prudential regulator 310
of any security-based swap valuation
dispute in excess of $20,000,000 (or its
equivalent in any other currency), at
either the transaction or portfolio level,
if not resolved within: (1) three business
days, if the dispute is with a
counterparty that is an SBS Entity; or (2)
five business days, if the dispute is with
a counterparty that is not an SBS
Entity.311 Rule 15fi–3(c) also requires
SBS Entities to notify the Commission
and any applicable prudential regulator
if the amount of any security-based
swap valuation dispute that was the
subject of a previous notice increases or
decreases by more than $20,000,000 (or
its equivalent in any other currency), at
either the transaction or portfolio
level.312
308 An inability to file an ANE Exception Notice
using the Commission’s EDGAR system may
indicate that a Registered Entity’s operational
conditions would present undue risk if the ANE
Exception were available to permit Relying Entities
to defer registration as SBSDs.
309 See Proposing Release, 88 FR at 23957.
310 The term ‘‘prudential regulator’’ is defined in
17 CFR 240.15fi–1(m) to have the same meaning as
in section 1a of the Commodity Exchange Act (7
U.S.C. 1a) and includes the Federal Reserve, the
Office of the Comptroller of the Currency, the
Federal Deposit Insurance Corporation, the Farm
Credit Association, and the Federal Housing
Finance Agency, as applicable to the SBS Entity.
311 See 17 CFR 240.15fi–3(c).
312 Id. Such amendments are required to be
provided to the Commission and any applicable
prudential regulator no later than the last business
day of the calendar month in which the applicable
security-based swap valuation dispute increases or
decreases by the applicable dispute amount. Id.

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Prior to these amendments, Rule 15fi–
3(c) required SBS Entities to submit
VDNs ‘‘in a form and manner acceptable
to the Commission.’’ 313 SBS Entities
had two options for submitting VDNs:
(1) an electronic submission in PDF
format via EDGAR; or (2) submission in
PDF format to a dedicated Commission
email address.
Under the proposed amendments,
Rule 15fi–3(c) would continue to
provide flexibility to SBS Entities
regarding the information to be included
in a VDN, but the Commission would
encourage—not require—SBS Entities to
disclose specific categories of
information in VDNs, as discussed more
fully below. In addition, the custom
XML-based data language for VDN
submissions and a fillable EDGAR-based
web form would include XML elements
reflecting those encouraged
disclosures.314 SBS Entities would be
permitted to leave one or more fields in
the EDGAR-based fillable web form
unpopulated and provide their own
description of the dispute in a dedicated
general field in the fillable form.315 SBS
Entities may opt not to use the fillable
web form to satisfy the structured data
submission requirement and, instead,
may generate a VDN using the custom
XML-based data language and upload
the VDN to EDGAR.316
2. Amended Rule
Based on the reasons discussed in the
Proposing Release, and after considering
the public comments, the Commission
is adopting the amendments to Rule
15fi–3(c) as proposed. Accordingly,
amended Rule 15fi–3(c) requires SBS
Entities to submit VDNs electronically
in EDGAR using a custom XML-based
data language specific to VDNs.317 This
313 In proposing Rule 15fi–3(c), the Commission
explained that this phrase was intended to provide
SBS Entities with flexibility to determine the most
efficient and cost-effective means of making such
submissions, so long as it is deemed to be
acceptable by the Commission. See Risk Mitigation
Techniques for Uncleared Security-Based Swaps,
Exchange Act Release No. 84861 (Dec. 19, 2018), 84
FR 4614, 4621, n.47 (Feb. 15, 2019).
314 See Proposing Release, 88 FR at 23958.
315 See id.
316 See id.
317 SBS Entities relying on Commission orders
granting substituted compliance pursuant to 17 CFR
240.3a71–6 may be required to provide the
Commission reports regarding disputes between
counterparties, among other conditions in the
orders. See, e.g., Exchange Act Release No. 93411
(Oct. 22, 2021), 86 FR 59797, 59815 (Oct. 28, 2021)
(File No. S7–08–21). Beginning on the compliance
date for the amendments to Rule 15fi–3(c), the only
method available for SBS Entities to provide the
dispute reports required by the Commission’s
existing substituted compliance orders will be
electronically in EDGAR using the custom XMLbased data language specific to VDNs. The
flexibility provided by a fillable web form and by
the custom XML-based data language’s elements—

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requirement applies to initial VDNs and
amendments to VDNs, including notices
of termination of a dispute.318 Under the
amended rule, SBS Entities will no
longer be able to submit VDNs to the
Commission via email or in PDF format
on EDGAR.319
As discussed in the Proposing
Release, SBS Entities should already
have obtained access to EDGAR in
connection with their registration with
the Commission in such capacity and
should therefore be familiar with how to
use the EDGAR system.320 As such, the
Commission does not expect there to be
any additional burden associated with
expressly mandating submission of
VDNs on EDGAR.
One commenter stated that requiring
submission of VDNs via a fillable web
form on EDGAR would introduce
inefficiencies and opportunities for
human error; specifically, that firms
would need an individual to copy and
paste the text from the relevant data
output into the Commission’s web form,
which would likely necessitate a second
individual to watch the first individual
input the data.321 According to the
commenter, this type of ‘‘over the
shoulder’’ observation is needed to
minimize (but will not entirely
eliminate) the risk of error and would
create inefficiency for no corresponding
benefit. The commenter requests that
the Commission allow firms ‘‘to
continue submitting their [VDNs] (and
subsequent amendments and
terminations) in PDF, and, at the very
least, allow firms to submit a structured
data file as the [VDN] rather than filling
in a web form.’’ 322
including an XML element to capture any
information that does not fall within any of the
other elements—will facilitate submission of
dispute reports required by the Commission’s
orders with minimal modification.
318 Under amended Rule 15fi–3(c)(2), an SBS
Entity will be required to submit VDN amendments
electronically in EDGAR using the custom XMLbased data language, as required by the rule,
regardless of the method the SBS Entity used to
submit the original VDN or previous amendments.
For a VDN submitted after the compliance date that
amends a VDN submitted via email prior to the
compliance date, the SBS Entity may indicate in its
submission that the VDN amends a VDN previously
submitted via email.
319 Under amended Rule 15fi–3(c), SBS Entities
with a U.S. prudential regulator must notify the
prudential regulator ‘‘in a form and manner
acceptable to the prudential regulator.’’ Prior to the
amendments, Rule 15fi–3(c) did not specify how
SBS Entities must notify the prudential regulator.
The additional specificity in the amended rule will
provide guidance to SBS Entities along with the
flexibility to notify any applicable U.S. prudential
regulator in a form and manner acceptable to that
regulator.
320 See Proposing Release, 88 FR at 23958.
321 See SIFMA 5/22/2023 Letter at 11.
322 Id.

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The Commission disagrees with the
commenter’s statement that the
amendments to Rule 15fi–3(c) provide
no corresponding benefit. Using
EDGAR—as opposed to a dedicated
email inbox—provides a more efficient
and secure way to submit and process
VDNs. As discussed in the Proposing
Release, the submission of VDNs in a
structured data language will enable the
Commission to analyze the information
therein more efficiently and effectively,
as compared to the current methods of
submission, for purposes such as
identifying trends in disclosed valuation
disputes or performing technical
validations (i.e., programmatic checks)
upon intake to ensure VDNs are
appropriately standardized and
formatted.323 These benefits justify the
amendments notwithstanding the
potential need for an over-the-shoulder
review, as described by the commenter.
The amended rule provides that each
SBS Entity is required to submit VDNs
‘‘electronically through the
Commission’s EDGAR system, in
accordance with the EDGAR Filer
Manual . . . .’’ While, beginning on the
compliance date for the amendments to
Rule 15fi–3(c), an SBS Entity will no
longer be able to submit VDNs in PDF
format for the reasons discussed above,
in response to the comment, the
Commission is confirming that, as
provided for under the current EDGAR
Filer Manual,324 an SBS Entity will have
the option to submit to the Commission
via EDGAR a VDN that the SBS Entity
has constructed in the custom XMLbased data language instead of using the
fillable web form.
One commenter stated that the
Proposing Release was incomplete
because it did not ‘‘identify the specific
elements that will need to be included
on the XML valuation dispute
reports.’’ 325 The same commenter stated
that ‘‘if the Commission does adopt a
fillable web form requirement or
another requirement to submit reports
using structured data language, it must
provide firms with an opportunity to
review and comment on the structure
and content of the requirement.’’ The
commenter stated that ‘‘the [Proposing
Release] is not entirely clear whether
firms will be required to simply type in
data or to submit a file when submitting
323 See

Proposing Release, 88 FR at 23958.
EDGAR Filer Manual, Volume II, Chapter
9, Filer-Constructed XML Submissions (providing
instructions regarding constructing a submission
using the Filer-Constructed XML Filing
Specification documents (available at https://
www.sec.gov/info/edgar/tech-specs) and providing
step by step instructions for transmitting such
submissions via EDGAR to the Commission).
325 See SIFMA 5/22/2023 Letter at 2.
324 See

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[VDNs]’’ and ‘‘there may be data
elements that need to be clarified or that
should not be included at all.’’ 326
As discussed above, the proposed rule
would not amend the content
requirements for VDNs. Rather, the
Proposing Release encouraged SBS
Entities to include certain categories of
information in their VDNs, and those
categories were detailed in the
Proposing Release. While the Proposing
Release did not include an
accompanying XML schema for that
XML-based data language, as discussed
above, under the amended rule, SBS
Entities will have flexibility in
submitting VDNs in structured data,
with a choice of using the EDGAR-based
fillable form (with additional flexibility
as to what to disclose in the form) or
uploading a VDN in the XML-based data
language. Additionally, the Proposing
Release did specify that the data
language would include discrete XML
elements for each of the encouraged
disclosures,327 as well as a separate
XML element to capture any
information provided by SBS Entities
that does not fall within the encouraged
disclosures.
As discussed in the Proposing
Release, one of the primary objectives of
Rule 15fi–3(c) is to inform the
Commission and its staff that a
valuation dispute has arisen, allowing
the Commission and staff to consider
whether additional follow-up is
warranted. While Rule 15fi–3(c) is
intended to provide SBS Entities with
flexibility to submit the required
information to the Commission in a
manner that is most efficient for each
SBS Entity,328 the Commission is
encouraging—but is not requiring—SBS
Entities to include in a VDN basic
information about the security-based
swap valuation dispute, including: (1)
identifying information about both
counterparties (including each party’s
LEI); (2) the date of the dispute (or the
termination date, if applicable); (3) the
type of dispute; (4) disclosure about
which counterparty is the receiver and
326 See

SIFMA 5/22/2023 Letter at 11.
Proposing Release, 88 FR at 23958. See
also infra section VII.A (discussing taxonomies and
the public feedback process).
328 See also Risk Mitigation Techniques for
Uncleared Security-Based Swaps, Exchange Act
Release No. 87782 (Dec. 18, 2019), 85 FR 6359, 6368
(Feb. 4, 2020) (‘‘Risk Mitigation Adopting Release’’);
Security-Based Swap Valuation Dispute Notices,
available at https://www.sec.gov/tm/SecurityBased-Swap-Valuation-Dispute-Notices (where the
staff states that, ‘‘In terms of the contents of the
notice, the Commission explained when it adopted
Rule 15fi–3(c) that the notice is not required to
include specific fields, ‘in order to provide SBS
Entities with the flexibility to submit the required
information to the Commission in a manner that is
most efficient for each SBS Entity.’ ’’).
327 See

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7291

which is the payer; and (5) the disputed
amount, in U.S. Dollars.329 The
Commission is also encouraging SBS
Entities to provide any applicable
identifier about the relevant securitybased swap (such as the product ID), the
notional amount of the security-based
swap, and disclosure about which
counterparty is calling the dispute (i.e.,
the direction of the dispute). In
amendments to previously submitted
VDNs, including notices of termination
of a dispute, SBS Entities are
encouraged to provide information to
assist the Commission in understanding
the purpose of the amendment or the
circumstances of termination of a
dispute.330 The inclusion of such
information (‘‘basic information’’) in
VDNs will assist Commission staff in
focusing the scope of any follow-up
inquiries and thus reduce both
Commission and SBS Entity resources
used in connection with valuation
dispute reports.
Consistent with this approach, the
Commission’s custom XML-based data
language for VDNs will include discrete
XML elements for each category of the
basic information listed above, and the
associated fillable web form on EDGAR
will contain discrete fields mirroring
those XML elements. However, to
maintain the flexibility inherent to the
Commission’s approach to VDNs, the
custom XML data language (and
associated fillable web form) will also
contain an XML element (and fillable
field) to capture any information
provided by SBS Entities that does not
fall within the categories of basic
information listed above. SBS Entities
may use this XML element (and
associated fillable field) to submit their
VDN information, as appropriate, and
may refrain from using any number (or
all) of the other XML data elements and
associated fillable fields if such
information is not needed to report the
329 As discussed in the Proposing Release, this
information is consistent with the notices that swap
dealers and major swap participants are required to
provide to the NFA, which receives notices from
Swap Entities pursuant to CFTC Regulation
23.502(c) regarding swap valuation disputes. See
NFA Interpretive Notice 9072 to Compliance Rule
2–49: Swap Valuation Dispute Filing Requirements
(May 18, 2017), available at https://
www.nfa.futures.org/rulebook/
rules.aspx?Section=9&RuleID=9072, and Effective
date of Interpretive Notice to NFA Compliance Rule
2–49: Swap Valuation Dispute Filing Requirements,
Notice I–17–13 (July 20, 2017), available at https://
www.nfa.futures.org/news/
newsNotice.asp?ArticleID=4827. See Proposing
Release, 88 FR at 23957.
330 One commenter stated that ‘‘it would be quite
difficult and, in some cases, sensitive for firms to
provide this information.’’ The commenter therefore
‘‘[agreed] with the Commission that it should not
require SBS entities to provide such information in
the [VDNs].’’ See SIFMA 5/22/2023 Letter at 12.

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dispute. In addition, as the Commission
proposed, SBS Entities may opt not to
use the fillable form altogether and
instead generate a VDN using the
custom XML-based language and upload
it to EDGAR.
One commenter recommended that
the Commission require SBS Entities to
submit LEIs with VDNs, stating that
‘‘[s]tructured data is more useful when
it contains a consistent identifier, like
the LEI,’’ and that ‘‘[r]eporting of nonstandardized data . . . will lead to
inconsistent submissions and in terms
of comparability, ultimately more work
on behalf of the Commission.’’ 331 The
Commission does not disagree that LEIs
are beneficial in that they provide
consistent and comparable
identification of entities, and indeed, as
discussed above in this section, the
Commission encourages SBS Entities to
include LEIs when submitting VDNs.
However, the scope of the rule
amendments is focused on the manner
of transmitting VDNs (e.g., from email or
unstructured submission to structured
EDGAR submission), and not on adding
new specific content requirements for
VDNs. Therefore, the Commission is
encouraging, but not mandating, the
inclusion of LEIs in VDNs.
One commenter stated that the
Commission must continue to allow
SBS Entities to submit terminations or
amendments 332 to VDNs via email due
to limitations in EDGAR’s
functionalities. Specifically, this
commenter states that firms do not have
a mechanism to associate terminations
or amendments with an original VDN on
EDGAR if the dispute lasts longer than
30 days due to a lack of an archival
function for VDNs. According to the
commenter, for this reason, firms
currently submit amendments and
terminations via email using the
accession number associated with the
original report, and upending this
process would ‘‘make it virtually
impossible for firms to associate reports
with subsequent amendments or
terminations.’’ 333
While the Commission acknowledges
that EDGAR does not currently have an
archival function with respect to VDNs,
SBS Entities currently do, in fact, have
a means to associate amendments
(including terminations) with an
original VDN on EDGAR, and will
331 See

GLEIF Letter.
the commenter references the
submission of ‘‘terminations’’ and amendments,
Rule 15fi–3 does not impose requirements specific
to terminations of a valuation dispute. Rather, the
termination of a dispute may require an SBS Entity
to submit an amended VDN under Rule 15fi–3(c) if
the criteria of the rule are met.
333 See SIFMA 5/22/2023 Letter at 12.
332 While

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continue to have the ability to do so
upon implementation of the amended
rule. Specifically, upon submitting a
VDN on EDGAR, the submitter receives
an email with data that includes the file
number associated with the VDN. This
emailed information regarding the
submission is also available to the
submitter on EDGAR for 30 days. A
VDN submitter can retain this
information. If a submitter needs to
submit a VDN amendment, the
submitter would enter the file number
associated with the VDN being
amended. The EDGAR system will
associate the file number on the
amendment with the common file
number on the original VDN. Therefore,
the Commission does not agree with the
commenter that the Commission must
continue to allow VDN amendments to
be submitted via email in order to be
able to associate terminations or
amendments with an original VDN.
Finally, as discussed in the Proposing
Release, the Commission understands
that VDNs may contain information that
is sensitive to one or both of the
counterparties. If a VDN submitted to
the Commission includes confidential
information, the SBS Entity can request
confidential treatment of the
information.334 If such a confidential
treatment request is made, the
Commission anticipates that it would
keep the information confidential,
subject to the provisions of applicable
law; 335 whether any material is
confidential is determined pursuant to
applicable law, including but not
limited to the Freedom of Information
Act and Commission rules governing
requests for confidential treatment.
D. Compliance Reports Submitted to the
Commission Pursuant to Rule 15fk–
1(c)(2)(ii)(A)
1. Proposed Rule
Rule 15fk–1(c) requires that the chief
compliance officer (‘‘CCO’’) of an SBS
Entity prepare and sign an annual
compliance report (‘‘CCO report’’) 336
that must be submitted to the
Commission within 30 days following
the deadline for filing the SBS Entity’s
334 See

17 CFR 200.83.
e.g., 5 U.S.C. 552 et seq.; 15 U.S.C. 78x
(governing the public availability of information
obtained by the Commission). See also Risk
Mitigation Adopting Release, 85 FR at 6389–90.
336 For purposes of this release, the term ‘‘CCO
report,’’ when used with respect to an SBS Entity
relying on substituted compliance pursuant to a
Commission order regarding the requirements of
Exchange Act section 15F(k) and Rule 15fk–1, refers
to, as applicable, reports that must be provided by
the SBS Entity to the Commission as a condition to
the SBS Entity relying on substituted compliance
orders regarding the requirements of Exchange Act
section 15F(k) and Rule 15fk–1.
335 See,

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annual financial report with the
Commission pursuant to section 15F of
the Exchange Act and the rules and
regulations thereunder.337 Rule 15fk–
1(c) does not specify the manner in
which the CCO report must be
submitted, whether in paper or
electronic format.338 Accordingly, prior
to these amendments, an SBS Entity
could submit its CCO report as a paper
or electronic submission. To facilitate
electronic submission of CCO reports,
the Commission updated the EDGAR
system to receive the reports
electronically. In 2023, approximately
50% of registrants submitted their CCO
reports electronically through EDGAR in
PDF format.
The Commission proposed to amend
Rule 15fk–1(c)(2)(ii)(A) to require CCO
reports to be submitted electronically
through EDGAR in Inline XBRL (i.e., as
an Interactive Data File in accordance
with Rule 405 of Regulation S–T).339 As
proposed, the required electronic
submission of these reports through
EDGAR would specify the manner of
submission, streamline and simplify the
filing process for an SBS Entity and the
Commission, eliminate the need to
establish manual processes that may
introduce error, and make submissions
available immediately to Commission
staff.340 As explained in the Proposing
Release, requiring CCO reports to be
submitted in Inline XBRL format would
allow Staff to better utilize CCO reports
to gauge the soundness of SBS Entity
compliance programs, as well as to,
among other things, enable EDGAR to
perform technical validations upon
intake of the reports, thus potentially
improving the quality of the submitted
data by decreasing the incidence of nonsubstantive errors.341
2. Final Rule
Based on the Commission’s
experience over the course of
implementing Rule 15fk–1(c), and after
considering the public comments, the
Commission is adopting the
amendments to Rule 15fk–1(c) as
proposed. Accordingly, final Rule 15fk–
1(c) requires SBS Entities to submit CCO
reports electronically in Inline XBRL
through EDGAR.342 Under the final rule,
SBS Entities will no longer be able to
submit CCO reports to the Commission
via email, in PDF format on EDGAR, or
337 17

CFR 240.15fk–1(c).
id.
339 See Proposing Release, 83 FR at 23959.
340 See id.
341 See id.
342 The amendment does not change what is
required to be included in the CCO report under
Exchange Act Rule 15fk–1(c). See 17 CFR 240.15fk–
1(c).
338 See

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in paper. This includes SBS Entities
relying on Commission orders granting
substituted compliance pursuant to
Exchange Act Rule 3a71–6.343

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Requirement To Submit CCO Reports
Through EDGAR
With respect to the requirement to
submit CCO reports through EDGAR,
one commenter supported the proposal,
urging the Commission to require a
single process for the reporting of all
CCO reports.344 According to the
commenter, allowing reporting entities
to report in different formats, using
different standards, will lead to
confusion and added expense to the
marketplace.345 Another commenter
objected generally to requiring firms to
submit any forms, including but not
limited to CCO reports, on EDGAR until
EDGAR’s perceived technical
deficiencies are addressed, including, as
relevant here, assurances that EDGAR
has adequate processes in place to
ensure that CCO reports and other
confidential reports are, and remain,
confidential.346
It is appropriate to require SBS
Entities to submit CCO reports on
EDGAR. First, as the Commission stated
in the Proposing Release, using EDGAR
as opposed to permitting each registrant
to decide on its own submission
format—whether that be in paper, via
email to the Commission, or on
EDGAR—provides a more streamlined
and simplified submission process,
eliminates the need to establish manual
processes that may introduce error, and
provides a way for the Commission staff
to receive CCO reports immediately.
Approximately half of SBS Entities
already submit their CCO reports in PDF
format via EDGAR, and the remainder
should easily be able to utilize EDGAR
because those entities should already
have obtained access to EDGAR in
connection with their registration with
the Commission. Second, with respect
to the concerns about confidentiality, as
343 Rule 3a71–6 under the Exchange Act permits
the Commission to determine that registered nonU.S. major security-based swap participants may
satisfy certain requirements under the Exchange Act
section 15F and the rules and regulations
thereunder by complying with comparable non-U.S.
requirements. 17 CFR 240.3a71–6. SBS Entities that
elect to fulfill the requirements of Rule 15fk–1
through substituted compliance must provide home
country report(s) described in the relevant Order
Granting Substituted Compliance, in English. See,
e.g., Order Granting Conditional Substituted
Compliance in Connection With Certain
Requirements Applicable to Non-U.S. SecurityBased Swap Dealers Subject to Regulation in the
Swiss Confederation, Exchange Act Rel. No. 93284,
86 FR 57455, 57466. See also discussion supra at
section I.F.
344 See XBRL Letter at 9.
345 See id.
346 See SIFMA 5/22/2023 Letter at 13.

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a general matter, the CCO reports are
non-public, and the amendments we are
adopting today do not change existing
rules and processes with respect to
confidential treatment of materials
submitted to the Commission.347
Inline XBRL Structured Data
Requirement
With respect to the proposed
requirement to submit CCO reports in
Inline XBRL structured data format, one
commenter stated that ‘‘preparing this
data in an unambiguously machinereadable format will improve
accessibility to the data for retrieval,
data aggregation, and analysis.’’ 348 That
same commenter stated that Inline
XBRL can render both human- and
machine-readable data from CCO
reports.349 That commenter added that
unstructured data would require
Commission staff to process each file
individually and vet them for accuracy.
Structured, machine-readable data,
alternatively, can be processed in
seconds using Inline XBRL software.350
Another commenter stated that the
structured data requirement would
place a burden on SBS Entities that are
not affiliated with companies already
familiar with structured data
taxonomies. That same commenter
added that the structured data
requirement would require firms to hire
additional personnel and expend
substantial resources to comply.351 This
commenter stated that the result of
XBRL tagging could be achieved
through lower cost means, such as PDF
documents which ‘‘can be searched and
redlined with ease.’’ 352 The commenter
347 See Rule 83, 17 CFR 200.83. The commenter
also requested that the Commission revise its Rules,
specifically, Exchange Act Rule 24b–2 to allow
firms to request confidential treatment when
submitting the CCO report in EDGAR, rather than
submitting a separate request under Commission
Rule 83, which provides a process for requesting
that information not be disclosed in response to
Freedom of Information Act requests. See id. at 10.
However, Rule 24b–2 applies when the Commission
needs to decide whether information will be
disseminated to the public upon the filing of the
information. 17 CFR 240.24b–2. CCO reports are not
provided to the public upon submission. See 17
CFR 240.15fk–1(c)(ii). The Commission’s website
provides information for security-based swap
dealers seeking to request confidential treatment for
CCO reports, including the email address for
submitting email requests for confidentiality under
Rule 83. See Requesting Confidential Treatment for
CCO Annual Reports, SEC.gov | Frequently Asked
Questions Regarding Chief Compliance Officer
Annual Reports Submitted by Security-Based Swap
Dealers and Major Security-Based Swap
Participants. See also infra section VII.A
(discussing, among other things, security
enhancements to EDGAR).
348 See XBRL Letter at 9.
349 See id.
350 See id at 10.
351 See SIFMA 5/22/2023 Letter at 4.
352 See id. at 6.

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stated that XBRL requirements will
require firms to overhaul their entire
timelines for preparing and submitting
reports because firms will need to
provide service providers and vendors
with time (often three-to-four business
days) to conduct XBRL tagging,
rendering, and processing.353 That same
commenter stated that the primary
benefits of Inline XBRL tagging involve
review of numerical submissions and
that tagging is not necessary given the
narrative format of CCO reports.354
Requiring CCO reports to be
submitted in Inline XBRL structured
data format facilitates access to the
information included on the CCO
reports, enabling Commission staff to
perform more efficient retrieval,
aggregation, and comparison across
different SBS Entities and time periods,
as compared to an unstructured PDF,
HTML, or ASCII format requirement for
the reports.355 One commenter
disagreed that an Inline XBRL
requirement provides benefits for the
CCO report.356 This commenter
characterized the CCO report as an
unstructured, narrative-based report,
and stated that an Inline XBRL
requirement does not facilitate analysis
or comparison because narrative reports
do not contain standardized, easily
comparable elements.357
The Commission disagrees with this
point. While CCO reports were not
previously ‘‘structured’’ in the machinereadable sense, there are clearly
delineated regulatory subparagraphs
(specifically, Rule 15fk–1(c)(2)(i)(A)
through (E) under the Exchange Act)
that designate the minimum content
which CCO reports must contain.358 The
Inline XBRL requirement under the
amended rules will involve the creation
of a taxonomy including specific tags
that map onto each of these
subparagraphs. SBS Entities’ use of
these tags to identify each particular
disclosure in the CCO report will enable
staff to analyze all (or subsets of) SBS
Entities’ disclosures in response to any
particular subparagraph of interest,
including to determine whether SBS
Entities have complied with each
substantive component of the CCO
report required under Rule 15fk–
1(c)(2)(i). This will make it easier for
staff to retrieve, sort, filter, compare, or
aggregate the disclosures on CCO
reports, which frequently contain
353 See

id. at 5.
id. at 6.
355 For further discussion of the structured data
requirements, see infra section VII.A.
356 See SIFMA 5/22/2023 Letter at 7.
357 See id.
358 See 17 CFR 240.15fk–1(c)(2)(i)(A) through (E).
354 See

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lengthy narratives, to gauge the
soundness of SBS Entity compliance
programs (e.g., by enabling staff to
broadly identify any areas for
improvement that were widely cited by
SBS Entities in their CCO reports in one
reporting period, and then identify
whether SBS Entities generally made
changes to their policies and procedures
to implement that improvement in the
subsequent reporting period).359 The
application of specific tags to narratives
in the CCO reports will also enable to
staff to create customized reports that
will facilitate a more comprehensive
approach to risk identification and
analysis. In this manner, staff will be
better able to assess compliance with
the Exchange Act and rules and
regulations thereunder applicable to
SBS Entities.360
As discussed elsewhere in this
release, the Commission also disagrees
that the structured data requirement
would require firms to hire additional
personnel and expend substantial
resources to comply.361 That said, if
SBS Entities encounter unreasonable
effort or expense complying with this
aspect of the rule, the Commission
encourages those entities to consult
with Commission staff or request an
extension of time under the existing
standard and process set forth in Rule
15fk–1(c)(2)(iii).362
Substituted Compliance Considerations
One commenter stated that ‘‘SBS
Entities that rely on substituted
compliance pursuant to Exchange Act
Rule 3a71–6 would face particularly
undue timing pressures, as substituted
compliance orders generally require
these firms to submit their home
country CCO Reports no later than 15
days from submission to the entity’s
management body.’’ 363 That commenter
359 See

17 CFR 240.15fk–1(c)(2)(i)(B) and (C).
Business Conduct Standards for SecurityBased Swap Dealers and Major Security-Based
Swap Participants, Exchange Act Release No. 77617
(Apr. 14, 2016), 81 FR 29959, 30054 (May 13, 2016)
(stating that the proposed (and subsequently
adopted) requirements for Rule 15fk–1, including
the requirement for the chief compliance officer to
prepare an annual compliance report that is
submitted with the Commission, ‘‘underscore[s] the
central role that sound compliance programs play
to ensure compliance with the Exchange Act and
rules and regulations thereunder applicable to
security-based swaps’’); see also Business Conduct
Standards for Security-Based Swap Dealers and
Major Security-Based Swap Participants, Exchange
Act Release No. 64766 (June 29, 2011), 76 FR 42395,
42435 (July 18, 2011).
361 For further discussion of costs related to Inline
XBRL requirements, see infra section VII. and
section X.C.2.
362 17 CFR 240.15fk–1(c)(2)(iii). Extensions of the
deadline to submit CCO reports will be granted at
the discretion of the Commission. Id.
363 See SIFMA 5/22/2023 Letter at 5.

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360 See

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added that if the Commission does
require ‘‘firms to use specific tags in
their CCO Report [. . .] it should allow
substituted compliance firms to
continue submitting home-country
reports in their current form.’’ 364
Another commenter stated that the
Commission should require a single
process for all CCO reports, because
‘‘[a]llowing reporting entities to report
in different formats, using different
standards, will lead to confusion and
added expense in the marketplace.’’ 365
That commenter continued that
‘‘[p]rocessing data in structured,
machine-readable XBRL format takes
seconds’’ compared to much-longer
processing times for HTML, PDF, and
image files.366 As stated previously,
requiring CCO reports to be submitted
in Inline XBRL structured data format
facilitates access to the information
included on the CCO reports, enabling
automated data retrieval and
aggregation, which allows Commission
staff to perform more efficient analysis
and comparison of the disclosures
across different SBS Entities and time
periods.367 These benefits apply equally
whether an SBS Entity is complying
directly with Rule 15fk–1 or relying on
a substituted compliance order.368 With
respect to the comment raised about
undue timing pressure, that same
commenter acknowledged that any
actual timing challenge was unknown
and based on an assumption about the
‘‘number of tags typically associated
with Inline XBRL reports’’ and
expectation that the required changes
would be quite broad.369
The Commission disagrees with the
commenter. The substance of the
commenter’s objection is about the
perceived burden and costs associated
with the anticipated taxonomy, which
we address below,370 rather than an
364 See

id. at 7.
XBRL Letter at 9.
366 See id. at 10.
367 For further discussion of the structured data
requirements, see infra section VII.A.
368 For further discussion of structured data
requirements for firms relying on substituted
compliance, see supra section I.F.
369 See SIFMA 5/22/2023 Letter at 5.
370 See infra sections X.C.2.b, IX.D.9 and IX.D.15.
As further explained in the Economic Analysis and
Paperwork Reduction Act, the Commission revised
its estimates in the initial compliance year to
account for the additional burden of determining
which narrative descriptions within its home
country report correspond to descriptions
addressed in Rule 15fi–1(c)(2) and must therefore
be tagged. However, on an ongoing basis firms that
rely on substituted compliance will incur the same
costs to tag home country reports as firms that do
not rely on substituted compliance, because in each
case, the firm will incur the cost of applying Inline
XBRL tags to the same information required by the
Exchange Act. See infra note 685 (outlining that the
total annual hour burden is 98 hours per
365 See

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identified timing concern. Permitting
SBS Entities relying on substituted
compliance to avoid the structuring
requirement, while requiring SBS
Entities complying directly with Rule
15fk–1 to submit structured CCO
reports, would decrease the staff’s
ability to inspect, examine, and
supervise the compliance of those SBS
Entities.371 It would also hamper the
staff’s ability to perform more efficient
retrieval, aggregation, and comparison
across different SBS Entities and time
periods.372 Finally, permitting SBS
Entities relying on substituted
compliance to avoid the structuring
requirement for home country reports
would result in an uneven framework
that imposes additional requirements on
SBS Entities complying directly with
Rule 15fk–1.
SBS Entities, including those relying
on substituted compliance, will not be
required to submit CCO reports in Inline
XBRL format until January 1, 2026,
which will give SBS Entities sufficient
time to adapt to the new Inline XBRL
requirements and enable the
development of systems or tools that
can generate Inline XBRL tagging of
those reports, including home country
reports submitted by SBS Entities
relying on substituted compliance. SBS
Entities will also have an opportunity to
provide technical feedback on the
proposed taxonomies once they are
published (prior to January 1, 2026),
including whether SBS Entities relying
on substituted compliance anticipate
specific technical difficulties as a result
of those proposed taxonomies.373 While
technical feedback on the proposed
taxonomies will be welcomed and
considered, the fundamental
requirement to provide CCO reports
using structured data will not change
during that process. Any input on
confusion raised by the tagging process
can be provided as technical feedback
after the proposed taxonomies are
published. finally, to the extent SBS
Entities relying on substituted
compliance can demonstrate difficulty
submitting structured home country
respondent in the initial year, 5 hours of which is
structuring, and 96 hours per respondent in
subsequent years, 3 hours of which is structuring).
371 See, e.g., Order Granting Conditional
Substituted Compliance in Connection with Certain
Requirements Applicable to Non-U.S. SecurityBased Swap Dealers Subject to Regulation in the
Swiss Confederation, 86 FR 57455, at 57456 (Oct.
15, 2021).
372 See Proposing Release at 23959. See also infra
section X.C.2.b.
373 See infra sections VII.A (discussing the draft
taxonomy publication process) and X.C.2.b
(specifying estimated cost ranges for the structuring
of CCO reports and home country reports, with
expected costs ranging from approximately $1,200
to $6,200 in the first year of compliance).

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
reports within the 15-day time frame
without incurring unreasonable effort or
expense, the Commission will consider
requests for an extension of time in
order to satisfy the structuring
requirement.
VI. Amendments Regarding the FOCUS
Report and Signature Requirements in
Rule 17a–5, 17a–12, and 18a–7 Filings
This release adopts a number of
amendments to the FOCUS Report to
correct technical errors and provide
clarifications, with the goal of
improving the accuracy of the
information the Commission collects on
the FOCUS Report. In addition, the
Commission is allowing electronic
signatures in Rule 17a–5, 17a–12, and
18a–7 filings, including the FOCUS
Report. The amendments are described
in more detail below.
A. Corrective and Clarifying
Amendments to the FOCUS Report
1. Computation of Minimum Regulatory
Capital Requirements
Rule 15c3–1 instructs a broker-dealer
that is also a futures commission
merchant (‘‘FCM’’) to report the greater
of the broker-dealer ratio requirement or
‘‘4 percent of the funds required to be
segregated’’ pursuant to the CFTC
rules.374 However, the Calculation of
Minimum Net Capital Requirement
subsection in the broker-dealer
Computation of Minimum Regulatory
Capital Requirements section of the
FOCUS Report Part II does not include
a reference to the 4% of segregated
funds ratio even though this section of
the form is intended to document a
firm’s Rule 15c3–1 calculation. To align
the FOCUS Report’s net capital
computation with Rule 15c3–1, the
Commission proposed to add a line for
the reporting of 4% of segregated funds
and to renumber other lines to clarify in
the FOCUS Report when certain
computations should be made as set
forth in Rule 15c3–1’s net capital
computation. These changes were
intended to conform the FOCUS Report
to Rule 15c3–1, with no substantive
impact on the broker-dealer’s required
capital computation under Rule 15c3–
1.375 The Commission received no
comment on renumbering lines to
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374 See

17 CFR 240.15c3–1(a)(1)(iii).
Commission proposed the following
changes to the Calculation of Minimum Net Capital
Requirement subsection in the Computation of
Minimum Regulatory Capital Requirements section
of FOCUS Report Part II: (1) delete old Line 5Bi; (2)
add new Line 5C; (3) add a subtotal line as new
Line 5D and renumber subsequent lines and line
references accordingly; and (4) move old Line 5D
to new Line 7 and renumber subsequent lines and
line references accordingly.
375 The

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clarify at what point in the net capital
computation to compute the percentage
of the risk margin amount (if applicable)
and the 10% addition for broker-dealers
engaged in reverse repurchase
agreements, and for the reasons
discussed above, is adopting these
changes as proposed.
The Proposing Release requested
comment on whether to amend Rule
15c3–1, as well as Rule 15c3–1d which
also cross-references the CFTC’s
segregated funds requirement in
identifying conditions for satisfactory
subordination agreements, and solicited
comment on whether the Commission
should amend Rules 15c3–1 and 15c3–
1d to remove references to these
requirements that are no longer in effect
under the CFTC’s rules. The
Commission received comment stating
that the Commission should remove
references to the CFTC’s segregated
funds requirement from Rules 15c3–1
and 15c3–1d. The commenter stated
that the 4% of segregated funds
requirement ‘‘is an outdated, irrelevant
requirement, as the CFTC has not
imposed the 4% requirement for nearly
two decades.’’ 376 In light of the
comments received, which merit further
consideration, the Commission is not
amending Rules 15c3–1 and 15c3–1d to
remove references to the CFTC’s
segregated funds requirement at this
time.
2. Statement of Income (Loss) or
Statement of Comprehensive Income, as
Applicable
The Commission also proposed to
amend FOCUS Report Part II’s income
statement. Prior to these amendments,
the income statement only provided
fields for reporting revenue from
securities commissions, even though
firms may generate revenue from other
types of commissions (e.g., commodity
transactions and insurance products).
Because it is important for the
Commission to receive comprehensive
data on all types of commission revenue
to ensure compliance with relevant
rules and properly supervise firms, the
Commission proposed to revise the
revenue section of the income statement
to account for these other types of
commission revenue.377
One commenter generally requested
that the Commission update the FOCUS
Report for consistency with generally
376 See Letter from Kyle Brandon, Managing
Director and Head of Derivatives Policy, Securities
Industry and Financial Markets Association (Nov.
21, 2023) (‘‘SIFMA 11/21/2023 Letter’’) at 1–2.
377 The Commission proposed to revise Line 1E
and add new Lines 1F–1H in the Revenue
subsection in the Income Statement section of
FOCUS Report Part II.

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7295

accepted accounting principles
(‘‘GAAP’’) and coordinate more closely
with the FINRA and other regulators
when updating the FOCUS Report,
pointing out as an example that FOCUS
Report Part II’s income statement is
missing information found in FINRA’s
Form SSOI.378 The changes to FOCUS
Report Part II have been coordinated
with FINRA and CFTC staff, and are
intended to align this section of the
form to be more consistent with
FINRA’s Form SSOI’s key revenue and
expense categories but is not an exact
mirror of FINRA’s Form SSOI, as Form
SSOI will continue to be a source of
detailed income statement information.
Further, the Commission has
endeavored to keep the FOCUS Report
consistent with current accounting
principles including GAAP.379 The
Commission received no other comment
on this proposal and for the reasons
discussed above, is adopting it as
proposed with unique line-item
numbers assigned to the new lines, and
one correction to the formula in line
1H.380
3. Computation of CFTC Minimum
Capital Requirements
CFTC rules permit a firm that is
registered with the CFTC as an
introducing broker, an FCM, or a swap
dealer, and also registered with the
Commission as a broker-dealer or SBS
Entity, to file the FOCUS Report in lieu
of the unaudited financial reports
required under the CFTC regulations.381
Because the CFTC is not receiving its
own form from these dual registrants
and relies upon the Commission’s
FOCUS Report as a source of data for
these firms, the Commission’s FOCUS
Report includes several sections or
schedules set forth in the CFTC’s Form
1–FR that address the segregation of
customer funds and the calculation of
CFTC minimum capital requirements to
ensure the CFTC receives complete
information about these firms.382
378 See

Integrated Solutions Letter at 1–2.
e.g., Recordkeeping and Reporting
Requirements for Security-Based Swap Dealers,
Major Security-Based Swap Participants, and
Broker-Dealers, Exchange Act Release No. 87005
(Dec. 16, 2019), 84 FR 68550, 68676 (Dec. 16, 2019)
(amending FOCUS Report Part II to incorporate the
concept of LLC interests in the Ownership Equity
subsection); Disclosure Update and Simplification,
Exchange Act Release No. 83875 (Aug. 17, 2018),
83 FR 50148, 50227 (Oct. 4, 2018) (amending
FOCUS Report Part II to incorporate the concept of
comprehensive income).
380 The formula in line 1H is being corrected so
that it now reads ‘‘(sum of Lines 1E, 1F, and 1G)’’
instead of ‘‘(sum of Lines 1E and 1H)’’.
381 See 17 CFR 1.10(h); 17 CFR 23.105(d)(3).
382 See FOCUS Report Part II’s Computation of
CFTC Minimum Capital Requirements, Statement of
379 See,

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While FCMs are required to complete
the Computation of CFTC Minimum
Capital Requirements section of FOCUS
Report Part II, the FOCUS Report fails
to instruct CFTC-registered introducing
brokers or swap dealers not also
registered as an FCM (‘‘stand-alone
introducing brokers’’ or ‘‘stand-alone
swap dealers,’’ respectively) to complete
this section of the form. Therefore, the
Commission proposed to require CFTCregistered introducing brokers and swap
dealers that are also registered with the
Commission as a broker-dealer or SBS
Entity to complete the Computation of
CFTC Minimum Capital Requirements
section of FOCUS Report Part II. The
Commission received no comment on
this change and for the reasons
discussed above, is adopting it as
proposed with unique line-item
numbers assigned to the new lines.

Part II to add a new line item in the
Computation for Determination of
Customer Reserve Requirements and the
Computation for Determination of PAB
Requirements sections to align these
sections of the FOCUS Report Part II
with the amendments to Rule 15c3–3a
that the Commission adopted in
December 2023.386 The same release
amended Rule 15c3–3a to permit margin
required and on deposit at a covered
clearing agency for U.S. Treasury
securities to be included as a debit item
in the customer and PAB reserve
formulas, subject to certain
conditions.387 The technical
amendment to the FOCUS Report Part II
reflects the update of the schedules to
reflect adoption of the new debit
item.388

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B. Harmonizing FOCUS Report Part IIC
With the Call Report
4. Technical Corrections to FOCUS
FOCUS Report Part IIC requires SBS
Report Parts IIA and II
Entities that are dually registered with
a prudential regulator (‘‘bank SBS
The Commission is making two
Entities’’) to report certain information
technical corrections to FOCUS Report
domestic banks already report on
Part IIA. First, lines 11 and 15 of the
Federal Financial Institutional
Computation of Net Capital
Requirement are being updated to
Examination Council (‘‘FFIEC’’) Form
replace the incorrect cross-reference to
031 (also known as the ‘‘Call
line 19 with a corrected cross-reference
Report’’),389 in an effort to reduce the
to line 18 so that the form matches the
administrative burden of completing
requirements of Rule 15c3–1.383 Second, FOCUS Report Part IIC. The FOCUS
in response to comment received during Report Part IIC is closely modelled on
a meeting with FINRA
FFIEC Form 031, and when the same
representatives,384 the Commission is
386 See 17 CFR 240.15c3–3a; Standards for
amending FOCUS Report Part IIA to
Covered Clearing Agencies for U.S. Treasury
require broker-dealers using the
Securities and Application of the Broker-Dealer
alternative method to compute net
Customer Protection Rule with Respect to U.S.
capital to report the percentage of debt
Treasury Securities, Final Rule, Exchange Act
to debt-equity total.385 This amendment Release No. 99149 (Dec. 13, 2023), 89 FR 2714 (Jan.
16, 2024) (‘‘Treasury Clearing Adopting Release’’).
is appropriate because it correctly
The technical amendment to Rule 15c3–3a inserted
conforms the FOCUS Report Part IIA to
a new Line 17 in both the customer and PAB
paragraph (d) of Rule 15c3–1, which
reserve formulas as a new debit item for margin
requires that all broker-dealers compute required and on deposit with a clearing agency
registered with the Commission under section 17A
the percentage of debt to debt-equity
of the Exchange Act (15 U.S.C. 78q–1) resulting
total.
from the following types of transactions in U.S.
The Commission is making one
Treasury securities in customer accounts that have
technical correction to FOCUS Report
been cleared, settled, and novated by the clearing
Segregation Requirements and Funds in Segregation
for Customers Trading on U.S. Commodity
Exchanges, Statement of Cleared Swaps Customer
Segregation Requirements and Funds in Cleared
Swaps Customer Accounts under Section 4d(f) of
the Commodity Exchange Act, Statement of
Segregation Requirements and Funds in Segregation
for Customers’ Dealer Options Accounts, Statement
of Secured Amounts and Funds Held in Separate
Accounts for Foreign Futures and Foreign Options
Customers Pursuant to CFTC Regulation 30.7.
383 See lines 11 and 15 of the Computation of Net
Capital Requirement section of FOCUS Report Part
IIA.
384 See Memorandum to file number S7–08–23
from Valentina Minak Deng regarding meeting with
representatives of FINRA (Oct. 4, 2023), available
at https://www.sec.gov/comments/s7-08-23/s70823267599-644062.pdf.
385 See new line 26 of the Computation of
Alternate Net Capital Requirement section of
FOCUS Report Part IIA.

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agency: (1) purchases and sales of U.S. Treasury
securities; and (2) U.S. Treasury securities
repurchase and reverse repurchase agreements. See
Treasury Clearing Adopting Release, 89 FR at 2826.
See also Note H to Rule 15c3–3a. As a result of the
new line items, the remaining line items in the
computations of the customer and PAB reserve
formulas are renumbered to reflect the addition of
the new debit item.
387 See Treasury Clearing Adopting Release, 89
FR at 2826.
388 The Commission is adding Line 17 and
renumbering the subsequent lines and crossreferences to those lines in the Computation for
Determination of Customer Reserve Requirements
and Computation for Determination of PAB
Requirements sections of FOCUS Report Part II.
389 See Federal Financial Institutions
Examination Council, Consolidated Reports of
Condition and Income for a Bank with Domestic
and Foreign Offices—FFIEC 031, available at
https://www.ffiec.gov/pdf/FFIEC_forms/FFIEC031_
202203_f.pdf.

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information is solicited in both FFIEC
Form 031 and FOCUS Report Part IIC,
the same line-item number is used in
both forms, except that the FOCUS
Report Part IIC line item ends with an
additional ‘‘b’’ character.390
However, as discussed in the
Proposing Release, since FOCUS Report
Part IIC was adopted, FFIEC Form 031
has been updated resulting in
inconsistencies between FOCUS Report
Part IIC and FFIEC Form 031. Therefore,
the Commission proposed to amend the
assets and liabilities subsections of the
Balance Sheet section,391 the Regulatory
Capital section,392 and the Income
Statement section 393 of FOCUS Report
Part IIC to harmonize FOCUS Report
Part IIC with FFIEC Form 031. The
Commission received comment
supporting these proposed changes and
encouraging further amendments to
conform FOCUS Report Part IIC to
additional changes made to FFIEC Form
031 since the date of the Proposing
Release.394 The Commission agrees that
FOCUS Report Part IIC should align
with FFIEC Form 031. Therefore, in
addition to adopting its proposed
changes to FOCUS Report Part IIC, in
response to the comments the
Commission is also amending the assets
subsection of the Balance Sheet
section 395 and the Income Statement
section 396 of FOCUS Report Part IIC to
match the current version of FFIEC
Form 031.
One commenter asked the
Commission to require FOCUS Report
Part IIC to be filed in XBRL format since
FFIEC Form 031 is already required to
be prepared in XBRL format.397 While
this would make FOCUS Report Part IIC
more consistent with FFIEC Form 031,
this change would make the format of
FOCUS Report Part IIC inconsistent
with the format of FOCUS Report Parts
390 See

Form X–17A–5 Part IIC.
Commission proposed the following
changes to the Balance Sheet section of FOCUS
Report Part IIC: (1) add new Line 2C; (2) revise
Lines 4B, 4D, 10, 15, and 16; and (3) delete Lines
10A and 10B.
392 The Commission proposed the following
changes to the Regulatory Capital section of FOCUS
Report Part IIC: (1) delete Line 4 and renumber
subsequent lines; (2) revise renumbered Lines 4, 9,
and 10, and parenthetical note after Capital Ratios
subheading; and (3) add new Line 8.
393 The Commission proposed the following
changes to the Income Statement section of FOCUS
Report Part IIC: (1) revise Line 7; and (2) add new
Lines F.i, F.ii, G.i, and G.ii, and delete Lines F and
G’s fill-in fields due to addition of sublines.
394 See SIFMA 5/22/2023 Letter at 8.
395 The Commission is revising Lines 2A and 2B
of the Balance Sheet section of FOCUS Report Part
IIC.
396 The Commission is revising Lines 6, 9.F., 9.G.,
9.G.i., and 9.G.ii. of the Income Statement section
of FOCUS Report Part IIC.
397 See XBRL Letter at 10.
391 The

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
IIA and II. More specifically, there is
already a long-standing system in place
for receiving, distributing, and using
FOCUS Report data, and converting
FOCUS Report Part IIC to a separate
format would be disruptive to both filers
and regulators who are already familiar
with the current process in the context
of the FOCUS Report and use the
current system to compare historical
and current data. Finally, the
Commission did not receive comment
from any bank SBS Entities indicating
that such a change would ameliorate or
otherwise further reduce the burden
associated with filing FOCUS Report
Part IIC. Therefore, the Commission is
not requiring FOCUS Reports Part II,
IIA, and IIC to be filed in XBRL format.

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C. OTC Derivatives Dealer FOCUS
Report Filing Requirement
Most broker-dealers file the FOCUS
Report electronically on the FINRA
eFOCUS system. These broker-dealers
file the FOCUS Report pursuant to a
plan established by the broker-dealer’s
SRO, the procedures and provisions of
which have been submitted to and
declared effective by the Commission
pursuant to paragraph (a)(3) of Exchange
Act Rule 17a–5. SBS Entities that are
not dually registered as broker-dealers
are subject to a Commission order that
requires these firms to file the FOCUS
Report electronically on the system
developed by the Commission, the ‘‘SEC
eFOCUS system.’’ 398
OTC derivatives dealers are a type of
broker-dealer that engages in limited
securities activities and is exempt from
SRO membership.399 OTC derivatives
dealers are required to file FOCUS
Report Part II, but unlike broker-dealers
and non-broker-dealer SBS Entities,
OTC derivatives dealers were required,
prior to these amendments, to file
FOCUS Report Part II in paper ‘‘at the
Commission’s principal office in
Washington, DC.’’ 400 Given the
similarities between OTC derivatives
dealers and the broker-dealers and nonbroker-dealer SBS Entities filing FOCUS
Report Part II, the Commission proposed
to amend paragraph (a)(2) of Rule 17a–
12 to require OTC derivatives dealers to
file FOCUS Report Part II on the SEC
eFOCUS system maintained by FINRA.
The Commission received comment
supporting this amendment 401 and for
398 See Order Designating Financial Industry
Regulatory Authority, Inc., to Receive Form X–17A–
5 (FOCUS Report) from Certain Security-Based
Swap Dealers and Major Security-Based Swap
Participants, Exchange Act Release No. 88866 (May
14, 2020), 85 FR 29993 (May 19, 2020).
399 See 17 CFR 240.3b–12.
400 See 17 CFR 240.17a–12(a).
401 See XBRL Letter at 10.

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the reasons discussed above, is adopting
it as proposed.402
D. Signature Requirements in Rule 17a–
5, 17a–12, and 18a–7 Filings
1. Number of Signatures on FOCUS
Report
The cover pages of Parts II, IIA, and
IIC of the FOCUS Report include
signature lines for the filer’s principal
executive officer, principal financial
officer, and principal operations officer
(or their comparable officers).403 The
Commission proposed requiring only
two of the three principal officers’
signatures in an effort to balance the
Commission’s desire for individual
accountability with the burden on the
filer.
One commenter responded with a
request that the Commission require no
signatures on the FOCUS Report since
FOCUS Reports filed through FINRA’s
eFOCUS system do not contain
signatures at all.404 The fact that
FINRA’s eFOCUS system does not allow
signatures in the uploaded filing does
not make it unnecessary for firms to
retain the signed FOCUS Report in their
books and records as is required by the
form.405 Requiring an electronic
signature on the related cover pages of
the FOCUS Report is appropriate
because it helps ensure that the brokerdealer’s senior executives are reviewing
the FOCUS Report. In addition, the
amendment to require fewer signatures
appropriately minimizes the burden
associated with the benefit of this
requirement.
Another commenter requested that
the Commission require only one
signature on the FOCUS Report since
reviewing a firm’s FOCUS Report may
not fall within the responsibilities of
that firm’s principal operations officer,
and it is unnecessary to obtain the
signature of both the principal executive
officer and principal financial officer.406
After further consideration, the
Commission agrees with the commenter
that obtaining two such signatures is
unnecessary because any individuals
that substantially contribute to or cause
violations of these rules may be subject
to potential liability for aiding and
402 See paragraph (a)(2) of Rule 17a–12, as
amended.
403 FOCUS Report Part IIA uses slightly different
wording: Principal Executive Officer or Managing
Partner, Principal Financial Officer or Partner, and
Principal Operations Officer or Partner.
404 See Integrated Solutions Letter at 1–2.
405 See FOCUS Report Part II cover page; FOCUS
Report Part IIA cover page; FOCUS Report Part IIC
cover page. See also 17 CFR 240.0–1(a)(4) (stating
that the Commission’s rules and regulations include
‘‘reports and the accompanying instructions
thereto’’).
406 See SIFMA 5/22/2023 Letter at 9.

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7297

abetting or causing violations by the
firm even if they do not sign the audit
documents.407 In addition, the
Commission agrees that a firm’s
principal operations officer’s
responsibilities may not include the
FOCUS Report. Therefore, the
Commission is modifying the proposed
signature requirement so that the
instructions to Parts II, IIC, and IIA of
the FOCUS Report require the signature
of only the firm’s principal executive
officer or principal financial officer (or
their comparable officers), instead of
requiring the signature of two principal
officers.408
2. Electronic Signatures in Rule 17a–5,
17a–12, and 18a–7 Filings
The Commission proposed to allow
signatories on Rule 17a–5, 17a–12, and
18a–7 filings to choose between
providing either manual or electronic
signatures.409 The Commission
proposed that the signing process for an
electronic signature needs to, at a
minimum: ‘‘(1) Require the signatory to
present a physical, logical, or digital
credential that authenticates the
signatory’s individual identity; (2)
Reasonably provide for non-repudiation
of the signature; (3) Provide that the
signature be attached, affixed, or
otherwise logically associated with the
signature page or document being
signed; and (4) Include a timestamp to
record the date and time of the
signature.’’ 410 These requirements,
which were first identified in the
Commission’s Electronic Signatures
Release, are needed so that the
Commission can verify the authenticity
of the electronic signature, but are
intended to be technologically neutral
and allow for different types and forms
of electronic signatures, provided that
the signing process satisfies the
aforementioned conditions that relate to
the validity and enforceability of an
electronic signature.411
Commenters unanimously supported
electronic signatures,412 and for the
reasons discussed above, the
Commission is adopting these
407 See,

e.g., 15 U.S.C. 78t(e); 15 U.S.C. 78u–3(a).
instructions to Form X–17A–5 Part II,
Form X–17A–5 Part IIC, and Form X–17A–5 Part
IIA, as amended.
409 See amendments to paragraphs (f)(3)(v)(B),
(i)(1)(ii), and (p) of Rule 17a–5; paragraphs (g)(2),
(j)(1), and new paragraph (q) of Rule 17a–12;
paragraphs (e)(3)(v)(B), (h)(1)(ii), and (j) of Rule
18a–7; FOCUS Report Part IIA and instructions;
FOCUS Report Part II instructions; FOCUS Report
Part IIC instructions.
410 See amendment to instructions for FOCUS
Report Parts II, IIA, and IIC.
411 See Electronic Signatures Release, 85 FR at
78225.
412 See, e.g., Integrated Solutions Letter at 3;
SIFMA 5/22/2023 Letter at 9.
408 See

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amendments as proposed. However, one
commenter asked the Commission to
identify an example that satisfies its
electronic signature requirements.413 An
example of an electronic signature using
this signing process is Adobe Acrobat’s
digitally signed certificate, when the
document is locked after signing.414 The
same commenter asked the Commission
to confirm that bank SBS Entities can
use electronic signatures in the FOCUS
Report, which the Commission indeed
confirms.415
VII. Amendments to Regulation S–T
(Including Structured Data
Requirements) and Rule 24b–2

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A. Amendments to Regulation S–T
(Including Structured Data
Requirements)
The Commission proposed to amend
Rule 101(a) of Regulation S–T to
designate Form X–17A–5 Part III,
broker-dealer supplemental reports filed
pursuant to paragraph (k) of Rule 17a–
5, OTC derivatives dealer supplemental
reports filed pursuant to paragraphs (k),
(l), and (m) of Rule 17a–12, Form 17–
H, Form X–17A–19, notices (and
withdrawals of notices) filed pursuant
to Rule 3a71–3(d)(1)(vi), notices (and
amendments, including notices of
dispute termination) submitted to the
Commission pursuant to Rule 15fi–3(c),
and compliance reports submitted with
the Commission pursuant to Rule 15fk–
1(c)(2)(ii)(A) (‘‘Covered EDGAR
Documents’’) as mandated electronic
submissions.416 These amendments
would incorporate the new electronic
submission requirements into the
existing structure of Regulation S–T and
would ensure that the EDGAR rules in
Regulation S–T apply to the forms and
other documents required to be
submitted electronically on EDGAR.
The filings would be added as
mandatory electronic submissions
under Regulation S–T; however,
pursuant to the existing procedures in
Rules 201 and 202 of Regulation S–T,
filers of these filings (except for notices
and withdrawals of notices filed
pursuant to Rule 3a71–3(d)(1)(vi)) could
request temporary or continuing
hardship exemptions if they experience
unanticipated technical difficulties that
prevent the timely submission of an
electronic filing.417 For example, a filer
413 See

SIFMA 5/22/2023 Letter at 9.
Proposing Release at 23962 n. 314.
415 See instructions to FOCUS Report Part IIC, as
amended.
416 The Commission is also adopting a technical
update to Rule 100(c) of Regulation S–T, 17 CFR
232.100(c), to update the name of the Division of
Trading and Markets from the previously used
Division of Market Regulation.
417 See 17 CFR 232.201 and 202.
414 See

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could request temporary and continuing
hardship exemptions for the inability to
timely prepare and submit the
Interactive Data File (i.e., the inability to
timely structure the filing or submission
in Inline XBRL).418
Most commenters supported filing the
annual reports and related filings
electronically on EDGAR,419 although
one commenter encouraged the
Commission to address EDGAR’s
technical deficiencies, stating that
‘‘[h]over-over definitions and links to
relevant rules should [ ] be
standard.’’ 420 The Commission has
stated that it has ‘‘engaged in a multiyear, multi-phase effort to modernize
the EDGAR system, including both
internal and public-facing components.
Security and modernization
enhancements were deployed in June
2020, focusing on technology upgrades
internal to the system.’’ 421 Thus,
individuals can hover over each field on
an EDGAR form for additional
information, and EDGAR provides a link
to the instructions for the applicable
SEC form. Given the benefits of
electronic filing discussed in the
Proposing Release, commenters’ ample
support for electronically filing, and the
fact that the deficiencies identified by
this commenter have already been
addressed, the Commission adopts as
proposed the requirement to file these
documents electronically on EDGAR.
The Commission also proposed to
amend Rule 101(d) of Regulation S–T to
require that all documents, including
any information with respect for which
confidential treatment is requested, filed
pursuant to paragraphs (d) or (k) of Rule
17a–5, paragraphs (b), (k), (l), or (m) of
Rule 17a–12, Rule 17a–19, Rule 17h–2T,
or paragraph (c) of Rule 18a–7, and all
VDNs submitted pursuant to paragraph
(c) of Rule 15fi–3,422 be filed or
submitted in electronic format. This is
intended to ensure that electronically
submitted filings are incorporated into
the existing structure of Regulation S–T.
The Commission received no specific
comment on this proposal and for the
418 See

17 CFR 232.201(c) and 17 CFR 232.202.
e.g., SIFMA 5/22/2023 Letter at 13.
420 See Sage Letter.
421 See Annual Report on SEC website
Modernization Pursuant to Section 3(d) of the 21st
Century Integrated Digital Experience Act (Dec.
2022), available at https://www.sec.gov/files/21stcentury-idea-act-report-2022.pdf.
422 The Commission is modifying the lead-in
sentence of final Rule 101(d) of Regulation S–T to
reflect that some of the items listed in the amended
rule are submissions (e.g., VDNs) rather than filings.
Additionally, the amendments to Rule 101(d) of
Regulation S–T incorporate changes from the
proposal to address revisions to Rule 101(d)
regarding Form N–PX that became effective on July
1, 2024. See Securities Act Release No. 11131 (Nov.
2, 2022), 87 FR 78770, 78787 n. 204 (Dec. 22, 2022).
419 See,

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reason discussed above, is adopting it as
proposed, but with one additional
technical modification. As stated above,
the Commission is amending Rule
101(a) to include Compliance Reports
submitted to the Commission pursuant
to Rule 15fk–1(c)(2)(ii)(A) (‘‘Covered
EDGAR Documents’’) as mandated
electronic submissions. The proposing
release explained that the EDGAR rules
in Regulation S–T would apply to the
forms and other documents proposed to
be submitted electronically on EDGAR;
the proposed rule text, however, did not
include a related amendment to Rule
101(d) adding the reports submitted
pursuant to Rule 15fk–1(c)(2)(ii)(A).
Consistent with the proposing release’s
discussion, the Commission is making
that technical modification to add that
language to the rule text so that reports
submitted pursuant to Rule 15fk–
1(c)(2)(ii)(A) are included in Rule
101(d).423
Structured Data Requirements
The Commission is also amending
Rule 405 of Regulation S–T to
implement the Inline XBRL
requirements.424 Rule 405 sets forth the
Interactive Data File requirements for
Commission filings, and specifies that
Inline XBRL is the structured data
language that must be used for
Interactive Data Files.425 The
Commission’s amendments expand Rule
405 of Regulation S–T to add Inline
XBRL requirements for CCO reports and
for portions of Form X–17A–5 Part III
423 We note that one commenter stated that the
Commission must have adequate processes in place
to ensure that compliance reports submitted
pursuant to Rule 15fk–1(c)(2)(ii)(A) remain
confidential. See SIFMA 5/22/2023 Letter at 13. As
stated above, these reports are non-public, and the
amendments do not change existing rules and
processes with respect to confidential treatment of
materials submitted to the Commission.
424 The amendments to Rule 405 of Regulation S–
T mirror the proposed amendments to Rule 405 of
Regulation S–T, except for changes that have been
made to: (i) preserve amended rule text from rules
that were adopted after the Proposing Release was
published; and (ii) correct two typographical errors.
Specifically, the amendments to Rule 405 of
Regulation S–T retain references to filings made by
special purpose acquisition companies, securitybased swap execution facilities, and unit
investment trusts. See Securities Act Release No.
11265 (Jan. 24, 2024), 89 FR 14158 (Feb. 26, 2024);
Exchange Act Release No. 98845 (Nov. 2, 2023), 88
FR 87156 (Dec. 15, 2023); Securities Act Release
No. 11238 (Sept. 20, 2023), 88 FR 70436 (Oct. 11,
2023). The final amendments also correct the
reference in proposed Rule 405(b)(5)(i) from
‘‘§ 249.517 of this chapter’’ to ‘‘§ 249.617 of this
chapter,’’ and remove an extraneous reference to
‘‘15fk–1’’ in proposed Rule 405(a)(4).
425 See 17 CFR 232.405. See also Proposing
Release at 23964 (discussing the history of XBRL
and Inline XBRL requirements for Commission
filings).

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7299

and related annual filings, Form 17–H,
Form 1, and Form CA–1.426

Inline XBRL Requirements

For Form CA–1, Schedule A and
Exhibits C, F, H, J, K, L, M, O, R, S will
be filed in Inline XBRL.427 For Form 1,
Exhibits D, E (in part), and I will be filed
in Inline XBRL.428 For Form X–17A–5
Part III, all disclosures except the facing
page will be filed in Inline XBRL. For
Form 17–H, Item 4 (the filer’s financial
statements) will be filed in Inline XBRL.
Finally, for CCO reports, all of the
required information will be submitted
in Inline XBRL.429
The Commission is requiring some or
all of each Covered SRO Form, the
information required by Exchange Act
Rule 19b–4(e), Form X–17A–19, Form
X–17A–5 Part III, Form 17–H, and the
VDNs to be provided in custom XMLbased data languages rather than in
Inline XBRL.430 While the majority of
EDGAR filings are filed or submitted in
HTML or ASCII, certain EDGAR filings
are filed or submitted using machinereadable, XML-based languages each of
which is specific to the particular
EDGAR document type being
submitted.431 For these custom XML
filings in EDGAR, filers or submitters
are typically provided the option to
426 See

supra sections II, IV.A, and V.D.
A to the execution page requires
certain descriptive responses to complement the
clearing agency’s execution page disclosures.
Exhibit C requires a description of the clearing
agency’s organizational structure. Exhibit F requires
a description of material pending legal proceedings
involving the clearing agency. Exhibit H requires
the clearing agency’s financial statements. Exhibit
J requires a description of the clearing agency’s
services and functions. Exhibit K requires a
description of the clearing agency’s security
measures and procedures. Exhibit L requires a
description of the clearing agency’s safeguarding
measures and procedures. Exhibit M requires a
description of the clearing agency’s backup systems.
Exhibit O requires a description of criteria
governing access to the clearing agency’s services
and a description of the reasons for imposing such
criteria. Exhibit R requires a schedule of
prohibitions and limitations on access to the
clearing agency’s services. Exhibit S requires, if
applicable, a statement explaining why the clearing
agency should be exempt.
428 Exhibit D requires the financial statements of
the exchange’s subsidiaries and affiliates. Exhibit E
requires, in relevant part, a description of the

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427 Schedule

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either submit the filing directly to
EDGAR in the XML-based data
language, or manually input their
disclosures in an online web application
and/or web form developed by the
Commission that converts the
completed form into an EDGAR-specific
XML document.432
In addition to the custom XML
documents that the Commission
currently requires registrants to file on
EDGAR, the Commission separately
requires broker-dealers to post reports
on order routing and execution on their
own websites (i.e., not on EDGAR) using
an XML-based language specific to those
reports.433 In doing so, broker-dealers
must use the custom XML schema (i.e.,
data language) and associated PDF
renderer that the Commission has
published on its website. The
Commission is amending Exchange Act
Rule 19b–4(e) to require SROs similarly
to post the information required under
the rule on their own websites using the
most recent versions of the related
custom XML schema and the associated

PDF renderer that the Commission will
publish on its website.
Several commenters specifically
addressed the proposed structured data
requirements. One commenter
supported the inclusion of structured
data requirements, stating that
processing data is significantly faster
when the data is structured than when
data is unstructured.434 Another
commenter stated that the use of
structured data where appropriate for
forms, reports, and notices provided by
broker-dealers and SBS Entities,
coupled with the required electronic
filing or submission on EDGAR, would
promote greater standardization and
consistency in reporting and facilitate
investor comparison and analysis of
information across different entities.435
By contrast, two commenters opposed
the inclusion of structured data
requirements, stating that such
requirements would not provide
benefits that justify the attendant
burdens on filers.436 These commenters’
objections, and the Commission’s

manner of operation of the electronic trading
system that the exchange uses to effect transactions
(however, the structuring requirement would not
include the copy of the users’ manual). Exhibit I
requires the exchange’s financial statements.
429 CCO reports must contain the specific
narrative descriptions that Exchange Act Rule 15fk–
1(c) requires. These descriptions must be tagged in
Inline XBRL. Additionally, SBS Entities that
provide the Commission home country reports in
reliance on a Commission substituted compliance
order related to the requirements under Section
15F(k) and Rule 15Fk–1 will need to tag any
portions of the report that contain information
corresponding to the descriptions required by Rule
15fk–1(c)(2)(i). If a firm relying on substituted
compliance provides Rule 15fk–1(c) information in
a report separate from, and in addition to, its home
country report, it will only have to tag that separate
report in Inline XBRL. Similarly, firms relying on
substituted compliance for filing Form X–17A–5
Part III will only need to tag the information that
Exchange Act Rule 18a–7(c) requires.
430 The Commission is not adding a structured
data requirement for the Covered Supplementary
Materials or the notices required by Exchange Act

Rule 3a71–3(d)(1)(vi). See supra sections III and
V.B.
431 Unlike the Inline XBRL requirements, the
custom XML requirements for EDGAR documents
are not explicitly set forth in a separate rule within
Regulation S–T; instead, they are set forth in the
EDGAR Filer Manual. As such, the amendments
that expand Regulation S–T to require electronic
filing or submission of the affected documents in
accordance with the EDGAR Filer Manual also
implement the custom XML requirements. See 17
CFR 232.101(a); 17 CFR 232.301. See also EDGAR
Filer Manual, Volume II, Chapter 8. Current and
Draft Technical Specifications, available at https://
www.sec.gov/edgar/filer-information/current-edgartechnical-specifications.
432 See EDGAR Filer Manual, Volume II, Chapters
8 and 9.
433 See 17 CFR 242.606; 2020 Order Handling
Data Schema and Report Renderer for BrokerDealers, available at https://www.sec.gov/
structureddata/dera_taxonomies.
434 See XBRL Letter at 11.
435 See Wohlfahrt Letter.
436 See SIFMA 5/22/2023 Letter; Integrated
Solutions Letter.

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ER21JA25.013

Inline XBRL Requirements
Schedule A, Exhibits C, F, H, J, K, L, M, 0, R, S
Exhibits D, E (in part), I
All disclosures except facing page
Item 4 (financial statements)
All disclosures

Form
Form CA-1
Form 1
FormX-17A-5 Part III
Form 17-H
CCO reports

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responses thereto, are discussed in
further detail later in this section.
Requiring the Structured Documents
to be filed or submitted in a structured
data language will provide the same
benefits to data users that have been
observed from other structured data
requirements in Commission rules. For
example, structured data requirements
for the aforementioned broker-dealer
order routing disclosures have been
leveraged by financial academics to
compare execution quality across
broker-dealers.437 As another example,
the Commission has used structured
order execution disclosures to inform its
rulemaking efforts.438 Structured data
language requirements for the
Structured Documents will similarly
make the reported disclosures more
readily available, accessible, and
comparable for investors, other market
participants, and the Commission, as
applicable. In addition, for those
Structured Documents that will be filed
or submitted on EDGAR (i.e., all except
for the Rule 19b–4(e) postings), the
structured data requirements enable
EDGAR to perform technical validations
(i.e., programmatic checks to ensure the
documents are appropriately
standardized, formatted, and complete)
upon intake of the documents. This will
improve the quality of the filed or
submitted data by decreasing the
incidence of errors (such as the
omission of values from fields that
should always be populated).
Structuring each Structured
Document will enable functionality that
would vary based on the type of
disclosures included in each document.
As discussed elsewhere in the release,
structured numeric disclosures lend
themselves to mathematical
functionality, such as the identification
of statistical outliers within a given
disclosed metric to screen for potential
areas of greater scrutiny.439 Structured
textual disclosures, on the other hand,
lend themselves to period-over-period
redline comparisons, targeted keyword
437 See, e.g., Schwarz, Christopher and Barber,
Brad M. and Huang, Xing and Jorion, Philippe and
Odean, Terrance, The ‘‘Actual Retail Price’’ of
Equity Trades (Sept. 14, 2022), available at https://
ssrn.com/abstract=4189239 (retrieved from SSRN
Elsevier database).
438 See Regulation Best Execution, Release No.
96496 (Dec. 15, 2022), 88 FR 5440, 5477 (Jan. 27,
2023).
439 Structured Documents that contain numeric
disclosures include Form X–17A–5 Part III, Form
17–H, Form CA–1, Form 1, Rule 19b–4(e)
information (in some cases), VDNs, and CCO
reports required by Rule 15fk–1(c)(2)(ii)(A) (in some
cases). See supra sections II.A, II.D, II.E, IV.A, IV.B,
V.A, V.B, V.D, and infra section X.C.1.b.

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searching, and more sophisticated
sentiment analysis.440
One commenter opposed the
structured data requirements on a
general level and with respect to
specific points.441 The commenter
stated that the structured data
requirements would impose significant
costs on market participants without
providing a clear benefit.442 The
commenter stated further that the XBRL
and custom XML requirements would
require firms to expend substantial
additional resources and undergo
fundamental operational changes.443
The commenter listed several specific
changes that, in its view, the XBRL and
XML requirements would require firms
to undergo, including the hiring of
additional personnel that are proficient
in XBRL and XML, the development of
processes for converting the relevant
data into XBRL and XML and uploading
that data to EDGAR, the training of new
and existing personnel on these
processes, and the overhauling of
systems and operations to integrate the
XBRL/XML production and
processing.444
As the Commission explains in the
discussion of structured data for Rules
17a–5, 18a–7, and 17a–12 above and the
discussion of structured data costs in
the Economic Analysis below, the
Commission disagrees with the
commenter that the structured data
requirements will require firms to
undergo all the described changes. Most
firms will comply with custom XML
requirements by completing fillable web
forms on EDGAR; other firms will have
the requisite sophistication to encode
disclosures using custom XML schemas
without the need for substantial
additional training or hiring of
personnel.445 For Inline XBRL
requirements, firms that outsource
compliance with the structured data
requirements to a third-party service
provider will not need to hire additional
personnel proficient in XBRL and XML,
develop processes for converting data
into XBRL and XML and uploading that
data to EDGAR, train new and existing
personnel on such processes, or
overhaul systems and operations to
integrate XBRL or XML production.
440 Structured Documents that contain textual
disclosures include Form X–17A–5 Part III, Form
17–H, Form CA–1, Form 1, Form 1–N (execution
page only), Form X–17A–19, VDNs, and CCO
reports. See id.
441 See SIFMA 5/22/2023 Letter at 1–7, 9, 11, and
14.
442 See id. at 1.
443 See id. at 4.
444 See id.
445 See infra section X.B.1.

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The commenter also stated that, in
order to submit forms in XBRL, firms
will generally need to hire third-party
training providers, since firms often do
not have these resources in-house.446
The Commission disagrees because, as
stated above, some firms will outsource
XBRL compliance altogether, while
other firms will use software tools that
enable staff to apply Inline XBRL tags to
regulatory documents. Firms that
outsource compliance with structured
data requirements to a third-party
service provider rather than comply
with the structured data requirements
in-house will not need to hire additional
personnel that are proficient in XBRL
and XML, develop processes for
converting the relevant data into XBRL
and XML and uploading that data to
EDGAR, train new and existing
personnel on these processes, or
overhaul systems and operations to
integrate the XBRL/XML production,
because the third-party service provider
would take such actions as necessary.447
Firms that instead comply with
structured data requirements internally
will not need to hire additional
personnel that are proficient in XBRL,
because these firms can license software
tools that allow staff without XBRL
proficiency to apply Inline XBRL tags to
regulatory disclosures without any need
to overhaul the firm’s systems or
operations. These firms will, however,
likely need to implement processes for
the use of such software tools and train
staff on these processes. The
Commission includes these process
implementation and training costs in its
estimates of initial structured data costs
and burdens.448 Accordingly, firms will
not need to hire third-party training
providers to teach staff how to encode
data in XBRL.
The commenter further stated that
many firms will need to purchase XBRL
rendering and validation software and
either purchase Inline XBRL tagging
software or hire a third-party tagging
service provider, and that the process of
diligencing, negotiating with, and
onboarding the numerous third-party
vendors necessary to implement the
structured data requirements would be
very time-consuming and expensive.449
The Commission agrees that firms will
need to purchase Inline XBRL tagging
software or hire a third-party tagging
446 See

SIFMA 5/22/2023 Letter at 4.
infra section X.C.2.b.
448 Specific cost ranges for initial structured data
implementation costs are set forth in section
X.C.2.b. See also infra sections IX.D.2, IX.D.5,
IX.D.9.a, and IX.D.15 (estimating higher structured
data burdens for the first year of compliance
compared to subsequent years).
449 See SIFMA 5/22/2023 Letter at 4.
447 See

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
service provider.450 However, because
Inline XBRL tagging software includes
rendering and validation functions, the
Commission disagrees with the
commenter that firms will also need to
purchase XBRL rendering and
validation software. For firms that
engage third-party tagging service
providers, the Commission disagrees
with the commenter that numerous
third-party vendors are necessary for a
firm to implement the structured data
requirements but agrees with the
commenter that firms which outsource
compliance to a third-party service
provider will undergo initial
implementation costs associated with
diligencing, negotiating with, and
onboarding that service provider. The
Commission has therefore revised the
proposed structured data cost and
burden estimates to add these initial
costs for firms that outsource structured
data compliance to third-party service
providers.451
The commenter stated that structured
data burdens would be especially great
for firms that are not affiliates of public
reporting companies, since these firms
do not currently submit EDGAR filings
in XBRL or XML, and that the XBRL
resources the public filers have
developed for purposes of their 10–K
and 10–Q filings are of minimal utility
for other kinds of reports, such as the
CCO report, because these reports rely
on different systems, personnel,
divisions, processes, and timelines, and
would be subject to different tagging
taxonomies.452 The Commission agrees
with the commenter that some firms
affiliated with public reporting
companies will incur lower burdens and
costs to structure filings in XBRL.453
The Commission disagrees with the
commenter that resources developed for
Form 10–K and 10–Q filings are of
minimal utility for other types of reports
(such as the CCO report), because
whether firms comply with the
structured data requirements by
outsourcing compliance to a third-party
service provider or by licensing Inline
XBRL tagging software to use internally,
the types of content (numeric, narrative,
Boolean, etc.) included within the CCO
report and the other Structured
Documents are the same as the types of
content included within filings that are
currently tagged in Inline XBRL (such as
Form 10–Q and Form 10–K). Because
450 The

burden and cost estimates for structured
data requirements in this release include service
provider and software licensing costs. See infra
sections IX.D.2, IX.D.5, IX.D.9.a, and IX.D.15, and
X.C.2.b.
451 See infra sections IX.D.9.a and X.C.2.b.
452 See id.
453 See infra section X.C.2.b.

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the Structured Documents do not
include novel types of content, the
functionality included in existing Inline
XBRL services and software available on
the market will be able to accommodate
the Inline XBRL tagging of disclosures
in the CCO report and the other
Structured Documents.
The commenter also stated that there
are mechanisms to achieve the
Commission’s objectives that would be
substantially less costly and
burdensome for firms than those
proposed by the Commission, such as
allowing firms to submit PDFs via email
or private file transfer service.454 The
Commission disagrees. To the extent
firms are manually entering data,
inputting values into a fillable form
would not incur substantially higher
costs and burdens compared to
inputting the same information and
submitting the form via other means
such as email. Additionally, to the
extent firms automatically populate PDF
forms by using their own existing
systems, as the commenter suggested it
does, similar processes can be used to
generate filings in a custom XML-based
data language, which can then be
submitted and validated in EDGAR.
Furthermore, as discussed in further
detail in the economic analysis below,
the structured data requirements under
the rule amendments will increase the
accessibility and usability of the
disclosures in the Structured
Documents in ways that cannot be
achieved by PDF documents. For
example, Structured Documents enable
more efficient retrieval, sorting,
filtering, comparison, aggregation, and
other analysis of the disclosures,
thereby increasing transparency and
insight into the operations, governance,
management, financial condition, and
other characteristics of the affected
entities.455
The commenter further stated that, in
the absence of XBRL taxonomies at the
proposal phase, neither registrants nor
other constituencies could have
provided the Commission with robust
feedback on the rule amendments, so
the Commission should submit
proposed XBRL tagging taxonomies and
XML fillable web forms to notice and
comment so the public can identify
potential costs, benefits, and
454 See SIFMA 5/22/2023 Letter at 2. The
commenter also stated that the requirement to
submit fillable web forms on EDGAR in lieu of
PDFs would actually undermine the rule
amendments’ goals by introducing inefficiencies
and opportunities for human error. See id. The
Commission’s response to this comment regarding
fillable web forms and human error is included
above in Section V.C.2.
455 See infra section X.C.1.b.

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ambiguities with these proposals. The
commenter stated that a key
consideration in determining the cost of
preparing reports in XBRL is the
number of required tags, which depends
on the granularity of the taxonomy
(which can, in some cases, have 15,000
to 20,000 tags), but the rule amendments
do not specify a taxonomy or number of
tags.456
The Commission disagrees. XBRL
taxonomies and XML schemas are not
rule requirements and do not
themselves impose a substantive
obligation on affected filers or
submitters; rather, taxonomies and
schemas provide a hierarchical list of
elements that affected filers or
submitters will use when complying
with the structured data
requirements.457 The legal obligations to
structure certain affected documents are
contained within the Exchange Act
rules, the Exchange Act forms, and
within Regulation S–T (including
through cross-references to the EDGAR
Filer Manual), and were all set forth in
the Proposing Release.458 The number of
tags in a taxonomy or schema is driven
by the nature and granularity of the
legal disclosure requirements, since
each tag in a taxonomy or schema is
derived from a particular disclosure
requirement. The extent of compliance
costs arising from Inline XBRL
requirements or custom XML
requirements derives from the legal
disclosure requirements themselves, not
the data model of the taxonomy to be
used for structuring those
disclosures.459
Accordingly, we think it appropriate
for these draft taxonomies and schemas
to be posted after adoption of the final
rule rather than at an earlier point in
time.460 However, there is an
456 See SIFMA 5/22/2023 Letter at 2–3, 5. The
commenter made a similar comment stating that the
rule amendments do not identify specific elements
to be included on the VDNs. See SIFMA 5/22/2023
Letter at 2. Earlier in this release we addressed the
need to identify the specific elements for inclusion
on the VDNs, see supra section V.C.2., but this
section’s discussion of taxonomies and the public
feedback process is also relevant to that comment
on VDNs.
457 See Commission, ‘‘XBRL Glossary of Terms,’’
available at https://www.sec.gov/page/osd_
xbrlglossary (last visited May 27, 2024).
458 See Proposing Release at 24006–24008,
24011–24015, 24022, 24043, and 24054.
459 See infra section X.C.2.b (discussing the costs
associated with structured data obligations under
the rule amendments).
460 Although staff will develop taxonomies
specific to the required disclosures under the
adopted rule, XBRL also uses and implements
existing accounting and reporting standards such as
U.S. GAAP. Accordingly, certain tagging elements
specific to financial statements prepared in
accordance with U.S. GAAP are available for

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opportunity for public feedback on the
XBRL taxonomies and XML schemas. In
keeping with past practice, Commission
staff will post draft versions of the XBRL
taxonomies and XML schemas (from
which fillable web forms on EDGAR are
derived) associated with the rulemaking
for technical feedback from the public
following adoption of the rule
amendments.461 This practice allows
registrants and other interested parties
to provide the Commission staff with
feedback on the technical design of
those taxonomies and schemas in
advance of the compliance date for
structured data requirements.
The commenter also stated that
instead of mandating that firms use
specific structured data languages for
particular reports, the Commission
should adopt a principles-based
approach that requires firms to submit
reports in a machine-readable form.462
The commenter stated that, given the
pace of technological change, it is quite
likely that a prescriptive requirement to
use a particular structured data language
will become obsolete or impractical
within a short period of time.463
According to the commenter, experience
demonstrates that such obsolescence
can create significant challenges for
market participants as well as undue
costs and confusion.464
The Commission disagrees with the
commenter. Specifying a single
structured data language for all filers or
submitters to use for a particular
disclosure requirement is beneficial
because it will assist with efficient,
interoperable analysis of those
disclosures across different filers or
submitters. By contrast, an open-ended
data language requirement would have
allowed different filers or submitters of
the same disclosure to provide that
disclosure in different structured data
languages. This would render data users
such as Commission staff and market
review. See Fin. Acct. Stds. Bd., XBRL: What Is it?
Why the FASB? Who Uses It?, available at https://
www.fasb.org/page/PageContent?pageId=/
staticpages/what-is-xbrl.html&isstaticpage=true; see
also SEC, ‘‘2024 XBRL Taxonomies Update,’’
available at https://www.sec.gov/newsroom/whatsnew/2403-2024-xbrl-taxonomies-update (last visited
Aug. 14, 2024) (stating that U.S. GAAP Financial
Reporting taxonomy and the 2024 SEC Reporting
Taxonomy reflect the same taxonomy versions that
the Financial Accounting Standards Board made
available on its website on December 14, 2023).
461 Currently posted draft taxonomies and XML
schemas are available on the Commission’s website.
See Commission, ‘‘DERA Taxonomies,’’ available at
https://www.sec.gov/structured-data/derataxonomies (last visited May 27, 2024);
Commission, ‘‘EDGAR Technical Specifications’’,
available at https://www.sec.gov/edgar/filer/
technical-specifications (last visited May 27, 2024).
462 See SIFMA 5/22/2023 Letter at 3.
463 See id. at 6.
464 See id.

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participants unable to incorporate
disclosures from filers or submitters
using one data language into the same
datasets and applications as disclosures
of other filers or submitters using
different data languages without
undertaking data conversion processes
that can be burdensome and imprecise.
XBRL and XML are industry standards
that are maintained by standard-setting
bodies (XBRL International and the
World Wide Web Consortium,
respectively) and have been in use for
decades. The Commission believes the
current benefits of efficient and
interoperable analysis of XBRL and
XML structured data by the Commission
and market participants justify the use
of these standards over a principlesbased approach that, although it could
accommodate unknown future
developments, would make it more
difficult for Commission staff and
market participants to compare
disclosures across differing data
languages.465
The commenter specifically
questioned the Commission’s
characterization of benefits for
narrative-based reports (e.g., the CCO
report).466 The commenter stated that
adding Inline XBRL requirements for
those reports would not facilitate
analysis or comparison, because those
reports do not contain standardized,
easily comparable elements. However,
all narrative reports must include
disclosure responsive to applicable
disclosure requirements set forth in the
Commission’s rules and regulations
(e.g., the disclosure requirements set
forth in the subparagraphs of Rule 15fk–
1(c)(2)(i) under the Exchange Act).
While there may be variation in how
different filers or submitters of those
reports respond to those disclosure
requirements, Inline XBRL structuring
will facilitate efficient assessment of
such variations and will also enable
efficient comparisons of a single filer or
submitter’s narrative disclosure over
multiple time periods, allowing data
users to determine how that filer’s or
submitter’s narrative disclosure has
evolved over time. For example,
Commission staff will be able to
efficiently retrieve all disclosures
identifying material non-compliance
matters in response to Exchange Act
Rule 15fk–1(c)(2)(i)(D) across CCO
reports and compare how different CCO
report submitters identified and
465 See W3 Schools, Introduction to XML,
available at https://www.w3schools.com/XML/xml_
whatis.asp (last accessed Apr. 18, 2024); XBRL
International, XBRL Essentials, available at https://
specifications.xbrl.org/xbrl-essentials.html (last
accessed Apr. 18, 2024).
466 See SIFMA 5/22/2023 Letter at 7.

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explained such matters. An analysis like
this is useful and appropriate in the
Commission’s fulfillment of its mission,
because the Commission can more
effectively oversee firms’ compliance
with the mandate in section 15F of the
Exchange Act to conform with business
conduct standards relating to diligent
supervision of the business of each
registered security-based swap dealer
and major security-based swap
participant.467
The same commenter also questioned
why the Commission cited sentiment
analysis as a benefit of Inline XBRL
requirements.468 According to the
commenter, sentiment analysis is
typically used for marketing purposes,
and thus it was not clear to the
commenter why such analysis would be
necessary or beneficial for narrative
reports. However, sentiment analysis is
often used for purposes beyond
marketing, including in assessment of
regulatory disclosures such as
disclosures in Commission filings, in
order to assess the usefulness of
disclosures to end users in the market.
Thus, sentiment analysis is relevant to
our assessment of the benefit of
requiring narrative reports to be
structured under the rule
amendments.469
Another commenter specifically
disagreed with the Commission’s view
that structuring broker-dealer reports in
XBRL would provide benefits that
justify compliance burdens.470 This
commenter stated that, because
regulators receive periodic FOCUS
reports that are encoded as they have
been for decades, regulators do not need
encoded (i.e., machine-readable) brokerdealer financial statements.471 The
Commission disagrees with the
commenter’s point, because the
amended rules include Inline XBRL
requirements for the annual brokerdealer audited reports (Form X–17A–5
Part III), and those reports include more
disclosure—such as the notes to the
financial statements and the exemption
reports—than the periodic FOCUS
reports do.472 Because regulators will be
able to analyze this additional
information much more efficiently
when provided in a structured,
machine-readable format rather than in
467 See

Section 15F(h)(1)(B) of the Exchange Act.
id.
469 See infra section X.C.1.b (discussing the use
of sentiment analysis to assess disclosures in
Commission filings).
470 See Integrated Solutions Letter at 2–3.
471 See id. at 4.
472 See supra section IV.A. See also infra section
X.C.1.b for additional discussion of the anticipated
benefits arising from the structured data
requirements.
468 See

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paper or in PDF format, regulators—and
ultimately the markets—will derive a
significant benefit from the Inline XBRL
requirement for Form X–17A–5 Part III.
The same commenter also stated that
customers of broker-dealers do not read
Form X–17A–5 Part III, and investors in
broker-dealers do not need Form X–
17A–5 Part III.473 The Commission
disagrees with this statement—there are
multiple examples of public market
participants using Form X–17A–5 Part
III information to the benefit of brokerdealer investors and customers.474
Finally, the commenter suggested
that, should the Commission
nonetheless include a structuring
requirement for Form X–17A–5 Part III
under the rule amendments, the filing
period for annual financial statement
filers be extended by fifteen days to
allow for XBRL encoding to be
accomplished. In light of the estimated
hourly burdens for broker-dealers
subject to Inline XBRL tagging
requirements, the Commission believes
broker-dealers will be able to meet the
existing filing period for Form X–17A–
5 Part III.475 Nonetheless, if brokerdealers encounter unanticipated
technical difficulties, they can extend
the deadline by up to six days with a
temporary hardship exception under
Rule 232.201 and if they experience
undue burdens or expenses, can request
a continuing hardship exemption under
Rule 232.202.476
The same commenter stated that the
proposal’s lack of clarity around the
structured data requirements and XBRL
taxonomies created difficulty in
473 See

Integrated Solutions Letter at 4.
e.g., Alphacution, ‘‘Goldman, Morgan,
Deutsche: Comparing Bank-Owned Broker-Dealers
in Equities’’ (Aug. 30, 2019) (retrieved from Factiva
database) (using Form X–17A–5 Part III disclosure
to assess the condition of several large bank-owned
broker-dealer subsidiaries); Arun Gupta, ‘‘The
Internal Capital Markets of Global Dealer Banks,’’
Finance and Economics Discussion Series 2021–
036, Washington: Board of Governors of the Federal
Reserve System (Apr. 25, 2021), https://
www.federalreserve.gov/econres/feds/the-internalcapital-markets-of-global-dealer-banks.htm (Federal
Reserve Board staff research paper using balance
sheet data from Form X–17A–5 Part III to examine
the internal capital markets that played a central
role in the financing of dealer banks during the
2008 Global Financial Crisis).
475 In the Economic Analysis and Paperwork
Reduction Act sections of this release, the
Commission describes and quantifies the specific
costs and burdens that broker-dealers will incur in
complying with Inline XBRL requirements for Form
X–17A–5 Part III under the amended rules. On
average, respondents are estimated to incur 7
burden hours for the first response to be tagged in
Inline XBRL, and incur 4.5 burden hours to tag
subsequent responses in Inline XBRL. See infra
sections IX.D.9.a and X.C.2.b.
476 17 CFR 232.201(c), 232.202. A continuing
hardship exception is not deemed granted until the
applicant is notified by the Commission or the staff.
Id.

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determining compliance costs. The
Commission disagrees that the proposal,
which specified exactly which portions
of each affected document would be
structured in which data language,
lacked clarity around the structured
data requirements.477
Notwithstanding the above, the
Commission agrees with the commenter
that making draft versions of
appropriate XBRL taxonomies available
for technical feedback from the public is
a beneficial step in ensuring the
taxonomies will be as useful as
possible.478 In keeping with past
practice, a draft version of each
taxonomy and schema necessary to
implement the structuring requirements
for the Structured Documents will be
made available for public feedback, and
final versions of each taxonomy and
schema (which will take into account
any feedback received) will be
compatible with an updated version of
EDGAR before each related structuring
compliance date.479
The Commission is requiring Inline
XBRL for certain affected documents
and portions or portions thereof, rather
than requiring Inline XBRL for all
affected documents, because Inline
XBRL is more suitable for certain types
of content than other types. Specifically,
Inline XBRL is most suitable for
financial statement disclosures
(including footnotes and schedules
thereto), for narrative disclosures (other
than brief descriptions), and for
disclosures of numeric details nested
within narrative disclosures. From a
technical standpoint, Inline XBRL was
designed to accommodate financial
statement information, including the
particular metadata (e.g., the relevant
fiscal period, whether the line item is
located on the balance sheet, whether
the line item is a credit or debit) that
must be linked to each data point within
the financial statements to fully convey
its semantic meaning to a machine
reader. Inline XBRL is also well suited
477 See Proposing Release at 23964–66.
Furthermore, XBRL taxonomies themselves do not
impose substantive obligations on filers; instead, an
XBRL taxonomy is a technical glossary of tags that
can be used when tagging an Inline XBRL
document, including those prepared in accordance
with Commission regulations. Section X.C.2.b
below discusses the compliance costs with respect
to the structured data requirements.
478 See SIFMA 5/22/2023 Letter at 14.
479 See Securities and Exchange Commission,
Taxonomies, available at https://www.sec.gov/
structureddata/dera-taxonomies (last accessed Apr.
19, 2024) (including a section with draft
taxonomies); Securities and Exchange Commission,
EDGAR Technical Specifications, available at
https://www.sec.gov/edgar/filer/technicalspecifications (last accessed Apr. 19, 2024)
(including a section with draft XML technical
specifications).

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7303

from a technical standpoint of
accommodating lengthier narrative
disclosures, including those with
numeric values nested within narrative
disclosures, while providing
presentation capabilities that preserve
human-readability and maintain
machine-readability. For other types of
disclosures, requiring custom XML data
languages would be more suitable due
to the smaller file sizes of custom XML
documents and the availability of
fillable web forms on EDGAR that
permit filers or submitters to input their
disclosures into the form rather than
structure the disclosures in custom
XML.480
One commenter disagreed with the
Commission’s use of a mix of Inline
XBRL and custom XML requirements
under the rule amendments, and instead
stated that the Commission should use
XBRL requirements rather than custom
XML requirements because the former
greater provides significantly greater
benefit than the latter.481 According to
the commenter, a fillable web form that
automatically generates XBRL files can
be created just as easily as one that
creates a custom XML file.482 While the
Commission agrees that this is
technically feasible, the EDGAR system
is (with limited exception) currently
built to provide fillable web forms for
custom XML filings, not for XBRL
filings, and changing the system would
incur costs and burdens that would not
justify the related benefit.
For those affected documents where
filers are required to attach copies of
existing materials (such as copies of
constitutions, bylaws, written
agreements, applications, and other
documents) rather than disclosures
provided pursuant to the Commission’s
disclosure requirements, the
Commission is requiring filers to upload
those copies as unstructured PDF
documents. Requiring filers to
retroactively structure these existing
documents, which were prepared for
purposes outside of fulfilling the
Commission’s disclosure requirements,
would impose costly compliance
burdens on filers without commensurate
informational benefit associated with
more efficient disclosure use. Thus,
structured data requirements are not
warranted for these copies of existing
documents.
Because the very limited number of
Form 1–N and Form 15A filers and
filings mitigates the benefit derived
480 See also infra section X.E.4 (discussing other
structured data languages that would result in
smaller file sizes than Inline XBRL).
481 See XBRL Letter at 2.
482 See id. at 2.

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from machine-readability of the
disclosures contained therein,
structured data are not required for
Forms 1–N and 15A (other than the
execution pages of those Forms).
Similarly, structured data for ANE
Exception Notices are not required,
because the limited number of data
points on such notices lessens the
utility of any functionality enabled by
structured data (such as efficient
retrieval of individual data points from
structured documents).
B. Amendments to Rule 24b–2
Rule 24b–2 provides procedures that
are the exclusive means for requesting
confidential treatment of information
required to be filed under the Exchange
Act and that allow the Commission to
decide whether information will be
disseminated to the public upon the
filing of the information.483 Paragraph
(b) of Rule 24b–2 provides that, except
as provided in paragraphs (g) and (h) of
the Rule, a person seeking confidential
treatment shall omit from materials filed
with the Commission the confidential
portion.484 Paragraphs (g) and (h) state
that certain entities, as specified in
those paragraphs, shall not omit the
confidential portion from the materials
such entities file with the Commission.
The Commission proposed to add a new
paragraph (j) to Rule 24b–2 to render it
consistent with Rules 17a–5, 17a–12,
and 18a–7, which require firms to file
the portion of the annual audit subject
to a confidential treatment request to be
filed with the public portion. The new
paragraph is subdivided into two parts.
The first sub-paragraph provides that a
broker-dealer shall not omit the
confidential portion from the materials
filed in electronic format pursuant to
paragraphs (d) and (k) of Rule 17a–5,
Rule 17a–12, or Rule 17h–2T. The
second sub-paragraph states that an SBS
Entity shall not omit the confidential
portion of materials filed in electronic
format pursuant to Rule 18a–7. The
Commission received no comment on
this proposal and for the reason
discussed above, is adopting it as
proposed.
The Commission also proposed to add
a new paragraph (k) to Rule 24b–2. The
new paragraph provides that an entity
shall not omit the confidential portion
from the material filed in electronic
format on Form CA–1 pursuant to Rule
17ab2–1, but rather may request
confidential treatment of information
provided on Form CA–1 by completing
483 17 CFR 240.24b–2(a). However, with regard to
Rule 15fi–3(c) security-based swap valuation
dispute notices, see supra note 334 and
accompanying text.
484 17 CFR 240.24b–2(b).

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section X of Form CA–1. The
Commission received no comment on
this proposal and is adopting it as
proposed because requesting
confidential treatment is an appropriate
method of providing complete
information to regulators without
disclosing confidential information to
the public.
VIII. Compliance Dates
The Commission received comments
regarding the compliance dates of the
final rules and rule amendments.485 One
commenter stated that the Commission
should only require compliance once
the Commission has implemented and
tested the necessary infrastructure for
electronic submission and should stage
any requirements.486 The commenter
also stated that the Commission should
not require firms to comply until no less
than two years after the Commission
makes the necessary updates to EDGAR
and finalizes any taxonomies.487
The Commission regularly considers
the implementation and effectiveness of
regulatory filing requirements. As
discussed above, the structured data
requirements will improve the
accessibility and usability of disclosures
by market participants. Consistent with
its mission to protect investors,
maintain fair, orderly, and efficient
markets, and facilitate capital formation,
the Commission plans to monitor the
implementation of these requirements.
Specifically, with regard to the
amendments adopted herein, by March
31, 2028, Commission staff will
complete a review of the
implementation of structured data
requirements by those firms required to
apply machine-readable Inline XBRL
data ‘‘tags’’ to their annual reports and
annual supplemental reports due on or
after June 30, 2026, and the Commission
use of the data. Finally, the Commission
is adopting phased compliance dates for
the rule amendments. This staging is
intended to provide sufficient time for
testing, consistent with the commenter’s
concern. In addition, the phased
compliance dates will give regulated
485 With respect to the compliance date,
commenters requested that the Commission
consider interactions between the proposed rule
and other recent Commission rules. See infra note
862. In determining compliance dates, the
Commission considers the benefits of the rules as
well as the costs of delayed compliance dates, and
potential overlapping compliance dates. For the
reasons discussed throughout the release, to the
extent that there are costs from overlapping
compliance dates, the benefits of the rule justify the
costs. See infra sections X.B.1. and X.C.2.c in the
Economic Analysis for a discussion of the
interaction of the final rule with certain other
Commission rules.
486 SIFMA 5/22/2023 Letter at 3.
487 SIFMA 5/22/2023 Letter at 14.

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entities time to incorporate changes to
their policies, procedures, systems, and
practices made for individual new
requirements.
All firms filing annual reports or
supplemental reports under Rules 17a–
5, 18a–7, and 17a–12, or quarterly and
annual risk assessment reports on Form
17–H pursuant to Rule 17h–2T, on or
after June 30, 2025, are required to file
such reports on EDGAR (in a PDF
format). The Commission has prepared
EDGAR to receive broker-dealer annual
reports electronically, and Commission
staff issued a no-action letter not
objecting to broker-dealers voluntarily
filing their annual reports electronically
on EDGAR in accordance with
instructions posted on the
Commission’s website instead of filing
them in paper form. Approximately half
of broker-dealers have filed the reports
electronically consistent with the staff
no-action letter.488 In practical terms,
with respect to annual reports or
supplemental reports filed on or after
December June 30, 2025, the filing
method outlined in the staff no-action
letter will be used by all firms filing
such reports under Rules 17a–5, 18a–7,
and 17a–12.
With respect to the requirement that
these annual reports and supplemental
reports under Rules 17a–5, 18a–7, and
17a–12 be provided in a structured,
machine-readable data language, the
Commission is adopting phased
compliance dates. First, firms with a
minimum fixed dollar net capital
requirement greater than or equal to
$250,000 as of December 31, 2024, will
be required to apply machine-readable
Inline XBRL data ‘‘tags’’ to their annual
reports and annual supplemental
reports due on or after June 30, 2026.
Firms with a minimum fixed dollar net
capital requirement less than $250,000
as of December 31, 2024 will be
required to apply machine-readable
Inline XBRL data ‘‘tags’’ to their annual
reports and annual supplemental
reports due on or after June 30, 2028.
Rule 17h–2T’s requirement that the
quarterly and annual risk assessment
reports be filed with the Commission
using Inline XBRL will apply to filings
due on or after March 31, 2026. These
compliance timeframes will provide
registrants with adequate time to
prepare, consistent with the
commenter’s concern.
The phased-in approach will help
ensure that market participants receive
machine readable annual reports and
supplemental reports from the largest
firms as soon as practicable, while
488 See Proposing Release at 23947; see also id. at
23947 n.179.

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giving other, smaller filers, that may
need to incur proportionately higher
costs, additional time to develop related
expertise, as well as the opportunity to
benefit from the experience of larger
filers with Inline XBRL. The phase-in
will also provide software vendors and
service providers with additional time
to develop related expertise and scale
up their businesses.489
The Commission is amending Rule
17a–19 and Form X–17A–19 to require
that Form X–17A–19 filings be made on
EDGAR, in a custom XML-based data
language. This requirement applies to
Form X–17A–19 filings due on or after
December 31, 2026. As of February 15,
2024, there are a total of 25 national
securities exchanges and associations,
none of which files Form X–17A–19
electronically on EDGAR. This
December 31, 2026 compliance date
should provide national securities
exchanges and associations time to
prepare to comply with the electronic
filing requirement.
The compliance date for the
amendments to FOCUS Report Parts II,
IIA, and IIC is March 1, 2026, to allow
broker-dealers and SBS Entities
opportunity to become familiar with the
changes and make any necessary
updates to their policies, procedures,
systems, and practices. In addition, it
allows FINRA to develop and test these
updates to its eFOCUS system.
OTC derivatives dealers are required
to file FOCUS Report Part II due on or
after June 30, 2025, electronically on the
SEC eFOCUS system. SBS Entities that
are not dually registered as brokerdealers are already filing FOCUS Report
Part II on the SEC eFOCUS system.
Although OTC derivatives dealers will
need to obtain access to the SEC
eFOCUS system, OTC derivatives
dealers are affiliated with broker-dealers
that are already familiar with the FINRA
eFOCUS system used by broker-dealers
to file their FOCUS Reports. Given the
close similarity between the SEC
eFOCUS system and the FINRA
eFOCUS system, the Commission does
not expect OTC derivatives dealers
would need additional time to prepare

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for making these submissions in the SEC
eFOCUS system.
SROs will be required to begin
posting the information required under
Rule 19b–4(e) on their public internet
websites on September 1, 2025, but may
begin posting that information earlier
once the XML schema and the
associated PDF renderer are published
on the Commission’s website. This early
compliance approach is relevant to Rule
19b–4(e) information under the rule
amendments because such information
is required to be posted on SRO
websites, rather than through EDGAR,
so SROs will not need to wait to comply
with the amended Rule 19b–4(e)
requirement. If an SRO begins posting
information required under Rule 19b–
4(e) on its website earlier than
September 1, 2025, it generally should
continue to do so for all new derivative
securities products under Rule 19b–4(e)
and generally should cease filing any
Forms 19b–4(e) with the Commission.
SROs will be required to file other forms
electronically. Accordingly, the
compliance date for the amendments
related to Form 1 is March 2, 2026, the
compliance date for the amendments
related to Form CA–1 is April 30, 2026,
and the compliance date for the
amendments related to Forms 1–N and
15A is July 1, 2026. Each of these
compliance dates will allow filers the
opportunity to become familiar with the
changes to the forms and make any
necessary updates to their policies,
procedures, systems, and practices.
The compliance date for the
amendments to Rule 15fi–3(c) with
respect to the submission of VDNs is
January 1, 2026. The deferred
compliance date is intended to enable
SBS Entities to incorporate changes to
their policies, procedures, systems, and
practices prior to the applicability of the
new requirements to file VDNs on
EDGAR and in structured data. Between
the effective date of the amendments
and January 1, 2026, SBS Entities
generally should continue to submit
VDNs using the two methods made
available to them prior to the effective
date of the amended rule: (1) electronic
submission in PDF format via EDGAR;

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or (2) submission in PDF format to a
dedicated Commission email address.
The compliance date for the
amendments to Rule 3a71–3(d)(1)(vi) is
January 1, 2026. Accordingly, an entity
seeking to file an ANE Exception Notice
on or after January 1, 2026, will be
required to do so via EDGAR. Similarly,
an entity required to withdraw an ANE
Exception Notice under the amended
rule will not be required to do so until
January 1, 2026. Between the effective
date of the amended rule and January 1,
2026, entities seeking to file an ANE
Exception Notice should submit it to the
electronic mailbox described on the
Commission’s website at www.sec.gov at
the ‘‘ANE Exception Notices’’
section.490 The deferred compliance
date is intended to enable entities to
incorporate changes to their policies,
procedures, systems, and practices prior
to the applicability of the new
requirements. SBS Entities will be
required to submit CCO reports as
required by Rule 15fk–1(c) through
EDGAR in Inline XBRL format
beginning on January 1, 2026. The
deferred compliance date is intended to
enable SBS Entities to incorporate
changes to their policies, procedures,
systems, and practices prior to the
applicability of the new requirements to
submit CCO reports on EDGAR and in
Inline XBRL format. Between the
effective date of the amendments and
January 1, 2026, SBS Entities should
continue to submit CCO reports using
the methods currently available to them:
(1) electronic submission on EDGAR in
PDF format; (2) submission to a
dedicated Commission email address; or
(3) mail.
The compliance date for all other
amended rules will be the effective date
of this release. It is feasible for the
regulated entities subject to these
amended rules to be able to comply by
the required compliance date without
imposing unreasonable cost burdens.
The following chart sets forth the
compliance dates for the rule
amendments:
BILLING CODE 8011–P
490 See

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Rule
• 17 CFR 232.101 's requirements relating to
17 CFR240.17a-5, 17 CFR240.17a-12,
17 CFR 240.17h-2T, and 17 CFR 240.18a7
• 17 CFR 240.17a-5(d)(6) and (k)'s
requirements to file electronically
• 17 CFR 240.17a-12(a)(2)
• 17 CFR 240.17a-12(b)(6), (k), (1)(1), and
(m)(l)'s requirements to file electronically
• 17 CFR 240.17h-2T's requirement to file
electronically
• 17 CFR 240.18a-7(c)(6)'s requirement to
file electronically
• 17 CFR240.15fk-l(c)

•
•
•
•
•
•
•
•
•
•
•
•
•

ddrumheller on DSK120RN23PROD with RULES2

•
•
•

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New requirements apply to submissions due
on or after Jan. 1, 2026
New requirements apply to filings due on or
Rule 19b-4(e)
after September 1, 2025
New
requirements apply to filings due on or
17 CFR 232.101 's requirements relating to
after
March
2, 2026
§ 249.1 (Form 1)
17 CFR 232.405's requirements relating to
§ 249.1 (Form 1)
17 CFR 240.6a-l, 6a-2, and 6a-3
17 CFR 232.101 's requirements relating to New requirements apply to filings due on or
after April 30, 2026
§ 249.200 (Form CA-1)
17 CFR 232.405's requirements relating to
§ 249.200 (Form CA-1)
17 CFR 240.17ab2-1 's requirements
relating to &249.200 (Form CA-1)
17 CFR 232.101 's requirements relating to New requirements apply to filings due on or
after July 1, 2026
§ 249.10 (Form 1-N)
17 CFR 232.101 's requirements relating to
§ 249.801 (Form 15A)
17 CFR 240.6a-4
17 CFR240.15aa-1 and 15aa-2
17 CFR 232.405's requirements relating to For firms with a minimum fixed dollar net
capital requirement greater than or equal to
17 CFR 240.17a-5, 17a-12, and 18a-7
$250,000 as of Dec. 31, 2024: New
17 CFR 240.17a-5(d)(6) and (k)'s
requirements to file as an Interactive Data requirements apply to filings due on or after
June 30, 2026
File
17 CFR240.17a-12(b)(6), (k), (1)(1), and
For all other firms: New requirements apply
(m)(l)'s requirements to file as an
to
filings due on or after June 30, 2028
Interactive Data File
17 CFR 240.18a-7(c)(6)'s requirement to
file as an Interactive Data File
17 CFR 232.405's requirements relating to New requirements apply to filings due on or
after Mar. 31, 2026
17 CFR 240.17h-2T
17 CFR 240.17h-2T' s requirement to file
as an Interactive Data File

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New requirements apply to filings due on or
after June 30, 2025

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

•
•
•
•
•
•
•
•
•

17 CFR 232.101 's requirements relating to
17 CFR 240.17a-19
17 CFR 240.17a-19
Form X-17A-5 Part II
Form X-17A-5 Part IIC
Form X-17A-5 Part IIA
17 CFR 232's amendments relating to 17
CFR 240.3a71-3(d)(l)(vi)
17 CFR 240.3a71-3(d)(l)(vi) requirements
for filing of notices and withdrawals
17 CFR 232's amendments relating to 17
CFR 240.15fi-3(c)
17 CFR 240.15fi-3(c) requirements for
submission of notices of valuation
disputes
All other rule amendments

BILLING CODE 8011–C

IX. Paperwork Reduction Act
Certain provisions of the rules and
rule amendments contain ‘‘collection of
information’’ requirements within the
meaning of the Paperwork Reduction
Act of 1995 (‘‘PRA’’).491 The titles of
these requirements are:
• Form ID (OMB Control No. 3235–
0328); 492
• Rules 6a–1 and 6a–2, Form 1 (OMB
Control No. 3235–0017); 493
• Rule 6a–3 (OMB Control No. 3235–
0021); 494
• Rule 6a–4, Form 1–N (OMB Control
No. 3235–0554); 495
• Rules 15aa–1 and 15aa–2, Form
15A (OMB Control No. 3235–0030); 496
• Rule 17ab2–1, Form CA–1 (OMB
Control No. 3235–0195); 497
• Rule 19b–4(e), Form 19b–4(e) (OMB
Control No. 3235–0504); 498
491 44

U.S.C. 3501 et seq.
17 CFR 249.446.
493 See 17 CFR 249.1; 17 CFR 240.6a–1; 17 CFR
240.6a–2.
494 See 17 CFR 240.6a–3.
495 See 17 CFR 249.10, 17 CFR 240.6a–4; 17 CFR
249.10.
496 See 17 CFR 240.15aa–1; 17 CFR 240.15aa–2.
Form 15A, as adopted, would apply only to one
SRO out of a total of 44 SROs. Although this form
is expected to impact fewer than 10 entities, the
Commission is including this PRA analysis. The
Commission is revising and reinstating collections
of information that were previously approved under
Control Nos. 3235–0030 and 3235–0044. Because
the Commission is consolidating the collections in
amended and re-designated forms, all collections
would be under Control No. 3235–0030 and Control
Number 3235–0044 would remain inactive. In
addition, because of the length of time since these
control numbers were last active, the Commission
is providing completely new burden estimates.
497 See 17 CFR 240.17ab2–1; 17 CFR 249b.200.
498 See 17 CFR 240.19b–4(e); 17 CFR 249.820.

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492 See

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New requirements apply to filings due on or
after Dec. 31, 2026
New requirements apply to filings due on or
after Mar. 1, 2026
New requirements apply beginning January 1,
2026

New requirements apply to notices submitted
on or after January 1, 2026

March 24, 2025

• Rule 19b–4, Form 19b–4 (OMB
Control No. 3235–0045); 499
• Rule 17a–22 (OMB Control No.
3235–0196); 500
• Rule 3a71–3(d) (OMB Control No.
3235–0771); 501
• Rules 15fi–3 to 15Fi–5 (OMB
Control No. 3235–0777); 502
• Rule 15fk–1(c)(2)(ii)(A) (OMB
Control No. 3235–0732); 503
• Rule 17a–5 (OMB Control No.
3235–0123); 504
• Rule 17a–12 (OMB Control No.
3235–0498); 505
• Rule 17a–19 and Form X–17A–19
(OMB Control No. 3235–0133); 506
• Rule 17h–2T (OMB Control No.
3235–0410); 507 and
• Rule 18a–7 (OMB Control No.
3235–0749).508
499 See

17 CFR 249.819; 17 CFR 240.19b–4.
17 CFR 240.17a–22.
501 See 17 CFR 240.3a71–3(d).
502 See 17 CFR 240.15fi–3, 17 CFR 240.15Fi–4
(‘‘Rule 15Fi–4’’), and 17 CFR 240.15Fi–5 (‘‘Rule
15Fi–5’’). The Commission is only modifying Rule
15fi–3, which relates to the requirement that SBS
Entities reconcile outstanding security-based swaps
with applicable counterparties on a periodic basis.
Rule 15fi–3 is included in the same collection of
information as Rule 15Fi–4, which requires SBS
Entities to engage in certain forms of portfolio
compression exercises with their counterparties, as
appropriate, and Rule 15Fi–5, which requires SBS
Entities to execute written security-based swap
trading relationship documentation with its
counterparties, and to periodically audit the
policies and procedures governing such
documentation. The Commission is not changing
Rules 15Fi–4 and 15Fi–5 pursuant to this
rulemaking. Accordingly, those two rules are not
included in the sections that follow.
503 See 17 CFR 240.15fk–1(c)(2)(ii)(A).
504 See 17 CFR 240.17a–5.
505 See 17 CFR 240.17a–12.
506 See 17 CFR 240.17a–19; 17 CFR 249.635.
507 See 17 CFR 240.17h–2T.
508 See 17 CFR 240.18a–7.
500 See

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The Commission is submitting these
requirements to the Office of
Management and Budget (‘‘OMB’’) for
review and approval in accordance with
the PRA and its implementing
regulations.509 Responses to the new
collections of information are
mandatory, or mandatory except to the
extent an exception is available. An
agency may not conduct or sponsor, and
a person is not required to respond to,
a collection of information unless it
displays a currently valid OMB control
number.510
A. Summary of Collection of
Information
1. Form ID
Form ID must be completed and filed
with the Commission by all individuals,
companies, and other organizations who
seek access to file electronically on
EDGAR.511 Accordingly, a filer that does
not already have access to EDGAR must
submit a Form ID, along with the
notarized signature of an authorized
individual, to obtain an EDGAR
identification number and access codes
to file on EDGAR.
2. Rules 6a–1, 6a–2, 6a–3, and Form 1
Rule 6a–1 under the Exchange Act
generally requires that an applicant
seeking to register as a national
securities exchange, or seeking an
exemption from such registration based
on limited volume, file an application
on Form 1 and correct any inaccuracy
therein upon discovery of such
509 44

U.S.C. 3507; 5 CFR 1320.11.
CFR 1320.11(l).
511 17 CFR 249.446.
510 5

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inaccuracy.512 Form 1 contains an
execution page as well as 14 exhibits
that must be filed by the applicant.513
Rule 6a–2 requires a registered national
securities exchange or an exempt
exchange to: (1) amend its Form 1 if
there are any changes to the information
provided in the initial Form 1; and (2)
submit periodic updates of certain
information provided in the initial Form
1, whether such information has
changed or not.514 Rule 6a–3 requires a
national securities exchange or an
exempt exchange to file certain
supplemental material with the
Commission.515 Specifically, Rule 6a–
3(a)(1) requires an exchange to file with
the Commission any material issued or
made generally available to members of,
or participants or subscribers to, the
exchange within 10 days after issuing or
making such material available to such
members, participants or subscribers.516
Rule 6a–3(a)(2) provides that, if
information required by Rule 6a–3(a)(1)
is available continuously on a website
controlled by the exchange, in lieu of
filing such information, the exchange
may provide on Form 1 the URL(s) of
the location(s) on the website where the
information can be found, and certify
that the information is accurate as of its
date and is free and accessible (without
any encumbrances or restrictions) by the
general public.517 Rule 6a–3(b) requires
an exchange to file, within 15 days after
the end of each calendar month, a report
concerning the securities sold on the
exchange during the calendar month.518
The Commission is amending Rules
6a–1, 6a–2, and 6a–3 under the
Exchange Act, as well as Form 1 and the
instructions to Form 1, to make certain
changes and to require the electronic
filing of all filings required by Rules 6a–
1, 6a–2, and 6a–3.

ddrumheller on DSK120RN23PROD with RULES2

3. Rule 6a–4 and Form 1–N
Rule 6a–4 519 sets forth the notice
registration procedures for Security
Futures Product Exchanges and permits
futures exchanges to submit a notice
registration on Form 1–N.520 Form 1–N
requires information regarding how the
futures exchange operates, its rules and
procedures, corporate governance, its
criteria for membership, its subsidiaries
and affiliates, and the security futures
products it intends to trade. Rule 6a–4
also requires entities that have
512 See

17 CFR 240.6a–1.
CFR 249.1.
17 CFR 240.6a–2.
515 See 17 CFR 240.6a–3.
516 17 CFR 240.6a–3(a)(1).
517 17 CFR 240.6a–3(a)(2).
518 17 CFR 240.6a–3(b).
519 17 CFR 240.6a–4.
520 17 CFR 249.10.
513 17

514 See

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submitted an initial Form 1–N to file: (1)
amendments to Form 1–N in the event
any information provided in the initial
Form 1–N is be rendered inaccurate or
incomplete; (2) periodic updates of
certain information provided in the
initial Form 1–N; (3) certain information
that is provided to the Security Futures
Product Exchange’s members; and (4) a
monthly report summarizing the
Security Futures Product Exchange’s
trading of security futures products.
The Commission is amending Rule
6a–4 under the Exchange Act, Form 1–
N and the instructions to Form 1–N, as
well as making clarifying changes to
Rule 202.3(b)(3) to the Commission’s
Informal and Other Procedures, to make
certain changes and to require the
electronic filing of all submissions
required by Rule 6a–4.
4. Rules 15aa–1 and 15aa–2; Form 15A
Under Exchange Act Rule 15Aa–1, an
applicant for registration as a national
securities association must file a
registration statement with the
Commission on Form X–15AA–1.521
Exchange Act Rule 15Aj–1(a) requires
every association applying for
registration or registered as a national
securities association to file with the
Commission an amendment to its
registration statement or any
amendment or supplement thereto
promptly after discovering any
inaccuracy therein. Under Exchange Act
Rule 15Aj–1(b), every association
applying for registration or registered as
a national securities association must
file with the Commission a supplement
to its registration statement or any
amendment or supplement thereto
promptly after discovering any
inaccuracy or any change which renders
no longer accurate any information
contained or incorporated therein.522
Under Exchange Act Rule 15Aj–1(c),
every association applying for
registration or registered as a national
securities association must file annual
and triennial amendments to its
521 See Exchange Act Rule 15Aa–1, 17 CFR
240.15Aa–1 and 17 CFR 249.801. Currently, FINRA
is the only national securities association registered
with the Commission. The NFA, as specified in
Section 15A(k) of the Exchange Act, is also
registered as a national securities association, but
only for the limited purpose of regulating the
activities of NFA members that are registered as
brokers or dealers in security futures products
under section 15(b)(11) of the Exchange Act. There
are no burden estimates currently approved by
OMB for Exchange Act Rule 15Aa–1. See supra note
501.
522 See Exchange Act Rule 15Aj–1(a) and (b), 17
CFR 240.15Aj–1(a) and (b). These filings are
currently submitted on Exchange Act Form X–
15AJ–1, 17 CFR 249.802. See 17 CFR 240.15Aj–1(d).

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registration statement with the
Commission.523
The Commission is amending Rule
15aa–1 and redesignating it as Rule
15aa–1,524 redesignating Rule 15Aj–1525
as Rule 15aa–2, redesignating Form X–
15AA–1 as Form 15A, amending the
instructions to Form 15A, and repealing
Forms X–15AJ–1 and X–15AJ–2 in
connection with the Commission’s
requirement that applicants and
national securities associations
electronically file on a duly executed
Form 15A the information currently
filed on Forms X–15AA–1, X–15AJ–1,
and X–15AJ–2. The Commission is also
revising Rule 15aa–1 to require
electronic filing and an electronic
signature.
The Commission is redesignating
Form X–15AA–1 as Form 15A and
incorporating in Form 15A information
related to amendments and supplements
to the registration statement currently
filed on Form X–15AJ–1 and
information related to the annual
consolidated supplement to the
registration statement currently filed on
Form X–15AJ–2. New Form 15A would
solicit information through prompts on
the form that would better organize the
information that is currently collected
through Forms X–15AA–1, X–15AJ–1,
and X–15AJ–2.
New Form 15A contains eleven
sections. Preceding section I of new
Form 15A, the new form contains
prompts that require the association to
note the basis for submitting Form 15A.
The prompts indicate whether the
submission is an initial application filed
pursuant to Rule 15aa–1 or an
amendment or supplement. Section I is
titled ‘‘Organization,’’ and it solicits
information about the association itself
and requires the association to attach
Exhibits A through D. Sections II
through IX of new Form 15A solicit
information about specific association
rules and other information.
Section X requires the association to
provide the contact information for its
contact employee, and section XI
provides the consent to service and
attestation.
5. Rule 17ab2–1 and Form CA–1
Rule 17ab2–1(a) states that an
application for registration or for
exemption from registration as a
523 See Exchange Act Rule 15Aj–1(c), 17 CFR
240.15Aj–1(c). These filings are currently submitted
on Exchange Act Form X–15AJ–2, 17 CFR 249.803.
See 17 CFR 240.15Aj–1(d). Rule 15Aj–1(c)(1)(ii)
also requires the filing of complete sets of the
constitution, bylaws, rules, and related documents
of the association, once every three years.
524 17 CFR 240.15Aa–1.
525 17 CFR 240.15Aj–1.

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
clearing agency or an amendment to any
such application shall be filed with the
Commission on Form CA–1, in
accordance with the instructions
thereto.526 Form CA–1 includes an
execution page and 19 exhibits. Rule
17ab2–1(e) requires an applicant, a
registered clearing agency, or an exempt
clearing agency to file an amendment to
correct any information reported in
Items 1–3 of Form CA–1 if such
information is, or becomes, inaccurate,
misleading or incomplete for any
reason.527 The instructions to Form CA–
1 require an applicant clearing agency to
file four completed copies of Form CA–
1 with the Commission. In addition, if
an item is amended, the instructions to
Form CA–1 require a registered clearing
agency or an exempt clearing agency to
repeat all unamended items as they last
appeared on the page on which the
amended item appears and to file four
copies of the new page with the
Commission.
The Commission is revising certain
aspects of Rule 17ab2–1, Form CA–1,
and the instructions to Form CA–1 to
make certain changes and to require
electronic filing of applications on Form
CA–1 and subsequent amendments
thereto submitted by applicants,
registered clearing agencies, and exempt
clearing agencies.

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6. Rule 19b–4(e) and Form 19b–4(e)
Rule 19b–4(e) provides that the listing
and trading of a new derivative
securities product by an SRO shall not
be deemed a proposed rule change if the
Commission has approved, pursuant to
section 19(b) of the Exchange Act,528 the
SRO’s trading rules, procedures, and
listing standards for the product class
that would include the new derivative
securities product, and the SRO has a
surveillance program in place for such
product class. Under Rule 19b–
4(e)(2)(ii), SROs are required to submit
Form 19b–4(e) 529 to the Commission
within five business days after
commencement of trading a new
derivative securities product.530 In
addition, Rule 19b–4(e)(2)(i) requires an
SRO to maintain, on–site, a copy of
Form 19b–4(e) for a prescribed period of
time.531
The Commission is amending Rule
19b–4(e) 532 to rescind Form 19b–4(e)
and instead require the information
currently contained in Form 19b–4(e) to
526 17

CFR 240.17ab2–1(a).
527 17 CFR 240.17ab2–1(e).
528 15 U.S.C. 78s(b).
529 See 17 CFR 249.820.
530 See 17 CFR 240.19b–4(e)(2)(ii).
531 See 17 CFR 240.19b–4(e)(2)(i).
532 17 CFR 240.19b–4(e).

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be publicly posted on the listing SRO’s
internet website.
7. Rule 19b–4(j) and Form 19b–4

8. Rule 17a–22
Rule 17a–22 previously required a
registered clearing agency to file with
the Commission three paper copies of
any material (including, for example,
manuals, notices, circulars, bulletins,
lists, or periodicals) issued, or made
generally available, to its participants or
other entities with whom it has a
significant relationship, such as
pledgees, transfer agents, or self–
regulatory organizations, within 10 days
after issuing, or making generally
available, such material.540 Under pre–
existing Rule 17a–22, when the
Commission is not a registered clearing
agency’s ARA, the clearing agency must
at the same time file one paper copy of
the material with its ARA.541
The amendments to Rule 17a–22 do
not change the scope of supplemental
materials that are currently subject to
the rule. However, the amendments
replace the requirement to file multiple
copies of supplemental materials with
the Commission and, where applicable,
the ARA in paper form with a
requirement to prominently post such
materials on a registered clearing
agency’s internet website.542 In
addition, the amendments reduce the
timeframe for registered clearing
agencies to comply with the rule from
10 days to 2 business days. As discussed
above, the two business day timeframe
is consistent with a registered clearing
agency’s obligation under Rule 19b–
4(m) to update its website to post any
rule changes filed pursuant to section
19(b) of the Exchange Act.543 Because
the supplemental materials that are
subject to Rule 17a–22 will have already
been prepared for distribution to a
registered clearing agency’s participants
or other entities with whom it has a
significant relationship, those
documents should be readily available
for the clearing agency to post on its
website within the two business day
timeframe.544

Section 19(b) of the Exchange Act, as
amended, requires each SRO to file with
the Commission, in accordance with
such rules as the Commission may
prescribe, copies of any proposed rule,
or any proposed change in, addition to,
or deletion from the rules of such SRO
(collectively, a ‘‘proposed rule change’’)
accompanied by a concise general
statement of the basis and purpose of
such proposed rule change.533 Rule
19b–4 requires an SRO to submit each
proposed rule change on Form 19b–4.534
Form 19b–4 currently requires a
description of the terms of a proposed
rule change, the proposed rule change’s
impact on various market segments, and
the relationship between the proposed
rule change and the SRO’s existing
rules.535 Form 19b–4 also requires an
accurate statement of the authority and
statutory basis for, and purpose of, the
proposed rule change, the proposal’s
impact on competition, and a summary
of any written comments received by
the SRO.536 An SRO is required to
submit Form 19b–4 to the Commission
electronically, post a copy of the
proposed rule change on its public
website within two business days of its
filing, and post and maintain a current
and complete set of its rules on its
website.537
Rule 19b–4(j) requires that the
signatory to an electronically submitted
rule filing manually sign a signature
page or other document authenticating,
acknowledging, or otherwise adopting
his or her signature that appears in
typed form within the electronic
document, execute that document
before or at the time the rule filing is
electronically submitted, and retain that
document for its records in accordance
with Rule 17a–1.538 Form 19b–4 and the
instructions to Form 19b–4 require that
9. Rules 17a–5, 18a–7, and 17a–12
a duly authorized officer of the SRO
manually sign one copy of the
The Commission is amending Rules
completed Form 19b–4 and that the
17a–5, 18a–7, and 17a–12 to require
manually signed signature page be
540 17 CFR 240.17a–22.
maintained pursuant to section 17 of the
541 Id.
Exchange Act.539 The Commission is
542 By replacing the paper filing requirement for
removing these manual signature
supplemental materials with an internet posting
requirements from Rule 19b–4(j), Form
requirement, Rule 17a–22, as amended, would
19b–4, and the instructions to Form
allow all of a registered clearing agency’s regulatory
19b–4.
authorities to access the materials; thereby
533 15

U.S.C. 78s(b).
534 17 CFR 240.19b–4(b).
535 17 CFR 249.819.
536 Id.
537 17 CFR 240.19b–4(b)(1), (l), (m)(1).
538 17 CFR 240.19b–4(j).
539 17 CFR 249.819.

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eliminating the need to file an additional paper
copy with the clearing agency’s ARA. For this
reason, with respect to a registered clearing agency
for which the Commission is not the ARA, the
amendments would remove the requirement to also
file one paper copy of the supplemental materials
with the clearing agency’s ARA.
543 See 17 CFR 240.19b–4(m).
544 See supra section III.B.1.

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broker–dealers, SBS Entities, and OTC
derivatives dealers to electronically file
with the Commission in Inline XBRL
through the Commission’s EDGAR
system annual audited reports and
related annual filings. The filings were
previously made either in paper, via
email, or voluntarily on the EDGAR
system as PDF documents. In addition,
the Commission is amending Rule 17a–
12 to require OTC derivatives dealers to
file the unaudited FOCUS Report Part II
electronically through the SEC eFOCUS
system instead of in paper. The
Commission is also allowing electronic
signatures in Rule 17a–5, 17a–12, and
18a–7 filings, which includes the
FOCUS Report.
Broker-dealers, SBS Entities, and OTC
derivatives dealers file FOCUS Reports
Part II, IIA, or IIC, which are periodic
unaudited reports about their financial
and operational condition. The
Commission is amending the
instructions to Parts II, IIC, and IIA of
the FOCUS Report to allow only one
named officer’s signature when the
signature belongs to the firm’s principal
executive officer or principal financial
officer (or their comparable officers).
The Commission is also making
corrective and clarifying amendments to
FOCUS Report Part II, technical
amendments to FOCUS Report Part IIA
and amendments to FOCUS Report Part
IIC for consistency with FFIEC Form
031. Finally, the Commission is
amending Rules 17a–5, 18a–7, and Form
X–17A–5 Part III to eliminate the
requirement to notarize the oath or
affirmation associated with brokerdealers’ and SBS Entities’ annual
reports.

ddrumheller on DSK120RN23PROD with RULES2

10. Rule 17h–2T
The Commission is amending
paragraph (a)(2) of Rule 17h–2T to
require that the quarterly and annual
risk assessment reports be filed with the
Commission electronically through
EDGAR as an Interactive Data File in
accordance with Rule 405 of Regulation
S–T. The reports are filed using Form
17–H. The materials filed under the rule
will not change, but the materials will
be filed on EDGAR, and the financial
statements required by Item 4 of the
Form will be structured in Inline XBRL.
11. Rule 17a–19 and Form X–17A–19
In general, Rule 17a–19 requires
national securities exchanges and
associations to file with the Commission
certain information required on Form
X–17A–19 within five business days of
the occurrence of the initiation of
membership, change in membership, or
termination of membership of any
member. The Commission is amending

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Rule 17a–19 and Form X–17A–19 to
require that filings providing such
notifications be made on EDGAR, in a
custom XML-based data language.
12. Rule 3a71–3(d)(1)(vi)
The ANE Exception is conditioned in
part on the Registered Entity filing with
the Commission an ANE Exception
Notice. Prior to these amendments, Rule
3a71–3(d)(1)(vi) required a Registered
Entity to file the ANE Exception Notice
by submitting it to the electronic
mailbox specified on the Commission’s
website. The Registered Entity could,
but was not required to, withdraw an
ANE Exception Notice by contacting the
Commission to request that the notice
be manually removed from the ANE
Exception Notices web page.
The Commission is amending Rule
3a71–3(d)(1)(vi) to require the ANE
Exception Notices to be filed
electronically through EDGAR, but the
Commission is not changing the
information required in an ANE
Exception Notice. The Commission also
is amending Rule 3a71–3(d)(1)(vi) to: (1)
provide that withdrawals of ANE
Exception Notices shall be made
electronically via EDGAR, and (2)
require a Registered Entity to promptly
withdraw its ANE Exception Notice if it
becomes unregistered or otherwise
ineligible to serve as the Registered
Entity for purposes of the ANE
Exception.
13. Rule 15fi–3(c)
Rule 15fi–3(c) requires an SBS Entity
to promptly notify the Commission, and
any applicable prudential regulator, of
any security–based swap valuation
dispute in excess of $20,000,000 (or its
equivalent in any other currency) if not
resolved within: (1) three business days,
if the dispute is with a counterparty that
is an SBS Entity; or (2) five business
days, if the dispute is with a
counterparty that is not an SBS
Entity.545 Rule 15fi–3(c) also requires
SBS Entities to notify the Commission
and any applicable prudential regulator,
if the amount of any security-based
swap valuation dispute that was the
subject of a previous notice increases or
decreases by more than $20,000,000 (or
its equivalent in any other currency), at
either the transaction or portfolio
level.546
545 See

17 CFR 240.15fi–3(c)(1).
amended notice is required to be
provided to the Commission and any applicable
prudential regulator no later than the last business
day of the calendar month in which the applicable
security-based swap valuation dispute increases or
decreases by the applicable dispute amount. See 17
CFR 240.15fi–3(c)(2).
546 Each

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Prior to the amendments, Rule 15fi–
3(c) required that VDNs be submitted to
the Commission ‘‘in a form and manner
acceptable to the Commission.’’ SBS
Entities had two options for submitting
VDNs: (1) an electronic submission in
PDF format via EDGAR; or (2)
submission in PDF format to a dedicated
Commission email address.
The Commission is amending Rule
15fi–3(c) to affirmatively require SBS
Entities to submit VDNs to the
Commission electronically in EDGAR
using a custom XML-based data
language. This includes both the initial
VDN and any subsequent amendments.
Under these amendments, SBS Entities
will no longer be able to submit VDNs
to the Commission using a dedicated
email address or in PDF format on
EDGAR.
14. Rule 15fk–1(c)(2)(ii)(A)
Rule 15fk–1(c) requires that the CCO
of an SBS Entity prepare and sign a CCO
report. The CCO report must be
submitted to the Commission within 30
days following the filing deadline for
the SBS Entity’s annual financial report
with the Commission.547 Rule 15fk–1(c)
does not specify the manner in which
the CCO report must be submitted.
Accordingly, pursuant to the rule, an
SBS Entity may submit its CCO report
as a paper or electronic submission.
The amendment to Rule 15fk–
1(c)(2)(ii)(A) does not change what the
report must include. Rather, the
amendment requires that the CCO report
be submitted electronically in Inline
XBRL through EDGAR. As with other
entities that make submissions through
EDGAR, these submissions are subject
to the provisions of Regulation S–T and
the EDGAR Filer Manual, as defined in
Rule 11 of Regulation S–T.548
B. Use of Information
1. Form ID
The information required to be filed
electronically on Form ID allows the
Commission staff to review applications
for EDGAR access and, if the application
is approved, assign CIKs (if the
applicant does not already have a CIK)
and provide instructions to generate
EDGAR access codes to permit filing on
EDGAR. Form ID is essential to EDGAR
security.
2. Rules 6a–1, 6a–2, 6a–3, and Form 1
The information required pursuant to
Rules 6a–1, 6a–2, and 6a–3 is necessary
to enable the Commission to receive
accurate and complete information from
applicants seeking registration as
547 17
548 17

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
national securities exchanges or an
exemption from such registration
(‘‘exempt exchanges’’) and from national
securities exchanges and exempt
exchanges, which enables the
Commission to exercise its statutory
oversight functions. Without the
information submitted pursuant to Rule
6a–1 on Form 1, the Commission would
not be able to determine whether the
applicant has met the criteria for
registration (or an exemption from
registration) set forth in section 6 of the
Exchange Act. The amendments,
periodic updates of information,
supplemental materials, and monthly
reports submitted pursuant to Rules 6a–
2 and 6a–3 are necessary to assist the
Commission in its oversight of national
securities exchanges and exempt
exchanges.
3. Rule 6a–4 and Form 1–N
The information obtained under Rule
6a–4 and Form 1–N provides the
Commission with basic information
about Security Futures Product
Exchanges. This information enables the
Commission to carry out its statutorily
mandated oversight functions and helps
ensure that Security Futures Product
Exchanges continue to be in compliance
with the Exchange Act.

ddrumheller on DSK120RN23PROD with RULES2

4. Rules 15aa–1 and 15aa–2; Form 15A
The information required pursuant to
Rule 15aa–1 is necessary to enable the
Commission to receive accurate and
complete information from applicants
seeking registration as national
securities association which would
enable the Commission to exercise its
statutory oversight functions. Without
the information submitted pursuant to
Rule 15aa–1 on Form 15A, the
Commission would not be able to
determine whether the applicant has
met the criteria for registration set forth
in section 15A of the Exchange Act. The
amendments, periodic updates of
information, and supplemental
materials submitted pursuant to Rule
15Aa–2 are necessary to assist the
Commission in its oversight of national
securities associations.
5. Rule 17ab2–1 and Form CA–1
The Commission uses the information
disclosed on Form CA–1 to: (i)
determine whether an applicant for
registration as a clearing agency or for
an exemption from such registration
meets the standards for registration set
forth in the Exchange Act; (ii) enforce
compliance with the Exchange Act’s
registration requirements; and (iii) use
as a reference for specific registered
clearing agencies or exempt clearing
agencies for compliance and

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investigatory purposes. The information
required under Rule 17ab2–1 is
essential for the Commission to perform
its statutorily required duties.
6. Rule 19b–4(e) and Form 19b–4(e)
The information collected pursuant to
Rule 19b–4(e) is designed to maintain
an accurate record of all new derivative
securities products by SROs, the listing
and trading of which are not deemed to
be proposed rule changes. The
Commission reviews compliance with
Rule 19b–4(e) through its routine
inspections of the SROs.
7. Rule 19b–4(j) and Form 19b–4
The information collected pursuant to
Rule 19b–4 is designed to provide the
Commission with the information
necessary to determine, as required by
the Exchange Act, whether the proposed
rule change is consistent with the
Exchange Act and the rules thereunder.
The information is used to determine if
the proposed rule change should be
approved, disapproved, suspended, or if
proceedings should be instituted to
determine whether to approve or
disapprove the proposed rule change.
The Commission reviews compliance
with Rule 19b–4 through its routine
inspections of the SROs. The
Commission is removing a manual
signature requirement in the existing
collection of information under Rule
19b–4 and on Form 19b–4 because it is
unnecessary given the electronic
signature already required by Form 19b–
4.
8. Rule 17a–22
The information required to be posted
on a registered clearing agency’s website
under the amendments to Rule 17a–22
is expected to assist the Commission in
carrying out its statutorily mandated
oversight functions with respect to
clearing agencies. The Commission uses
this information to determine: (i)
whether a clearing agency is
implementing procedural or policy
changes and, if so, whether such
changes are consistent with the
purposes of section 17A of the Exchange
Act; and (ii) whether a clearing agency
has changed its rules without filing the
actual or prospective change to the
Commission as required by section 19(b)
of the Exchange Act. The posting of
such information on a registered
clearing agency’s website would
improve transparency of a clearing
agency’s actions and communications to
a larger group of potentially interested
persons, including non-member entities
that directly or indirectly use the
clearing agency’s services, investors,
and the general public.

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9. Rules 17a–5, 18a–7, and 17a–12
Reports required to be made under
Rules 17a–5, 18a–7, and 17a–12 are
used, among other things, to monitor the
financial and operational condition of
broker-dealers, SBS Entities, and OTC
derivatives dealers by Commission staff
and, to the extent applicable to the
entity, by its designated examining
authority (‘‘DEA’’). The reports required
under Rules 17a–5, 18a–7, and 17a–12
are also one of the primary means of
ensuring compliance with the
Commission’s financial responsibility
rules (e.g., Rule 15c3–1). A firm’s failure
to comply with these rules would
severely impair the ability of the
Commission (and the firm’s DEA, if
applicable) to protect investors,
including customers and counterparties
of the registrant.
10. Rule 17h–2T
The information required to be filed
with the Commission under Rule 17h–
2T is used by the Commission to
monitor the activities of a covered
broker-dealer’s affiliates whose business
activities are reasonably likely to have a
material impact on the financial and
operational condition of the brokerdealer.
11. Rule 17a–19 and Form X–17A–19
Upon the Commission’s receipt of a
Form X–17A–19 filing, the information
is entered into a database, which is
regularly shared with the SROs.
Commission staff use the information
contained in Form X–17A–19 to assign
the appropriate SRO as DEA for the
member firms. This information is also
used by SIPC in determining which SRO
is the collection agent for the SIPC
Fund.
12. Rule 3a71–3(d)(1)(vi)
The information provided by a
Registered Entity in connection with the
filing of an ANE Exception Notice
pursuant to Rule 3a71–3(d)(1)(vi), and
any subsequent withdrawal, assists the
Commission in evaluating market
participants’ compliance with the
limitations on use of the ANE
Exception, as well as assists Relying
Entities and their affiliates in
determining whether they have satisfied
the ANE Exception’s notice requirement
and in monitoring their progress toward
the ANE Exception’s cap on inter-dealer
security-based swaps. The amendment
to Rule 3a71–3(d)(1)(vi) to move the
filing of the ANE Exception Notice, and
any subsequent withdrawal, to the
Commission’s EDGAR filing system
should facilitate more efficient and
timely transmission, dissemination, and
analysis of this information.

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13. Rule 15fi–3(c)
The information shared by
counterparties to a security-based swap
transaction during the portfolio
reconciliation process, as contemplated
by Rule 15fi–3, plays an important role
in assisting those counterparties in
identifying and resolving discrepancies
involving key terms of their transactions
on an ongoing basis. This information
also allows those counterparties to
improve their management of internal
risks related to the enforcement of their
rights and the performance of their
obligations under a security-based swap.
Moreover, requiring SBS Entities to
agree in writing with each of their
counterparties on the terms of the
portfolio reconciliation (including, if
applicable, agreement on the selection
of any third-party service provider who
may be performing the reconciliation)
helps to minimize any discrepancies
regarding the portfolio reconciliation
process itself, thereby facilitating
efficient and cost-effective operation.
The requirement to report certain
unresolved valuation disputes to the
Commission assists the Commission in
identifying potential issues with respect
to an SBS Entity’s internal valuation
methodology and also could serve as an
indication of a widespread market
disruption in cases where the
Commission receives a large number of
such notices from multiple firms. The
amendment to Rule 15fi–3(c) to require
submission of the VDNs using the
Commission’s EDGAR system is
intended to facilitate more efficient and
secure transmission and efficient and
effective analysis of this information.

national securities associations as of
February 15, 2024; 1,498 broker-dealers
as of December 31, 2023; two Security
Futures Product Exchanges as of April
1, 2024; 11 operational registered and
exempt clearing agencies as of April 1,
2024; 549 and 24 Registered Entities.550
2. Rules 6a–1, 6a–2, 6a–3, and Form 1
The respondents to the collection of
information required under Rule 6a–1
are new applicants applying to register
as a national securities exchange or
seeking an exemption from such
registration. The Commission estimates
that it would receive approximately one
initial Form 1 filing per year.
The respondents to the collection of
information required under Rules 6a–2
and 6a–3 are national securities
exchanges and exempt exchanges. As of
February 15, 2024, there are a total of 24
entities registered as national securities
exchanges. These respondents file
annual, triennial, and periodic
amendments to their Form 1 under Rule
6a–2. These respondents also file
supplemental materials and monthly
reports under Rule 6a–3. There are no
exempt exchanges that currently submit
amendments under Rule 6a–2 or
supplemental materials and monthly
reports under Rule 6a–3.
3. Rule 6a–4, Form 1–N

14. Rule 15fk–1(c)(2)(ii)(A)
The information collected under Rule
15fk–1(c) assists the Commission staff’s
oversight and examination of SBS
Entities compliance with the business
conduct requirements for such entities.

The respondents to the collection of
information required under Rule 6a–4
are futures exchanges that trade security
futures products. Currently, there are
two Security Futures Product
Exchanges. These respondents file
annual, triennial, and periodic
amendments to their Form 1–N under
Rule 6a–4(b). These respondents also
file supplemental materials and
monthly reports under Rule 6a–4(c).
The Commission estimates that it will
not receive any initial Form 1–N
filings.551

C. Respondents

4. Rules 15aa–1 and 15aa–2; Form 15A

1. Form ID
The respondents to the collection of
information required under Form ID are
all entities that are required to file
electronically on EDGAR under this
release and that do not already have
access to EDGAR. Such respondents
must submit a Form ID, along with the
notarized signature of an authorized
individual, to obtain an EDGAR
identification number (‘‘CIK’’) and
access codes to file on EDGAR. The
Commission estimates that these
respondents would include the
following entities not currently
registered on EDGAR: 25 national
securities exchanges and registered

The respondents to the collection of
information required under Rule 15aa–
1 are new applicants applying to register
as a national securities association. The
Commission estimates that it would

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549 As of Apr. 1, 2024, there are eight registered
clearing agencies, six of which are operational, and
five exempt clearing agencies.
550 See Cross-Border Adopting Release, 85 FR at
6336 n.642; the Commission continues to estimate
that up to 24 entities that engage in security-based
swap dealing activity may rely on the ANE
Exception.
551 The Commission is basing its estimate on its
historical experience with Form 1–N filings. In
particular, since the adoption of the form in 2001,
six initial Form 1–N filings have been made by
futures exchanges. Based on the infrequent
occurrence of filings, zero is a reasonable estimate.

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receive one initial Form 15A filing per
year.552
The respondents to the collection of
information required under Rule 15aa–
2 are national securities associations
currently registered with the
Commission. Currently, there is only
one entity that will be required to file
annual, triennial, and periodic
amendments to its Form 15A under
Rule 15aa–2.
5. Rule 17ab2–1, Form CA–1
The respondents to the collection of
information required under Rule 17ab2–
1 are registered and exempt clearing
agencies, as well as applicants seeking
to register as a clearing agency or
seeking an exemption from such
registration. As of April 1, 2024, there
are eight registered clearing agencies,
only six of which are operational,553
and five exempt clearing agencies. The
Commission estimates that it would
receive one new Form CA–1 application
filed each year.
6. Rule 19b–4(e), Form 19b–4(e)
The respondents to the collection of
information required under Rule 19b–
4(e) are SROs that list and trade new
derivative securities products—national
securities exchanges. As of February 15,
2024, there are 24 entities registered as
national securities exchanges.
7. Rule 19b–4(j), Form 19b–4
The respondents to the collection of
information required under Rule 19b–
4(j) and Form 19b–4 are SROs (as
defined by section 3(a)(26) of the
Exchange Act), including national
securities exchanges, national securities
associations, registered clearing
agencies, notice registered securities
future product exchanges, and the
MSRB. The Commission’s current
approved estimated number of
respondents is 46 SROs.554
552 The Commission notes that since the adoption
of section 15A of the Exchange Act as part of the
Maloney Act in 1938, only two national securities
associations have registered with the Commission.
Currently, FINRA is the only national securities
association registered with the Commission
whereas the NFA is registered as a national
securities association only for the limited purpose
of regulating the activities of NFA members that are
registered as brokers or dealers in security futures
products under section 15(b)(11) of the Exchange
Act.
553 The Boston Stock Exchange Clearing
Corporation and Stock Clearing Corporation of
Philadelphia are currently registered with the
Commission as clearing agencies but conduct no
clearance or settlement operations. See Exchange
Act Release No. 6329 (Jan. 3, 2011), 76 FR 1473
(Jan. 10, 2011); Exchange Act Release No. 63268
(Nov. 8, 2010), 75 FR 69730 (Nov. 15, 2010).
554 See FR Doc. 2023–01613, 88 FR 5387 (Jan. 27,
2023) (Request to OMB for extension of Rule 19b–
4 and Form 19b–4; SEC File No. 270–38; OMB
Control No. 3235–0045).

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
8. Rule 17a–22
The respondents to the collection of
information required under Rule 17a–22
are registered clearing agencies. As of
April 1, 2024, there are eight registered
clearing agencies, only six of which are
operational.555
9. Rules 17a–5, 18a–7, and 17a–12
The respondents to file the annual
reports required under Rule 17a–5 are
broker-dealers. For the 12 months ended
December 31, 2023, the Commission
received 1,498 broker-dealer annual
reports in paper form and 1,769
electronically via EDGAR. The
Commission therefore estimates that
approximately 3,267 broker-dealers are
required to file annual reports with the
Commission. As of December 31, 2023,
five of those broker-dealers are ANC
broker-dealers required to file
supplemental reports under Rule 17a–5.
The respondents to the annual reports
collection of information required under
Rule 18a–7 are SBS Entities that are not
prudentially regulated. As of June 30,
2024, there are 18 SBS Entities,
including nine foreign firms relying on
substituted compliance, that are not
prudentially regulated. The respondents
to the annual reports collection of
information under Rule 17a–12 are OTC
derivatives dealers. There are three OTC
derivatives dealers subject to Rule 17a–
12 as of December 31, 2023.
There are 486 broker-dealers or nonbroker-dealer SBS Entities that filed
FOCUS Report Part II as of December
31, 2023. Of those Part II filers, 4 firms
are domestic stand-alone swap dealers
and 67 firms are domestic stand-alone
introducing brokers. Bank SBS Entities
file FOCUS Report Part IIC. As of June
30, 2024, there are 30 bank SBS Entities,
including 21 foreign firms relying on
substituted compliance. There are 2,946
broker-dealers that filed FOCUS Report
Part IIA as of December 31, 2023.
10. Rule 17h–2T
The respondents to the collection of
information required under Rule 17h–
2T are broker-dealers. As of December
31, 2023, there are 241 broker-dealers
that must file quarterly and annual risk
assessment reports with the
Commission under Rule 17h–2T.
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11. Rule 17a–19 and Form X–17A–19
The respondents to the collection of
information required under Rule 17a–19
are national securities exchanges and
registered national securities
associations. As of February 15, 2024,
there are a total of 25 national securities
555 See

supra note 560560.

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exchanges and registered national
securities associations.
12. Rule 3a71–3(d)(1)(vi)
The Commission estimates that up to
24 entities that engage in security-based
swap dealing activity may rely on the
ANE Exception.556 To satisfy the ANE
Exception, each of those up to 24
entities will make use of an affiliated
Registered Entity that will be required to
file an ANE Exception Notice and may
subsequently decide to or may be
required to file a withdrawal of the ANE
Exception Notice. The amendment to
Rule 3a71–3(d)(1)(vi) does not affect
Commission’s estimate of the number of
respondents.
13. Rule 15fi–3(c)
The respondents to the collection of
information under Rule 15fi–3(c) are
registered SBS Entities. In the Proposing
Release and a number of prior releases,
including the release adopting the rules
by which SBS Entities can register (and
withdraw from registration) with the
Commission, the Commission estimated
that approximately 50 entities may meet
the definition of SBSD, and up to five
entities may meet the definition of
MSBSP.557 Accordingly, in the
Proposing Release, the Commission
preliminarily estimated that
approximately 55 entities will be
required to register under either
category.558 Since issuing the Proposing
Release, the Commission received three
additional applications for registration
as an SBSD, for a total of 53,559 but
otherwise the Commission continues to
believe that these estimates are
appropriate. Thus, the Commission
estimates that approximately 58 entities
will be required to register with the
556 See Cross-Border Adopting Release, 85 FR at
6336 n.642.
557 See Registration Process for Security-Based
Swap Dealers and Major Security-Based Swap
Participants, Exchange Act Release No. 75611 (Aug.
5, 2015), 80 FR 48964, 48990 (Aug. 14, 2015). See
also Risk Mitigation Adopting Release, 85 FR at
6383; Trade Acknowledgment and Verification of
Security-Based Swap Transactions, Exchange Act
Release No. 78011 (June 8, 2016), 81 FR 39807,
39830 (June 17, 2016); Capital, Margin, and
Segregation Requirements for Security-Based Swap
Dealers and Major Security-Based Swap
Participants and Capital and Segregation
Requirements for Broker-Dealers, Exchange Act
Release No. 86175 (June 21, 2019), 84 FR 43872,
43960 (Aug. 22, 2019).
558 See Proposing Release, 88 FR at 23973–74.
559 See List of Security-Based Swap Dealers and
Major Security-Based Swap Participants, available
at https://www.sec.gov/tm/List-of-SBS-Dealers-andMajor-SBS-Participants. The respondent registered
SBSDs include 21 SBSDs that, as of June 21, 2024,
notified the Commission of their intent to rely on
substituted compliance with respect to one more
Exchange Act rules pursuant to a Commission order
granting substituted compliance. See https://
www.sec.gov/tm/Substituted-compliance-Notices.

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7313

Commission under either category, and
will therefore be subject to Rule 15fi–3.
When the Commission initially adopted
Rule 15fi–3, it stated that, until SBS
Entities were registered with the
Commission, it was difficult for the
Commission to determine the typical
number of valuation disputes meeting
the applicable thresholds that SBS
Entities would be required to submit on
an annual basis.560 Because SBS Entities
have been required to submit VDNs
under Rule 15fi–3(c) for a limited time,
it remains difficult for the Commission
to determine the typical number of
VDNs that an SBS Entity will submit
annually.
14. Rule 15fk–1(c)(2)(ii)(A)
The respondents to the collection of
information under Rule 15fk–1(c) are
registered SBS Entities. As of June 21,
2024, there were 53 SBS Entities
registered with the Commission.561 Of
these entities, the Commission estimates
that none will be first-time EDGAR
users needing to obtain EDGAR access
credentials in order to submit its CCO
report because they have already
registered as SBS Entities through
EDGAR.
D. Total Initial and Annual Reporting
and Recordkeeping Burdens
1. Form ID
Currently Approved Burden Estimate
Form ID (OMB Control No. 3235–
0328) must be completed and filed with
the Commission by all individuals,
companies, and other organizations who
seek access to file electronically on
EDGAR. Accordingly, a filer that does
not already have access to EDGAR must
submit a Form ID, along with the
notarized signature of an authorized
individual, to obtain an EDGAR
identification number (‘‘CIK’’) and
access codes to file on EDGAR. The
Commission currently estimates that
Form ID would take 0.30 hours to
prepare, resulting in an annual industrywide burden of 17,199 hours.562
Revision to Burden Estimate
The Commission estimates that each
filer that currently does not have access
to EDGAR would incur an initial, onetime burden of 0.30 hours to complete
560 See Risk Mitigation Adopting Release 85 FR at
6385–86.
561 There are currently no MSBSPs registered
with the Commission.
562 See Supporting Statement for the Paperwork
Reduction Act Information Collection Submission
for Form ID (Dec. 20 2021), available at https://
www.reginfo.gov/public/do/PRAViewDocument?
ref_nbr=202112-3235-0328.

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

and submit a Form ID.563 Therefore, the
one-time industrywide reporting burden
associated with the requirements to file
on EDGAR pursuant to this release is 7.5
hours for national securities exchanges
and registered national securities
associations; 564 0.6 hours for security
futures product exchanges; 565 3.3 hours
for registered and exempt clearing
agencies; 566 449.4 hours for brokerdealers not already filing their annual
audits on EDGAR; 567 0 hours for OTC
derivatives dealers not already filing
their annual audits on EDGAR; 568 and
7.2 hours for Registered Entities.569
2. Rules 6a–1, 6a–2, 6a–3 and Form 1

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Currently Approved Burden Estimate 570
Initial filings on Form 1 by applicants
seeking registration as a national
securities exchange or an exemption
from such registration are made on a
one-time basis. The Commission
estimates that it would receive
approximately one initial Form 1 filing
per year. The Commission also
estimates that each respondent who
submits an initial Form 1 filing would
incur an average burden of 880 hours to
complete and file an initial Form 1.571
With respect to amendments to Form 1,
the Commission estimates that each
registered or exempt exchange would
file 11 amendments or periodic updates
563 The Commission does not estimate a burden
for SBS Entities since these firms have already filed
Form ID so they can file Form SBSE on EDGAR.
564 0.30 hours × 25 national securities exchanges
and registered national securities associations = 7.5
hours.
565 0.30 hours × 2 security futures product
exchanges = 0.6 hours.
566 0.30 hours × 11 operational registered and
exempt clearing agencies = 3.3 hours.
567 0.30 hours × 1,498 broker-dealers not already
filing on EDGAR = 449.4 hours.
568 0.30 hours × 0 OTC derivatives dealers not
already filing on EDGAR = 0 hours.
569 0.30 hours × 24 Registered Entities = 7.2
hours. The Commission conservatively estimates
that none of the Registered Entities will have
EDGAR access at the time of filing an ANE
Exception Notice or withdrawing an ANE Exception
Notice, even though most, if not all, Registered
Entities will have accessed EDGAR to file other
information with the Commission. A Registered
Entity that is an SBSD must file its application for
registration electronically on EDGAR, and this
requirement has been in place from the original
compliance date for registration of SBSDs. See 17
CFR 240.15Fb2–1(c). Additionally, pursuant to
amendments being adopted in this release, a
Registered Entity that is a broker will be required
to file electronically on EDGAR certain annual
reports, and many brokers already do so voluntarily
under existing Commission rules. See infra Sections
VIII and XI.B.
570 For an explanation of the collection of
information under these rules and Form 1, see
supra section IX.A.2.
571 See FR Doc. 2022–01616, 87 FR 4297 (Jan. 27,
2022) (Submission for OMB Review; Comment
Request, Extension: Rules 6a–1 and 6a–2, Form 1;
SEC File 270–0017; OMB Control No. 3235–0017)
(hereinafter ‘‘Rules 6a–1 and 6a–2 PRA Update’’).

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20:42 Jan 18, 2025

Jkt 265001

to Form 1 per year.572 Hours required
for amendments to Form 1 that must be
submitted to the Commission can vary,
depending upon the nature and extent
of the amendment, the exchange’s
corporate structure, and the exchange’s
business activities. The Commission
estimates that each exchange would
incur an average burden of 25 hours per
filing to comply with Rule 6a–2.573
Accordingly, the estimated average
annual burden to update and amend
Form 1 is 275 hours per exchange 574
and the estimated aggregate annual
burden for all national securities
exchanges is 6,600 hours.575
With respect to supplemental
information and monthly reports, the
Commission estimates that each
exchange would file such materials 12
times per year. The Commission
estimates that each exchange would
incur an average burden of 0.5 hours per
filing to comply with Rule 6a–3.576
Accordingly, the estimated average
annual burden to submit supplemental
information and monthly reports is six
hours per exchange 577 and the
estimated aggregate annual burden for
all exchanges is 144 hours.578 Thus, the
Commission estimates that the total
aggregate annual burden to comply with
Rules 6a–2 and 6a–3 is 6,744 hours.579
Revision to Burden Estimate
The Commission recognizes that the
amendments to Rules 6a–1, 6a–2, and
6a–3 impose certain burdens on
respondents. Although the information
to be provided on filings made pursuant
to Rules 6a–1, 6a–2, and 6a–3 will not
change, respondents will be required to
submit documents electronically. The
instructions to Form 1 will be amended
to no longer require respondents to
make and submit multiple copies of the
Form 1 submission. Currently,
respondents must make two copies of
each filing to be submitted pursuant to
Rules 6a–1 and 6a–2. Generally, the
time spent making such copies instead
is expected to be spent uploading
572 See

Rules 6a–1 and 6a–2 PRA Update.
Rules 6a–1 and 6a–2 PRA Update.
574 11 Form 1 Amendments annually × 25 burden
hours per Form 1 Amendment = 275 burden hours
per exchange.
575 275 burden hours per exchange × 24 national
securities exchanges = 6,660 aggregate burden
hours.
576 See FR Doc. 2022–07060, 87 FR 19541 (Apr.
4, 2022) (Submission for OMB Review; Comment
Request; Extension: Rule 6a–3; SEC File 270–0015;
OMB Control No. 3235–0021).
577 12 filings annually × 0.5 hours per filing = 6
burden hours per exchange.
578 6 burden hours per exchange × 24 national
securities exchanges = 144 aggregate burden hours.
579 6,600 burden hours to comply with Rule 6a–
2 + 144 burden hours to comply with Rule 6a–3 =
6,744 aggregate burden hours.
573 See

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documents on EDGAR. Where a filing
could include multiple exhibits, the
time required to upload documents
should be less than the time required to
make two copies of each exhibit,
particularly when the exhibit contains
numerous pages. Accordingly, the
Commission estimates that, on average,
filing an initial Form 1 application
electronically will require two fewer
hours of clerical work from the current
baseline. The aggregate initial burden on
all respondents submitting an initial
Form 1 application electronically will
be two hours less than the current
baseline. Accordingly, the aggregate
initial burden on all respondents to
complete and submit an initial Form 1
application is expected to be 878
hours.580 In addition, the Commission
estimates that, on average, filing
amendments to Form 1 electronically
will require 1 fewer hour of clerical
work from the current baseline, as the
amount of material filed pursuant to
Rule 6a–2 may be less than an initial
Form 1 application. The aggregate
ongoing burden on all exchanges
submitting a periodic amendment
electronically will be 264 hours less
than the current baseline.581
Accordingly, the aggregate ongoing
burden on all exchanges to submit
periodic amendments to Form 1
electronically is expected to be 6,336
hours.582
With respect to material filed under
Rule 6a–3, while in some instances
there may be a marginal reduction in
burden hours associated with
submitting these materials electronically
as a result of a reduction in printing
requirements, for purposes of making a
PRA burden estimate on average, the
most recently approved baseline is
expected to represent a reasonable
estimate of the burden hours associated
with submitting supplemental
information and monthly reports. The
time required to compile copies of these
materials is expected, on average, to be
equivalent to the time required to
upload those filings electronically. The
Commission estimates that, on average,
filing supplemental information and
monthly reports electronically will not
increase or decrease burden hours from
the current baseline of 0.5 hours.
Therefore, the aggregate burden
associated with filing supplemental
information and monthly reports will be
580 878 burden hours per initial application × 1
initial application per year = 878 burden hours.
581 Reduction of 1 hour per response × 264
responses per year = 264 fewer burden hours.
582 264 burden hours per exchange × 24 national
securities exchanges = 6,336 aggregate burden
hours.

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Rule 6a- l (Initial
Form 1 A lication
Rule 6a-2(b) (Annual
Form 1 Amendments
Rule 6a-2(a) and 6a2(c) (Periodic Form 1
Amendments
Rule 6a-3
(Supplemental
Materials and
Monthly Volume
Re arts

Periodic
Re ortin

24

Periodic
Reporting

24

Periodic
Reporting

24

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Rule 6a-1 (Initial Form 1
A lication
Rule 6a-2(b) (Annual Form 1
Amendments

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20:42 Jan 18, 2025

0

0

40

40

40

960

10

0

0

26

26

260

6,240

15

0

0

.5

.5

7.5

180

TOTAL HOURLY BURDENS FOR ALL RESPONDENTS

8 281

$5,000

$5,000

$5,000

$120,000

TOTAL AGGREGATE COST FOR ALL RESPONDENTS

$125000

Initial Reporting
Periodic Reporting

583 0.5 burden hours × 360 responses per year =
180 burden hours.
584 7,032 burden hours to comply with Rule 6a–
2 + 180 burden hours to comply with Rule 6a–3 =
7,212 aggregate burden hours.
585 See infra section X.C.2.b. As explained further
in the discussion of structured data costs, the
Commission is now estimating that only half of
affiliated respondents (i.e., 8 out of the 17 affiliated
exchanges) will experience reduced burdens, and is
therefore increasing the burden estimates for Inline
XBRL tagging of Form 1 and annual amendments
thereto compared to the proposal.
586 20 burden hours to tag Exhibits D, E (in part),
and I in initial Form 1 in Inline XBRL × 1 response
per year = 20 burden hours. 14 burden hours to tag
financial statements in annual amendments to Form
1 in Inline XBRL × 24 responses per year = 336
burden hours.
587 $5,000 per year × (24 exchanges + 1 exchange
filing an initial Form 1 application) = $125,000. See

Jkt 265001

disclosures on Form 1 in a custom XML
data language would impose burdens on
respondents.588 The Commission
estimates respondents will incur an
average of 3 burden hours to structure
disclosures in initial Form 1 filings in
custom XML (a total annual
industrywide burden of 3 hours), and an
average of 2 burden hours to structure
disclosures in subsequent Form 1 filings
in custom XML (a total annual
industrywide burden of 528 hours).589
To summarize, the current estimated
annual burden to submit filings
pursuant to Rules 6a–1, 6a–2, and 6a–
3 is 7,624 hours.590 The Commission
estimates that the annual burden to
submit these filings will be 8,281
hours.591 In addition, the Commission
estimates that the total annual industrywide external cost of the Inline XBRL
requirements related to Form 1 will be
$125,000.592

compliance software and experience of
their reporting affiliates.585
The Commission estimates
respondents will incur an average of 20
burden hours to tag the initial Form 1
in Inline XBRL (a total annual industrywide burden of 20 hours), and an
average of 14 burden hours to tag
financial statements included in annual
amendments to Form 1 in Inline XBRL
(a total annual industry-wide burden of
336 hours).586 With respect to the
external monetary costs (e.g., the costs
of purchasing and renewing the
necessary software to tag filings in
Inline XBRL) that are incurred in
addition to the internal time burden, the
Commission estimates an annual
average cost of $5,000 to tag Form 1
(including initial and subsequent
filings) in Inline XBRL (a total annual
industry-wide cost of $125,000).587
The Commission also recognizes the
requirement to structure certain other

24

infra section X.C.2.b for further detail on structured
data (Inline XBRL and custom XML) compliance
costs, including estimated cost ranges and factors
underlying expected variance in structured data
costs across different filers. We have accounted for
this expected variance in the calculations of average
burden and cost figures presented in this section.
588 This does not include the monthly volume
reports that exchanges must file under Rule 6a–3(b)
of the Exchange Act, as we assume exchanges
would file those disclosures, which comprise a very
limited number of data points, using a fillable form
that EDGAR would convert to custom XML. See 17
CFR 240.6a–3(b).
589 3 burden hours to structure disclosures in
initial Form 1 filings in custom XML × 1 response
per year = 3 burden hours. 2 burden hours to
structure disclosures in subsequent Form 1 filings
in custom XML × 264 responses per year = 528
burden hours. Our estimates assume exchanges
would choose to encode the disclosures in the

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Exhibits to Form 1 in custom XML and submit the
custom XML documents directly to EDGAR, rather
than manually completing fillable EDGAR forms to
be converted into custom XML documents. See
infra section X.C.2.b.
590 880 burden hours for Rule 6a–1 + 6,600
burden hours for Rule 6a–2 + 144 burden hours for
Rule 6a–3 = 7,624 burden hours.
591 901 burden hours for Rule 6a–1 (878 burden
hours to file electronically + 20 burden hours to tag
in Inline XBRL + 3 burden hours to tag in custom
XML) + 7,200 burden hours for Rule 6a–2 (6,336
burden hours to file electronically + 336 burden
hours to tag Exhibits in Inline XBRL + 528 burden
hours to structure Exhibits in custom XML) + 180
burden hours for Rule 6a–3 = 8,281 burden hours.
592 $5,000 industry-wide cost for Rule 6a–1 (to tag
in Inline XBRL an initial Form 1 filing) + $120,000
industry-wide cost for Rule 6a–2 (to tag in Inline
XBRL periodic updates to Form 1) = $125,000.

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ER21JA25.016

180 hours.583 Thus, the total aggregate
annual burden to comply with Rules
6a–2 and 6a–3 will be 7,212 hours.584
The Commission also recognizes that
the requirement to tag certain
disclosures (specifically, the financial
statements and the manner of operations
description) on the initial Form 1 in
Inline XBRL would impose burdens on
respondents. To file reports in Inline
XBRL, a filer must purchase Inline
XBRL tagging software to apply Inline
XBRL tags to the reports before filing
them on EDGAR, or employ a tagging
service provider to apply the Inline
XBRL tags on its behalf. As discussed in
further detail below, this burden will be
mitigated for some exchanges that are
affiliated with public reporting
companies subject to existing Inline
XBRL structuring requirements, and
thus may be able to leverage the

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

3. Rule 6a–4, Form 1–N
Currently Approved Burden

Estimate 593

Initial filings on Form 1–N by futures
exchanges submitting notice registration
as a national securities exchange solely
for the purpose of trading security
futures products are made on a one-time
basis. The Commission estimates that it
would receive zero initial Form 1–N
filings per year.594 The Commission
estimates that the total burden for all
respondents to file initial Form 1–N
filings per year would be 0 hours (31
hours/respondent/year × 0 respondents).
The Commission estimates that the total
annual burden for all respondents to
provide periodic amendments 595 to
keep the Form 1–N accurate and up to
date as required under Rule 6a–4(b)(1)
would be 30 hours (15 hours/
respondent per year × 2 respondents).
The Commission estimates that the total
annual burden for all respondents to
provide annual amendments under Rule
6a–4(b)(3) would be 30 hours (15 hours/
respondent/year × 2 respondents). The
Commission estimates that the total
annual burden for all respondents to
provide triennial amendments 596 under
Rule 6a–4(b)(4) would be 13 hours (20
hours/response × 2 responses every
three years). The Commission estimates
that the total annual burden for the
filing of the supplemental
information 597 and the monthly reports
required under Rule 6a–4(c) would be
12 hours (6 hours/respondent per year
× 2 respondents). Thus, the Commission
estimates the total annual burden for
complying with Rule 6a–4 is 86 hours.
Revision to Burden Estimate
The Commission recognizes that the
amendments to Rule 6a–4 impose
certain burdens on respondents.

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593 For an explanation of the collection of
information under Rule 6a–4 and Form 1–N, see
supra section IX.A.3.
594 The Commission is basing its estimate on its
historical experience with Form 1–N filings. In
particular, since the adoption of the form in 2001,
six initial Form 1–N filings have been made by
futures exchanges. Based on the infrequent
occurrence of filings, zero is a reasonable estimate.
595 17 CFR 240.6a–4(b)(1).
596 17 CFR 240.6a–4(b)(3) and (4).
597 17 CFR 240.6a–4(c).

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Although the information to be
provided on filings made pursuant to
Rule 6a–4 will not change, respondents
will be required to submit documents
electronically. The instructions to Form
1–N are amended to no longer require
respondents to make and submit
multiple copies of the Form 1–N
submission. Currently, respondents
must make two copies of each filing in
addition to the original Form 1–N to be
submitted pursuant to Rule 6a–4.
Generally, the time spent making such
copies instead will be spent uploading
documents through EDGAR. Where a
filing could include multiple exhibits,
generally, the time required to upload
documents will be less than the time
required to make two copies of each
exhibit, particularly when the exhibit
contains numerous pages.
The Commission estimates that, on
average, filing an initial Form 1–N filing
electronically will require, generally,
two fewer hours of clerical work from
the current baseline. Therefore, instead
of 31 hours, an initial filing will require
29 hours. However, because the
Commission estimates that there will be
zero respondents submitting initial
filings, the burden would remain zero
hours (29 hours/respondent/year × 0
respondents/year).
The Commission estimates that, on
average, periodic amendments to Form
1–N electronically will require 1 fewer
hour of clerical work from the current
baseline. The aggregate ongoing burden
on all respondents submitting periodic
amendments electronically will be two
hours fewer than the current baseline.
Accordingly, the Commission estimates
that the aggregate burden on all
respondents to submit periodic
amendments to Form 1–N will be 28
hours (14 hours/respondent/year × 2
respondents).
Similarly, the Commission estimates
that, on average filing annual
amendments to Form 1–N electronically
will require 1 fewer hour of clerical
work from the current baseline. The
aggregate burden on all respondents
submitting annual amendments
electronically will be two hours fewer
than the current baseline. Accordingly,
the Commission estimates that the

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Sfmt 4700

aggregate burden on all respondents to
provide annual amendments to Form 1–
N will be 28 hours (14 hours/
respondent/year × 2 respondents).
The Commission estimates that, on
average, filing triennial amendments to
Form 1–N will require 1 fewer hour of
clerical work from the current baseline.
Accordingly, the Commission estimates
that the total annual burden for all
respondents to provide triennial
amendments to Form 1–N will be 13
hours 598 (19 hours/response × 2
respondents per year × .33 responses per
year).
With respect to supplemental material
filed under Rule 6a–4, while in some
instances there may be a marginal
reduction in burden hours associated
with submitting these materials
electronically as a result of a reduction
in printing requirements, for purposes
of making a PRA burden estimate, on
average, the most recently approved
baseline is expected to represent an
appropriate estimate of the burden
hours associated with submitting
supplemental information and monthly
reports. The time required to compile
copies of these materials would, on
average, be equivalent to the time
required to upload those filings
electronically. The Commission
estimates that, on average, filing
supplemental information and monthly
reports electronically will not increase
or decrease burden hours from the
current baseline of six hours/
respondent/year. Accordingly, the
aggregate burden associated with filing
supplemental information and monthly
reports will continue to be 12 hours.
Thus, the total aggregate annual burden
to comply with Rule 6a–4 will be 81
hours.599
598 Even with the one hour per response
reduction, the annual total burden would still be 13
hours due to rounding. The annual burden will be
reduced from 13.33 to 12.67, which both round to
13 hours.
599 The Commission currently estimates that
compliance with Form 1–N and Rule 6a–4 results
in $304 of annual clerical costs (i.e., mailing forms
and copying forms etc.). The Commission estimates
that these costs will be eliminated with the
electronic filing of Form 1–N.

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Periodic
Reporting

2

0

0

14

14

14

28

Periodic
Reporting

2

0

0

14

14

14

28

Periodic
Reporting

2

.333

0

0

19

19

6.33

12.66

Periodic
Reporting

2

12

0

0

.5

.5

6

12

TOTAL HOURLY BURDEN FOR ALL RESPONDENTS

80.66

Currently Approved Burden Estimate
As is noted above, due to the length
of time since Control Nos. 3235–0030
and 3235–0044 were last active, there
are no currently approved burdens for
Rules 15Aa–1 and 15Aj–1 (redesignated
as Rules 15aa–1 and 15aa–2,
respectively) and Form 15A.600
Revision to Burden Estimate
Initial filings on new Form 15A by an
applicant seeking registration as a
national securities association are made
on a one-time basis.601 The Commission
estimates that it will receive one initial
Form 15A filing per year.602 Because the
filing of an initial Form 15A is expected

Rule 15aa-1 (Initial
Form 15A
A lication
Rule 15aa-2 (Annual
Form 15A
Amendments

Initial
Reporting
Periodic
Reporting

600 See

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21:43 Jan 18, 2025

Jkt 265001

878

0

878

878

878

0

0

24

24

264

264

TOTAL HOURLY BURDEN FOR ALL RESPONDENTS

1,142

reduction of 2 burden hours per respondent). See
supra section IX.D.2.
604 The requirements of Rule 15aa–2 are
substantively similar to the requirements of Rules
6a–1 and 6a–2. As a result, the Commission relies
on the past history of amendments and periodic
updates submitted under those rules in determining
its estimate of the number of amendments the
Commission will receive under Rule 15A. The
Commission estimates that each registered or
exempt exchange will file 11 amendments or
periodic updates to Form 1 per year.
605 Attorney at 10 hours + Accountant at 10 hours
+ Compliance Clerk at 4 hours = 24 burden hours.
The instructions to Form 15A will be amended to
no longer require respondents to make and submit
multiple copies of the Form 15A submission.
Currently, respondents must make two copies of
each filing to be submitted pursuant to Rule 15Aa–

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Frm 00069

periodic updates to Form 15A per
year.604 The number of hours required
for amendments to Form 15A (that must
be submitted to the Commission) can
vary depending upon the nature and
extent of the amendment, the
association’s corporate structure, and
the association’s business activities. The
Commission estimates that an
association will incur an average burden
of 24 hours per filing to comply with
Rule 15aa–2.605 Accordingly, the
estimated average annual burden to
update and amend Form 15A is 264
hours per association 606 for an
estimated aggregate annual burden for
all national securities associations of
264 hours.607

878

11

supra note 501.
an explanation of the collection of
information under Rules 15Aa–1 and 15Aj–1 that
are being redesignated as Rules 15aa–1 and 15aa–
2 and Forms X–15AA–1, X–15AJ–1, and X–15AJ–
2 that are being redesignated as Form 15A, see
supra section IX.A.4.
602 See Exchange Act Rule 15aa–1, 17 CFR
240.15aa–1 and 17 CFR 249.801.
603 See FR Doc. 2019–04007, 84 FR 8138 (Mar. 6,
2019) (Request to OMB for Extension of Rule 6a–
1, Rule 6a–2 and Form 1; SEC File 270–0017; OMB
Control No. 3235–0017) (hereinafter ‘‘Rules 6a–1
and 6a–2 PRA Update’’). The Commission currently
estimates that an initial Form 1 filing would incur
an average burden of 880 hours, less the efficiencies
contemplated in this release that no longer require
the submission of duplicate paper copies (a
601 For

VerDate Sep<11>2014

to be substantially similar to an initial
Form 1 filing, the Commission estimates
that each respondent will incur an
average burden of 878 hours to complete
and file an initial Form 15A.603
Based on the number of applications
for registration as a national securities
association the Commission has
received, the Commission estimates that
it will receive not more than one initial
Form 15A filing per year. The
Commission estimates that a respondent
will incur an average burden of 878
hours to file an initial Form 15A.
With respect to the amendments to
new Form 15A, the Commission
estimates that each registered
association will file 11 amendments or

Fmt 4701

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1 and 15Aaj–1. The time spent making such copies
instead is expected to be spent uploading
documents through EDGAR. Where a filing could
include multiple exhibits, the time required to
upload documents is expected to be less than the
time required to make two copies of each exhibit,
particularly when the exhibit contains numerous
pages. The Commission estimates that, on average,
filing amendments to Form 15A electronically will
require 1 fewer hour of clerical work compared to
the submission of physical copies as contained in
the most recent PRA updates for Rule 6a–1 and 6a–
2.
606 11 Form 15Aa–2 amendments annually × 24
burden hours per Form 15A amendment = 264
burden hours per association.
607 264 burden hours per association × 1 national
securities association = 264 aggregate burden hours.

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ER21JA25.018

4. Rules 15aa–1 and 15aa–2; Form 15A

ER21JA25.017

Rule 6a-4(b )(!)
(Periodic Form 1-N
Amendments
Rule 6a-4(b )(3)
(Annual Form 1-N
Amendments
Rule 6a-4(b)(4) (3Year Form 1-N
Amendments
Rule 6a-4(c)
(Supplemental Form
1-N Amendments

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5. Rule 17ab2–1, Form CA–1

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Currently Approved Burden Estimate
The Commission has previously
discussed the requirements of Rule
17ab2–1 and Form CA–1 above in
IX.A.5.
The Commission estimates that, on
average, each initial Form CA–1
requires approximately 340 hours to
complete and submit for approval, and
that, on average, the Commission
receives one application each year.608
This burden is composed primarily of a
one-time reporting burden that reflects
the applicant’s staff time to prepare and
submit the Form CA–1 to the
Commission.609 With respect to
amendments to Form CA–1, the
Commission estimates that, on average,
an amendment requires 60 hours of the
exempt or registered clearing agency’s
staff time,610 although the time burden
related to preparing and submitting an
amendment widely varies depending on
the nature of the information that needs
to be updated. The Commission
estimates that, on average, it receives
one amendment per year. Accordingly,
the Commission estimates that the
aggregate annual burden associated with
compliance with Rule 17ab2–1 and
Form CA–1 is 400 hours.
Revision to Burden Estimate
The Commission recognizes that the
amendments to Rule 17ab2–1 impose
certain burdens on respondents.
Although the information to be
provided on filings made pursuant to
Rule 17ab2–1 would not change,
respondents would be required to
submit documents electronically. The
instructions to Form CA–1 would be
amended to no longer require
respondents to make and submit
multiple copies of the same form.
Currently, respondents must make four
copies of Form CA–1. The time spent
making such copies is expected to now
be spent uploading documents through
EDGAR. Where a filing may include
multiple exhibits, the time required to
upload documents is expected to be
slightly less than the time required to
make copies of each exhibit. As the
number of exhibits required to be
submitted with Form CA–1 is roughly
equivalent to the number of exhibits
required by an initial Form 1
application, the overall burden is
608 See FR Doc. 2020–18498, 85 FR 52178 (Aug.
24, 2020) (Request to OMB for Extension of Rule
17Ab2–1 and Form CA–1; SEC File No. 270–203;
OMB Control No. 3235–0195).
609 Compliance Attorney at 300 hours + Chief
Compliance Officer at 40 hours = 340 burden hours.
610 Compliance Attorney at 40 hours + Chief
Compliance Officer at 20 hours = 60 burden hours.

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expected to be two hours less (for either
an initial application or an amendment)
to make an electronic filing, compared
to making the paper copies. Thus, the
aggregate annual burden associated with
compliance with Rule 17ab2–1 and
Form CA–1, other than the structuring
requirement discussed below, is
expected to be approximately 396 hours.
The Commission also recognizes that
the requirement to file Form CA–1 in
Inline XBRL (in part) and in custom
XML (in part) would impose burdens on
respondents.611 The Commission
estimates respondents would incur an
average of 18 burden hours to structure
financial statements and narrative
disclosures in initial applications on
Form CA–1 in Inline XBRL (resulting in
a total annual industry-wide burden of
18 hours) and an average of 12 burden
hours to structure financial statements
and narrative disclosures in subsequent
amendments on Form CA–1 in Inline
XBRL (resulting in a total annual
industry-wide burden of 12 hours).612
The Commission further estimates
respondents would incur average
annual external monetary costs (e.g., the
cost of purchasing and renewing the
necessary Inline XBRL tagging software)
of $3,500 to structure financial
statements and narrative disclosures
included in Form CA–1 in Inline XBRL
(resulting in a total annual industrywide burden of an average of $3,500).613
The Commission estimates respondents
would incur an average of 3 burden
hours to structure other disclosures in
initial applications on Form CA–1 in a
custom XML data language (resulting in
a total annual industry-wide burden of
3 hours) and an average of 2 burden
hours to structure those disclosures in
subsequent amendments on Form CA–1
in custom XML (resulting in a total
annual industry-wide burden of 2
hours).614 The structured data
611 The amendments would require Schedule A
and Exhibits C, F, H, J, K, L, M, O, R, and S of Form
CA–1 to be structured in Inline XBRL, and would
require the execution page and Exhibits A (in part),
B, D, E (in part), I, N, and Q to be structured in
custom XML. See supra section II.D.5; see also
supra section VII.A.
612 18 hours per initial application × 1 initial
application per year = 18 aggregate burden hours.
12 hours per subsequent amendment × 1
subsequent amendment per year = 12 aggregate
burden hours.
613 $3,500 per initial application × 1 initial
application per year = $3,500 aggregate cost per
year. $3,500 per subsequent amendment × 1
subsequent amendment per year = $3,500 aggregate
cost per year.
614 3 hours per initial application × 1 initial
application per year = 3 aggregate burden hours per
year. 2 hours per subsequent amendment × 1
subsequent amendment per year = 2 aggregate
burden hours per year. Our estimates assume
clearing agencies would choose to encode their
disclosures in custom XML and submit the custom

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requirements for Form CA–1 would thus
entail an estimated total annual
industry-wide burden of 21 burden
hours and $3,500 in external monetary
costs for initial applications, and an
estimated total annual industry-wide
burden of 14 burden hours and $3,500
in external monetary costs for
subsequent amendments.615
6. Rule 19b–4(e), Form 19b–4(e)
Currently Approved Burden Estimate
The Commission’s currently approved
estimate to complete and submit one
Form 19b–4(e) is 1 hour, for an
aggregate annual burden of 2,331
hours.616
Revision to Burden Estimate
The amendment to Rule 19b–4(e)
rescinding Form 19b–4(e) and instead
requiring an SRO to publicly report the
information currently provided in
Forms 19b–4(e) on its internet website
will impose certain burdens on
respondents. Respondents will be
required to use the most recent versions
of the XML schema (i.e., data language)
and the associated PDF renderer as
published on the Commission’s website
to post the information required under
Rule 19b–4(e) for each new derivative
securities product. Currently,
respondents must make nine copies of
Form 19b–4(e); however, the form
consists of a single page and does not
require respondents to submit exhibits.
In some instances, there may be a
marginal change in burden hours
associated with posting the same
XML documents directly to EDGAR, rather than
manually completing fillable EDGAR forms to be
converted into custom XML documents. See infra
section X.C.2.b. Consistent with burden estimates in
prior Commission releases, the burden estimates
here assume Inline XBRL tagging would be done by
a compliance attorney, while custom XML
structuring would be done by a programmer. See
Shortening the Securities Transaction Settlement
Cycle, Release No. 34–94196 (Feb. 9, 2022), 87 FR
10436, 10491 (Feb. 24, 2022); Money Market Fund
Reforms, Release No. IC–34441 (Dec. 15, 2021), 87
FR 7248, 7332 (Feb. 8, 2022).
615 18 hours and $3,500 for Inline XBRL
structuring + 3 hours for custom XML structuring
= 21 hours and $3,500 per initial application) × 1
initial application per year = 21 aggregate burden
hours per year and $3,500 in aggregate external
monetary cost per year. 12 hours and $3,500 for
Inline XBRL structuring + 2 hours for custom XML
structuring per subsequent amendment = 14 hours
and $3,500 per subsequent amendment × 1
subsequent amendment per year = 14 aggregate
burden hours per year and $3,500 in aggregate
external monetary cost per year. See infra section
X.C.2.b for further detail on structured data (Inline
XBRL and custom XML) compliance costs,
including estimated cost ranges and factors
underlying expected variance in structured data
costs across different filers.
616 See FR Doc. 2022–17308, 87 FR 49894 (Aug.
12, 2022) (Request to OMB for extension of Rule
19b–4(e) and Form 19b–4(e); SEC File No. 270–447;
OMB Control No. 3235–0504).

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Reporting

24

Reporting

24

97

0.5

0.5

0

0

burden will be 12 hours, and the total
annual hour burden will continue to be
2,331 hours per year associated with the
structuring, rendering, and posting of
information under Rule 19b–4(e).617 The
Commission does not estimate
respondents will incur external
monetary costs under Rule 19b–4(e).

0

0

0.5

12

97

33

2,331

TOTAL HOURLY BURDEN FOR ALL RESPONDENTS

7. Rule 19b–4(j), Form 19b–4

Revision to Burden Estimate

Currently Approved Burden Estimate

The Commission estimates that, on
average, the removal of the manual
signature and retention requirement will
not increase or decrease the burden
hours associated with continuing to file
Form 19b–4 electronically because the

manual signature and retention
requirement is only a small component
of the filing requirement. Accordingly,
the Commission estimates that the
ongoing aggregate burden for SROs
associated with complying with Rule
19b–4 and filing Form 19b–4 will
continue to be 69,259 hours.619

The Commission estimates that it
receives, on average, approximately 840
filings per year pursuant to Rule 17a–
22.621 Although the frequency of filings
made by registered clearing agencies
pursuant to Rule 17a–22 varies, the

Commission estimates that, on average,
each registered clearing agency submits
approximately 120 filings per year.622
The Commission estimates that, on
average, each filing requires
approximately 0.25 hours (fifteen
minutes).623 This figure represents the
time it takes for a staff person at a
registered clearing agency to: (i)

properly identify a document subject to
the rule; (ii) print and make copies of
the document; and (iii) mail the copies
to the Commission and, where
applicable, the ARA.624 Accordingly,
the Commission estimates that the
aggregate annual burden to comply with
Rule 17a–22 is 210 hours.625 Further,
the Commission estimates that each

617 0.5 burden hours per first response for
structuring, rendering, and posting × 24
respondents) = 12 hours. 1 burden hour per
response for structuring, rendering, and posting in
subsequent years × 2,331 responses) = 2,331 hours.
See also infra Section X.C.2.b, (discussing estimated
cost ranges related to the structuring requirement
for Rule 19b–4(e) information). Consistent with
structured data burden estimates in prior
Commission releases, the burden estimates here
assume the custom XML structuring will be done
by a programmer. See supra section IX.D.5.
618 See FR Doc. 2023–01613, 88 FR 5387 (Jan. 27,
2023) (Request to OMB for extension of Rule 19b–
4 and Form 19b–4; SEC File No. 270–38; OMB
Control No. 3235–0045).

619 See id. for an itemized discussion of specific
one-time and ongoing hourly burdens for
respondents.
620 The Commission has previously discussed the
requirements of Rule 17a–22 in section IX.A.8,
supra.
621 This figure is based on the number of
aggregate filings received by the Commission in
2017, which was the last year for which the
Commission had compiled data at the time of the
Rule 17a–22 PRA update in 2020.
622 See FR Doc. 2020–08336, 85 FR 21910 (Apr.
20, 2020) (Request to OMB for Extension of Rule
17a–22; SEC File No. 270–202; OMB Control No.
3235–0196). Given the variability in the number of
filings per clearing agency received each year, the

Commission estimated an average of 120 annual
filings per clearing agency by averaging the
approximate number of filings received in the most
recent year for which the Commission has obtained
data (840 filings) by the number of registered
clearing agencies (7 clearing agencies).
623 See id.
624 Although current Rule 17a–22 requires
duplicate filings when the Commission is not a
registered clearing agency’s ARA, the additional
burden of making a duplicate filing is expected to
be minimal because the rule applies only to
materials that have already been published by the
registered clearing agency.
625 7 registered clearing agencies × 120 responses
per clearing agency × .25 hours = 210 burden hours.

The Commission’s currently approved
estimated response burden pursuant to
Rule 19b–4 and Form 19b–4 for 46
respondents is an aggregate burden of
69,259 hours.618

8. Rule 17a–22
Currently Approved Burden

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2,343

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Estimate 620

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ER21JA25.020

Rule l 9b-4(e) (Initial
Res onse
Rule l 9b-4(e)
(Subsequent
Res onse

language, render it using the associated
PDF renderer, and post it on a
respondent’s website continue to be 1
burden hour for each new derivative
securities product, and that the time to
structure, render and post the first new
derivative securities product per
respondent is an additional 0.5 hours.
Accordingly, the Commission estimates
that the total additional initial hour

ER21JA25.019

information as is required on current
Form 19b–4(e) on a respondent’s
website. However, given the relatively
small amount of data to be structured,
rendered, and posted for each new
derivative securities product, for
purposes of making a PRA burden
estimate the Commission estimates that,
on average, the requirement to structure
the information in a custom XML data

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

registered clearing agency will expend a
total of 30 hours per year to comply
with Rule 17a–22.626

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Revision to Burden Estimate
The Commission recognizes that the
amendments to Rule 17a–22 impose
certain burdens on respondents.
Although the scope of supplemental
materials subject to Rule 17a–22 would
not change, respondents would be
required to prominently post certain
supplemental materials on their internet
websites within two business days after
issuing, or making generally available,
such materials to their participants or
other entities with whom they have a
significant relationship. Currently,
respondents must file with the
Commission three paper copies of
certain supplemental materials issued,
or made generally available, to their
participants or other entities with whom
they have a significant relationship
within 10 days after issuing, or making
generally available, such materials. In
addition, when the Commission is not a
respondent’s ARA, the respondent must
file at the same time one paper copy of
the materials with its ARA.
While there may be a marginal
reduction in burden hours associated
with replacing the paper filing
requirement under Rule 17a–22 with an
electronic filing requirement via a
registered clearing agency’s website, for
purposes of making a PRA burden
estimate, the current baseline is
expected to represent a reasonable
estimate of the burden hours associated
with filing supplemental materials. The
time required to compile and mail
copies of supplemental materials is
expected, on average, to be equivalent to
the time required to post these materials
on a clearing agency’s website such that
they would be readily identifiable and
accessible on the website.627 Moreover,
reducing the timeframe under Rule 17a–
22 from 10 days to 2 business days is
not expected to increase the burden
hours associated with compliance with
Rule 17a–22. On average, filing
supplemental materials electronically
via a registered clearing agency’s
internet website is not expected to
increase or decrease burden hours from
the current baseline of 0.25 hours.
Accordingly, each registered clearing
agency is expected to continue to
expend a total of 30 hours per year to
626 840 total responses × .25 hours/7 active
clearing agencies = 30 burden hours.
627 See Section III.B.4. (explaining the
Commission’s interpretation of the requirement to
‘‘prominently post’’ supplemental materials on a
clearing agency’s website pursuant to the
amendments to Rule 17a–22).

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comply with Rule 17a–22.628 Thus, the
aggregate annual burden associated with
compliance with Rule 17a–22 is
expected to continue to be 210 hours.629
9. Rules 17a–5, 18a–7, and 17a–12
a. Requirement To File Annual Reports
on EDGAR Using Structured Data
Currently Approved Burden Estimate
Rules 17a–5, 17a–12, and 18a–7
require broker-dealers, OTC derivatives
dealers, and SBS Entities that are not
prudentially regulated, respectively, to
file annual reports, including financial
statements and supporting schedules
that must be audited by a PCAOBregistered independent public
accountant in accordance with PCAOB
standards. Under Rule 17a–5, each
broker-dealer is estimated to have an
annual reporting burden of 12 hours,
resulting in an annual industry burden
of 38,616 hours.630 Under Rule 17a–12,
each OTC derivatives dealer is
estimated to have an annual reporting
burden of 100 hours, resulting in an
annual industry burden of 200 hours.631
Under Rule 18a–7, each SBSD is
estimated to have an annual reporting
burden of 17 hours, resulting in an
annual industry burden of 136 hours.632
Revision to Burden Estimate
In the context of Nationally
Recognized Statistical Rating
Organizations (‘‘NRSROs’’), the
Commission estimated that it would
take an NRSRO, on average, sixteen
hours on a one-time basis to become
familiar with the EDGAR system.633
This estimate would also apply to
entities that are new filers on EDGAR
under the amendments to Rules 17a–5,
18a–7, and 17a–12.
For the 12 months ended December
31, 2023, the Commission received
628 840 total responses × .25 hours/7 active
clearing agencies = 30 burden hours.
629 7 registered clearing agencies × 120 responses
per clearing agency × .25 hours = 210 burden hours.
630 See Supporting Statement for the Paperwork
Reduction Act Information Collection Submission
for Rule 17a–5 (June 7, 2023), available at https://
www.reginfo.gov/public/do/
PRAViewDocument?ref_nbr=202304-3235-019.
631 See Supporting Statement for the Paperwork
Reduction Act Information Collection Submission
for Rule 17a–12 (Jan. 11, 2022), available at https://
www.reginfo.gov/public/do/
PRAViewDocument?ref_nbr=202110-3235-010.
632 See Supporting Statement for the Paperwork
Reduction Act Information Collection Submission
for Rule 18a–7 (Mar. 30, 2024), available at https://
www.reginfo.gov/public/do/
PRAViewDocument?ref_nbr=202403-3235-002.
Each MSBSP is estimated to have an annual
reporting burden of 10 hours; however, as of Dec.
31, 2023, there were no MSBSPs registered with the
Commission.
633 See Nationally Recognized Statistical Rating
Organizations, Release No. 72936 (Aug. 27, 2014),
79 FR 55077, 55235–6 (Sept. 15, 2014).

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1,498 filings of the annual reports
required by paragraph (d) of Rule 17a–
5 in paper. Based on this estimate, the
Commission estimates that
approximately 1,498 broker-dealers that
are required to file annual reports with
the Commission will be new EDGAR
filers. The broker-dealers that have filed
annual reports on EDGAR have EDGAR
access credentials and are familiar with
the mechanics of filing on EDGAR. The
Commission estimates the one time
industry-wide burden for broker-dealers
to acquire EDGAR access and
familiarize themselves with EDGAR will
be approximately 23,968 hours.634 ANC
broker-dealers must also file annual
reports under the amendments to Rule
17a–5, so there would be no additional
burden attributable to requiring the
electronic filing on EDGAR of ANC
broker-dealer supplemental reports
under paragraph (k) of Rule 17a–5.
In addition, as stated above, the
Commission estimates that 18 non-bank
SBS Entities would be required to
electronically file on EDGAR annual
reports under paragraph (c) of Rule 18a–
7, as amended. However, since these
firms are already filing Form SBSE on
EDGAR, the Commission does not
estimate any burden for these firms to
familiarize themselves with EDGAR.
The Commission estimates that the
one-time burden for an OTC derivatives
dealer to familiarize itself with EDGAR
would be approximately 16 hours.
However, because all three OTC
derivatives dealers already voluntarily
file their annual reports on EDGAR, the
Commission estimates that the one-time
industry-wide burden would be zero
hours.
The current PRA burden for
paragraph (d) of Rule 17a–5 includes an
annual industry-wide cost of
approximately $31,022 in postage costs
to mail the annual reports to the
Commission. Rule 17a–5 is being
amended to require these reports to be
filed electronically, so there should be
no more postage costs associated with
these requirements. Under the rule
amendments, broker-dealers will no
longer incur these costs.
Under the rule amendments, brokerdealers, OTC derivatives dealers,
SBSDs, and MSBSPs filing their annual
reports electronically must keep the
original oath or affirmation for a period
of not less than six years, the first two
years in an easily accessible place. The
requirement to keep the oath or
affirmation should not materially
increase a broker-dealer’s recordkeeping
burden.
634 1,498 broker-dealers × 16 hours = 23,968
hours.

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Under the rule amendments, brokerdealers, OTC derivatives dealers,
SBSDs, and MSBSPs are required to file
their annual reports and related filings
(including compliance reports,
exemption reports, accountant’s reports,
and supplemental reports) in Inline
XBRL. To file reports in Inline XBRL, a
filer must purchase Inline XBRL tagging
software to apply Inline XBRL tags to
the reports before submitting them to
EDGAR, or employ a tagging service
provider to apply the Inline XBRL tags
to the reports on its behalf. As described
in further detail in the economic
analysis and above, the burdens
associated with tagging the annual
reports and related filings in Inline
XBRL will vary based on the size of the
respondent and whether the respondent
is affiliated with a public reporting
company that is already subject to Inline
XBRL requirements, and the initial
implementation of Inline XBRL
requirements entails additional burdens
(e.g., establishing new processes for the
use of Inline XBRL tagging software)
that do not apply on an ongoing
basis.635
Compared to the proposing release,
the Commission has increased the
burden and cost estimates for Inline
XBRL tagging of the annual reports and
related filings for several reasons. First,
the Commission estimated at proposal
that all respondents affiliated with
public reporting companies already
subject to Inline XBRL requirements
would incur reduced burdens and costs,
because such respondents would be able
to leverage the Inline XBRL compliance
software licenses and/or service
agreements, as well as the Inline XBRL
tagging processes and experience, of
those affiliates. One commenter stated
that this burden and cost reduction is
dependent on the contractual
arrangements that firms have with thirdparty providers, and on the internal
staffing structure for each company.636
To account for this variation, the
Commission is now estimating that only
half of affiliated respondents will incur
reduced burdens and costs.637
635 See infra sections X.C.2.b and IX.D.2. We have
accounted for this expected variance in the
calculations of average burden and cost figures
presented in this section. Consistent with
structured data burden estimates in prior
Commission releases, the burden estimates here
assume internal Inline XBRL tagging would be done
by a compliance attorney. See supra section IX.D.5.
636 See XBRL Letter at 11.
637 As stated in the structured data cost section
of the economic analysis, the Commission has
identified 226 respondents affiliated with public
reporting companies. See infra section X.C.2.b. The
Commission is now estimating that only half, or
113, of those affiliated respondents will incur
reduced Inline XBRL burdens.

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Second, the Commission estimated at
proposal that respondents choosing to
tag annual reports and related filings
internally, rather than outsourcing the
Inline XBRL tagging to a third-party
service provider, would incur initial
implementation burdens and costs in
addition to ongoing Inline XBRL tagging
burdens and costs. The Commission
estimated at proposal that outsourcing
respondents would not incur any initial
implementation burdens. One
commenter stated that structured data
requirements will impose burdens
associated with diligencing, negotiating
with, and onboarding third parties.638
The Commission agrees, and because
these burdens apply to respondents that
outsource Inline XBRL tagging to thirdparty service providers, the Commission
has increased the number of
respondents it estimates will incur
initial structured data implementation
burdens.
However, as discussed above in
sections IV.A. and VII.A., the
Commission disagrees that the
structured data requirements under the
rule amendments will obligate every
filer or submitter to undergo multiple
fundamental operational changes. Firms
that outsource compliance with
structured data requirements to a thirdparty service provider rather than
comply with the structured data
requirements in-house would not
undergo these operational changes
because the third-party service provider
would take such actions as necessary.
For the custom XML requirements, most
firms will comply with those
requirements by completing fillable web
forms on EDGAR; other firms will have
the requisite sophistication to encode
disclosures using custom XML schemas
without the need for substantial
additional training or hiring of
personnel.639 Firms that comply with
Inline XBRL structured data
requirements internally will likely need
to implement processes for their staff to
apply Inline XBRL tags and validate
such tags. The Commission includes
these implementation and training costs
in its estimates of initial structured data
costs and burdens.
Third, the Commission’s proposed
structured data burden estimates did not
include any additional burden for
respondents complying with Rule 18a–
638 See

SIFMA 5/22/2023 Letter at 4.
infra section X.C.2.b. As explained below
in the Economic Analysis, firms that comply with
XBRL requirements internally do not need to hire
additional personnel that are proficient in XBRL
because they can license software tools that allow
staff without XBRL proficiency to apply Inline
XBRL tags without needing to overhaul the firm’s
systems or operations.
639 See

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7321

7 under a substituted compliance order
pursuant to Exchange Act Rule 3a71–6.
One commenter stated that the
Commission should allow firms relying
on substituted compliance to continue
submitting home-country reports in
their current form, explaining that the
organization and requirements of these
reports is often different from U.S.
reports.640 On an ongoing basis, the
Commission estimates that the Inline
XBRL burdens for respondents relying
on substituted compliance are equal to
the Inline XBRL burdens for other
respondents, because in each case, the
respondent will need to apply Inline
XBRL tags to disclosures in financial
statements and supplemental filings that
Rule 18a–7 requires, whether those
disclosures are provided in the U.S.
report or included within the
corresponding home country report
alongside other disclosures that only the
home country regulator requires.
However, the first time a respondent
relying on substituted compliance (or its
third-party tagging service provider)
applies Inline XBRL tags to its home
country report, it will incur the
additional burden of determining which
disclosures within its home country
report are responsive to U.S. disclosure
requirements and must therefore be
tagged. To capture this additional step,
the Commission is increasing the
estimated initial Inline XBRL tagging
burdens and costs from 50% in the
proposing release, by an additional 25%
for SBS Entities relying on substituted
compliance.
On average, respondents are estimated
to incur 7 burden hours and $1,600 in
external cost for the first response to be
tagged in Inline XBRL, and incur 4.5
burden hours and $1,000 in external
cost to tag subsequent responses in
Inline XBRL. Therefore, the Commission
estimates the total initial industry-wide
internal burden and external cost would
be 22,869 hours and $5,227,200 for
broker-dealers, 21 hours and $4,800 for
OTC derivative dealers, and 126 hours
and $28,800 for SBSDs and MSBSPs.641
The Commission estimates the total
ongoing annual industry-wide internal
640 See id. at 7. Although the comment referred
specifically to home-country equivalents to CCO
reports, home-country equivalents to Rule 18a–7
annual reports and related filings can also vary from
U.S. reports in their organization and requirements.
641 3,267 broker-dealers × 7 hours = 22,869 hours;
3,267 broker-dealers × $1,600 = $5,227,200. 3 OTC
derivative dealers × 7 hours = 21 hours; 3 OTC
derivative dealers × $1,600 = $4,800. 18 SBSDs and
MSBSPs × 7 hours = 126 hours; 18 SBSDs and
MSBSPs × $1,600 = $28,800. These estimates
include SBSDs and MSBSPs that rely on substituted
compliance pursuant to a Commission order with
respect to reporting obligations under Rule 18a–
7(c).

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

burden and external cost would be
14,702 hours and $3,267,000 for brokerdealers, 14 hours and $3,600 for OTC
derivative dealers, and 81 hours and
$18,000 for SBSDs and MSBSPs.642
b. Amendments Relating to the FOCUS
Report
Currently Approved Burden Estimate
Rules 17a–5, 17a–12, and 18a–7
require broker-dealers, OTC derivatives
dealers, and SBS Entities, respectively,
to file unaudited financial information
on the FOCUS Report (Form X–17A–5
Part II, IIA, or IIC) on a monthly or
quarterly basis.643 Under Rule 17a–5,
each broker-dealer is estimated to have
an annual reporting burden of 12 hours,
resulting in an annual industry burden
of 38,616 hours.644 Under Rule 17a–12,
each OTC derivatives dealer is
estimated to have an annual reporting
burden of 80 hours, resulting in an
annual industry burden of 160 hours.645
Under Rule 18a–7, each SBSD that is
not prudentially regulated is estimated
to have an annual reporting burden of
192 hours, resulting in an annual
industry burden of 1,536 hours, and
each SBSD that is prudentially regulated
is estimated to have an annual reporting
burden of 16 hours, resulting in an
annual industry burden of 464 hours.646

ddrumheller on DSK120RN23PROD with RULES2

Revision to Burden Estimate
The Commission is making a number
of amendments to the FOCUS Report.
First, it is making corrective and
clarifying amendments to FOCUS
Report Part II. The Commission
estimates that the amendments will
result in an initial burden of five hours
on each Part II filer so firms can
familiarize themselves with the
amendments to FOCUS Report Part II.
These amendments will generally either
have no impact on or reduce the
ongoing burden on the vast majority of
filers because they will generally reduce
642 3,267 broker-dealers × 4.5 hours = 14,701.5
hours; 3,267 broker-dealers × $1,000 = $3,267,000.
3 OTC derivative dealers × 4.5 hours = 13.5 hours;
3 OTC derivative dealers × $1,000 = $3,000. 18
SBSDs and MSBSPs × 4.5 hours = 81 hours; 18
SBSDs and MSBSPs × $1,000 = $18,000.
643 See 17 CFR 240.17a–5; 17 CFR 240.17a–12; 17
CFR 240.18a–7.
644 See Supporting Statement for the Paperwork
Reduction Act Information Collection Submission
for Rule 17a–5 (June 7, 2023), available at https://
www.reginfo.gov/public/do/
PRAViewDocument?ref_nbr=202304-3235-019.
645 See Supporting Statement for the Paperwork
Reduction Act Information Collection Submission
for Rule 17a–12 (Jan. 11, 2022), available at https://
www.reginfo.gov/public/do/
PRAViewDocument?ref_nbr=202110-3235-010.
646 See Supporting Statement for the Paperwork
Reduction Act Information Collection Submission
for Rule 18a–7 (Mar. 30, 2024), available at https://
www.reginfo.gov/public/do/
PRAViewDocument?ref_nbr=202403-3235-002.

VerDate Sep<11>2014

20:42 Jan 18, 2025

Jkt 265001

questions about where and how to
report items on the form. However,
because the amendments require standalone swap dealers and stand-alone
introducing brokers to complete a new
section of FOCUS Report Part II that
these types of firms were not previously
required to complete (i.e., Computation
of CFTC Minimum Capital
Requirements), the Commission
estimates that the amendments would
result in an ongoing annual burden of 1
hour per stand-alone swap dealer or
stand-alone introducing broker.
The Commission estimates that there
are 466 broker-dealers filing FOCUS
Report Part II under Rule 17a–5,
resulting in an estimated industry-wide
initial burden of 2,375 hours.647 The
Commission estimates that there are
three OTC derivatives dealers filing
FOCUS Report Part II under Rule 17a–
12, resulting in an estimated industrywide initial burden of 15 hours.648 The
Commission estimates that there are 18
non-broker-dealer SBS Entities filing
FOCUS Report Part II under Rule 18a–
7, resulting in an estimated industrywide initial burden of 90 hours.649 The
Commission estimates that for Part II
filers that are not stand-alone swap
dealers, the amendments generally will
not change the estimated ongoing
burden imposed by FOCUS Report Part
II, as amended. The Commission
estimates that there are 4 domestic
stand-alone swap dealers and 67
domestic stand-alone introducing
brokers filing FOCUS Report Part II
under Rule 17a–5, resulting in an
estimated industry-wide ongoing
burden of 71 hours per year.650
Second, the Commission is aligning
the text in FOCUS Report Part IIC with
the text in FFIEC Form 031, including
additional amendments to FOCUS
Report Part IIC to match additional
changes made to FFIEC Form 031 since
the date of the Proposing Release. These
amendments are expected to result in an
647 5 hours × 466 Part II filers under Rule 17a–
5 = 2,330 hours. These internal hours likely will be
performed by a compliance manager.
648 5 hours × 3 Part II filers under Rule 17a–12
= 15 hours. These internal hours likely will be
performed by a compliance manager.
649 5 hours × 18 Part II filers under Rule 18a–7
= 90 hours. These internal hours likely will be
performed by a compliance manager.
650 1 hour × 71 Part II filers that are domestic
stand-alone swap dealers or stand-alone
introducing brokers = 71 hours. These internal
hours likely will be performed by a compliance
manager. This burden estimate may be duplicative
since the CFTC estimates that swap dealers and
introducing brokers elect to file the CFTC’s Form
1–FR instead of electing to file the SEC’s FOCUS
Report. See Supporting Statement for Revised
Information Collections—OMB Control Number
3038–0024 (Jan. 16, 2024), available at https://
www.reginfo.gov/public/do/
PRAViewDocument?ref_nbr=202401-3038-001.

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Fmt 4701

Sfmt 4700

initial burden of five hours on each
bank SBS Entity so that firms can
compare the revised FOCUS Report Part
IIC with FFIEC Form 031. However,
these amendments are expected to
generally either have no impact on or
reduce the ongoing burden on bank SBS
Entities because they will generally
reduce questions about how to complete
FOCUS Report Part IIC consistently
with FFIEC Form 031. The Commission
estimates that there are 30 bank SBS
Entities filing FOCUS Report Part IIC,
resulting in an estimated industry-wide
initial burden of 150 hours.651 The
Commission estimates that the
amendments will not change the
estimated ongoing annual burden
imposed by FOCUS Report Part IIC.
Third, the Commission is requiring
only the CEO or CFO’s signature lines
to be signed on the FOCUS Report’s
cover page, and allows these signatures
to be signed either manually or
electronically. This amendment is
expected to result in an initial burden
of 1 hour on each filer so that the firm
can review the standards for an
electronic signature on the FOCUS
Report Part II, IIA, or IIC, as applicable.
However, this amendment is expected
to generally either have no impact on or
reduce the ongoing burden on FOCUS
Report filers, because they will not be
required to furnish as many signatures
as before the amendment, and it may be
easier to prepare electronic signatures
rather than manual signatures since
firms will already be familiar with the
process and can easily obtain these
signatures while working remotely. The
Commission estimates that there are
3,463 broker-dealers, non-broker-dealer
SBS Entities, and bank SBS Entities
filing FOCUS Report Parts II, IIA, or IIC,
resulting in an estimated industry-wide
initial burden of 3,463 hours.652 The
Commission estimates that the
amendments will not change the
estimated ongoing annual burden
imposed by FOCUS Report Parts II, IIA,
and IIC, as amended.
Fourth, the Commission is making
two technical amendments to FOCUS
Report Part IIA.653 The Commission
651 5 hours × 30 Part IIC filers = 150 hours. These
internal hours likely will be performed by a
compliance manager.
652 1 hour × 3,412 Part II or Part IIA filers under
Rule 17a–5 = 3,412 hours. 1 hour × 48 Part II or
Part IIC filers under Rule 18a–7 = 48 hours. 1 hour
× 3 Part II filers under Rule 17a–12 = 3 hours. These
internal hours likely will be performed by a
compliance manager.
653 Lines 11 and 15 of the Computation of Net
Capital Requirement are being updated to replace
the incorrect cross-reference to line 19 with a
corrected cross-reference to line 18. In addition, the
Commission is amending FOCUS Report Part IIA to
require broker-dealers using the alternative method

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

ddrumheller on DSK120RN23PROD with RULES2

Filing annual audit on
EDGAR - Initial
burden
Filing annual audit in
Inline XBRL - Initial
burden
Filing annual audit in
Inline XBRL On oin burden
Corrective and
clarifying amendments
to FOCUS Report Part
II - Initial burden
Corrective and
clarifying amendments
to FOCUS Report Part
IIA - Initial burden

The Commission estimates that the
amendment will result in an initial
burden of five hours on each firm
required to file annual reports and
related annual filings under Rules 17a–
5, 17a–12, and 18a–7, so firms can
familiarize themselves with the change.
The Commission estimates that there are
3,288 broker-dealers, SBS Entities and
OTC derivatives dealers filing annual
reports, resulting in an estimated
industry-wide initial burden of 16,440
hours.656 This amendment will
generally either have no impact on or
reduce the ongoing burden on the filers
because they will no longer need to
obtain notarization of the annual
reports.
The estimated hourly burdens and
dollar costs associated with the
amendments to Rules 17a–5, 18a–7, and
17a–12 are summarized in the below
tables:
BILLING CODE 8011–P

Reporting

1,498

16.00

5.33

0.00

0.00

5.33

7,989.33

Reporting

3,267

7.00

2.33

0.00

2.33

2.33

7,623.00

Reporting

3,267

0.00

0.00

4.50

4.50

4.50

14,701.50

Reporting

466

5.00

1.67

0.00

1.67

1.67

Reporting

2,946

5.00

1.67

0.00

1.67

1.67

to compute net capital to report the percentage of
debt to debt-equity total.
654 5 hours × 2,946 Part IIA filers = 14,730 hours.
These internal hours likely will be performed by a
compliance manager.

VerDate Sep<11>2014

derivatives dealer so that the firm can
familiarize itself with the SEC eFOCUS
system. However, this amendment is
expected to generally either have no
impact on or reduce the ongoing burden
on OTC derivatives dealers, because
filing the FOCUS Report electronically
is an automated process as compared to
filing by paper. Therefore, the
Commission estimates that there are 3
OTC derivatives dealers, resulting in an
estimated industry-wide initial burden
of 45 hours.655 The Commission
estimates that the amendment will not
change the estimated ongoing annual
burden imposed by Rule 17a–12.
c. Notarization of Annual Reports
The Commission is amending Part III
of Form X–17A–5 (i.e., the annual
audit’s cover page) to remove the
signature line for the notary public. The
current supporting statements for Rules
17a–5, 17a–12, and 18a–7 do not
attribute a specified portion of the
burden to the notarization requirement.

20:42 Jan 18, 2025

Jkt 265001

655 15 hours × 3 OTC derivatives dealers = 45
hours. These internal hours likely will be
performed by a compliance manager.
656 3,267 broker-dealers filing under Rule 17a–5 ×
5 hours = 16,335 hours. 18 non-broker-dealer SBS

PO 00000

Frm 00075

Fmt 4701

Sfmt 4725

776.67

4,910.00

Entities filing under Rule 18a–7 × 5 hours = 90
hours. 3 OTC derivatives dealers filing under Rule
17a–12 × 5 hours = 15 hours. These internal hours
likely will be performed by a compliance manager.

E:\FR\FM\21JAR2.SGM

21JAR2

ER21JA25.021

estimates that the amendments will
result in an initial burden of five hours
on each Part IIA filer so firms can
familiarize themselves with the
amendments. These amendments will
generally either have no impact on or
reduce the ongoing burden on the vast
majority of filers because they align
FOCUS Report Part IIA with the
requirements of Rule 15c3–1 and will
reduce questions about how to complete
FOCUS Report Part IIA consistently
with Rule 15c3–1. The Commission
estimates that there are 2,946 FOCUS
Report Part IIA filers, resulting in an
estimated industry-wide initial burden
of 14,730 hours.654
Finally, the Commission is requiring
OTC derivatives dealers to file the
FOCUS Report electronically on the SEC
eFOCUS system instead of in paper. The
Commission estimates that this
amendment will result in an initial
burden of 15 hours on each OTC

7323

7324

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Reporting

71

Reporting

3,267

4

0.00

0.00

0.25

0.25

1.00

71.00

5.00

1.67

0.00

1.67

1.67

5,445.00

TOTAL HOURLY BURDEN FOR ALL RESPONDENTS

Filing annual audit
in Inline XBRL Initial burden
Filing annual audit
in Inline XBRL On oin burden

Filing annual audit
on EDGARInitial burden
Filing annual audit
in Inline XBRL Initial burden
Filing annual audit
in Inline XBRL On oin burden
Corrective and
clarifying
amendments to
FOCUS Report
Part II - Initial
burden
Aligning FOCUS
Report Part IIC
with FFIEC F onn
031 - Initial burden
Amendments to
FOCUS Report

ddrumheller on DSK120RN23PROD with RULES2

signature
requirement Initial burden
Removal of oath or
affirmation
notarization
requirement Initial burden

VerDate Sep<11>2014

42,653.83

Reporting

3,267

$1,600.00

$533.33

$0.00

$$533.33

$533.33

$1,742,400.00

Reporting

3,267

$0.00

$0.00

$1,000.00

$1,000.00

$1,000.00

$3,267,000.00

TOTAL COST FOR ALL RESPONDENTS

$5,009,400.00

Reporting

0

16.00

5.33

0.00

5.33

5.33

0.00

Reporting

18

7.00

2.33

0.00

2.33

2.33

42.00

Reporting

18

0.00

0.00

4.50

4.50

4.50

81.00

Reporting

18

5.00

1.67

0.00

1.67

1.67

30.00

Reporting

30

5.00

1.67

0.00

0.00

1.67

50.00

Reporting

48

1.00

0.33

0.00

0.33

0.33

16.00

Reporting

18

5.00

1.67

0.00

1.67

1.67

30.00

TOTAL HOURLY BURDEN FOR ALL RESPONDENTS

249.00

20:42 Jan 18, 2025

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Sfmt 4725

E:\FR\FM\21JAR2.SGM

21JAR2

ER21JA25.022

capital computation
section of FOCUS
eport Part II On oin burden
emoval of oath or
affirmation
otarization
equirement - Initial
urden

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Filing annual audit
on EDGAR - Initial
burden
Filing annual audit
in Inline XBRL Initial burden
Filing annual audit
in Inline XBRL On oin burden
Corrective and
clarifying
amendments to
FOCUS Report Part
II - Initial burden
Amendments to
FOCUS Report
signature
requirement - Initial
burden
Filing FOCUS
Report on SEC
eFOCUS - Initial
burden
Removal of oath or
affirmation
notarization
requirement - Initial
burden

Filing annual audit
in Inline XBRL Initial burden
Filing annual audit
in Inline XBRL On oin burden

Reporting

18

I

$1,600.00

$533.33

$0.00

$533.33

$533.33

$9,600.00

Reporting

18

I

$0.00

$0.00

$1,000.00

$1,000.00

$1,000.00

$18,000.00

TOTAL COST FOR ALL RESPONDENTS

$27,600.00

Reporting

0

16.00

5.33

0.00

5.33

5.33

0.00

Reporting

3

7.00

2.33

0.00

2.33

2.33

7.00

Reporting

3

0.00

0.00

4.50

4.50

4.50

13.50

Reporting

3

5.00

1.67

0.00

1.67

1.67

5.00

Reporting

3

1.00

0.33

0.00

0.33

0.33

1.00

Reporting

3

15.00

5.00

0.00

5.00

5.00

15.00

Reporting

3

5.00

1.67

0.00

1.67

1.67

5.00

TOTAL HOURLY BURDEN FOR ALL RESPONDENTS

46.50

Reporting

3

$1,600.00

$533.33

$0.00

$533.33

$533.33

$1,600.00

Reporting

3

$0.00

$0.00

$1,000.00

$1,000.00

$1,000.00

$3,000.00

TOTAL COST FOR ALL RESPONDENTS

$4,600.00

BILLING CODE 8011–C

ddrumheller on DSK120RN23PROD with RULES2

10. Rule 17h–2T
The current supporting statement for
Rule 17h–2T does not identify a burden
for sending the risk assessment reports
to the Commission. As broker-dealers
that are required to file reports under
Rule 17h–2T are also required to file
annual reports under Rule 17a–5,657 the
Commission is not estimating an
additional burden for becoming familiar
with the EDGAR system and for
monitoring changes in EDGAR filing
657 See

supra section IX.D.9.

VerDate Sep<11>2014

20:42 Jan 18, 2025

Jkt 265001

requirements attributable to the
amendments to Rule 17h–2T.
Under the rule amendments, brokerdealers that are required to file reports
under Rule 17h–2T will be required to
tag the financial statements included
with the report in Inline XBRL. Because
these broker-dealers are also required to
tag annual reports under Rule 17a–5 in
Inline XBRL, the Inline XBRL
requirement for reports under Rule 17h–
2T would represent additional
(quarterly) iterations of that compliance
process, as abbreviated to reflect that
Form 17–H requires only financial
statements (and not any supplemental

PO 00000

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Fmt 4701

Sfmt 4700

reports or other related filings) to be
tagged in Inline XBRL, and that Form
17–H filers may omit the statement of
cash flows and the footnotes to the
financial statements. Thus, the
Commission estimates an average
additional burden of 2 hours per
response and a total industrywide
burden of 1,928 hours per year for Form
17–H filers to structure their financial
statements in Inline XBRL.658
658 2 hours per response × 4 responses per year
× 241 respondents (as of Dec. 31, 2023) = 1,928
hours. Rule 17h–2T requires fourth quarter
financial statements in addition to cumulative

E:\FR\FM\21JAR2.SGM

Continued

21JAR2

ER21JA25.023

Filing annnal audit
in Inline XBRL Initial burden
Filing annual audit
in Inline XBRL Ongoing burden

7325

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Reporting

241

Currently Approved Burden Estimate
Rule 17a–19 requires every national
securities exchange and registered
national securities association to file a
Form X–17A–19 with the Commission
and SIPC within five business days of
the initiation, suspension, or
termination of any member. The

Reporting

ddrumheller on DSK120RN23PROD with RULES2

TOTAL HOURLY BURDEN FOR ALL RESPONDENTS

1,928.00

16

25

Currently, Rule 3a71–3(d)(1)(vi)
requires the Registered Entity to file the
ANE Exception Notice by submitting it
to the electronic mailbox specified on
the Commission’s website. When the
Commission originally adopted the ANE
annual financial statements. See 17 CFR 240.17h–
1. The Commission has not added burden hours
associated with the custom XML requirements for
the facing page and Part II of Form 17–H, because
those requirements are currently in effect for Form
17–Hs that are filed on EDGAR, and nearly all Form
17–H filers (99% as of Dec. 31, 2023) file Form 17–
H on EDGAR. See infra section X.C.2.b for further
detail on structured data compliance costs,
including estimated cost ranges and factors
underlying expected variance in structured data
costs across different filers. For example, as we
discuss in that section, we expect some Form 17–
H filers are larger broker-dealers affiliated with
public companies that are also subject to Inline
XBRL requirements for Form X–17A–5 Part III,
which requires Inline XBRL tagging of annual
financial statements. These larger broker-dealers
will incur lower structured data costs than other
Form 17–H filers. We have accounted for this

Jkt 265001

2.00

2.00

stated above with respect to Rule 17a–
5, 17a–12, and 18a–7, the Commission
estimates the one-time reporting burden
of becoming familiar with the EDGAR
system is approximately 16 hours.660
Accordingly, the Commission estimates
that the one-time industry-wide
reporting burden would be
approximately 400 hours.661

The 25 respondents who file Form X–
17A–19 would need to familiarize
themselves with the EDGAR system. As

Currently Approved Burden Estimate

20:42 Jan 18, 2025

1,928.00

0.00

Revision to Burden Estimate

12. Rule 3a71–3(d)(1)(vi)

VerDate Sep<11>2014

8.00

0.00

Commission currently estimates that
Form X–17A–19 would take 0.25 hours
to prepare, resulting in an annual
industry-wide burden of 105 hours.659

11. Rule 17a–19 and Form X–17A–19

Filing Form X17A-19 in
EDGAR - Initial
Burden

4

5.33

133.25

TOTAL COST FOR ALL RESPONDENTS

133.25

5.33

0

5.33

Exception Notice requirement, it
estimated that each Registered Entity
would file one ANE Exception Notice
with the Commission and that it would
take 30 minutes to file each ANE
Exception Notice, resulting in an
industry-wide initial one-time burden of
12 hours.662

Revision to Burden Estimate

expected variance in the calculation of average
burden figures presented in this section. The
estimated burdens here are higher than at proposal
because, as the Commission explains in section
X.C.2.b, the Commission now estimates that only
half of respondents affiliated with public
companies (here, 40 out of 81 affiliated Form 17–
H filers) will experience a reduced XBRL tagging
burden. Consistent with structured data burden
estimates in prior Commission releases, the burden
estimates here assume Inline XBRL tagging would
be done by a compliance attorney. See supra
section IX.D.5.
659 See Supporting Statement for the Paperwork
Reduction Act Information Collection Submission
for Rule 17A–19 and Form X–17A–19 (July 25,
2023), available at https://www.reginfo.gov/public/
do/PRAViewDocument?ref_nbr=202307-3235-021.
660 See supra section IX.D.9.a.

661 16 hours × 25 respondents = 400 hours. The
Commission assumes all respondents would use
fillable web forms on EDGAR to input their Form
X–17A–19 disclosures (which EDGAR would
subsequently convert into a custom XML data
language). This estimate reflects time for
respondents to familiarize themselves with the
forms and does not include any added burden
hours associated with the custom XML requirement
for Form X–17A–19.
662 See Cross-Border Adopting Release, 85 FR at
6340–41. See also Supporting Statement for the
Paperwork Reduction Act Information Collection
Submission for the Rule 3a71–3 Security-Based
Swap Dealer De Minimis Counting Exception for
Certain Transactions Arranged, Negotiated or
Executed in the United States (Jan. 7, 2020) note 23
and accompanying text and section 15.d, available
at https://www.reginfo.gov/public/do/
PRAViewDocument?ref_nbr=201912-3235-011.

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Fmt 4701

Sfmt 4700

The Commission does not expect that
changing the manner of filing the ANE
Exception Notice from an email filing to
an EDGAR filing will change this
estimated one-time burden. The ability
to withdraw an ANE Exception Notice
via EDGAR as adopted in this release
will result in an additional one-time

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Require filing
Form 17-H in
Inline XBRL On oin Burden

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Withdrawal of
notice of ANE
Exception Notice,
3a71-3(d)(l )(vi))
On oin Burden

Reporting

24

0.17

0.17

12

TOTAL CHANGE IN BURDEN FOR ALL RESPONDENTS

12.00

0.50

0.00

This column reflects the one-time burden estimates annualized over a three-year period (0.50 hours -e- 3 years = 0.17 hours/year).

2

0.17 hours/year x 1 response/yr= 0.17 hours.

3

0.50 hours/response x 24 entities = 12 hours.

Currently Approved Burden Estimate
When the Commission originally
adopted Rule 15fi–3, it expected there to
be only a minimal, if any, initial burden
of designing a system for submitting
VDNs.664 The Commission also believed
that the associated ongoing hourly
burden of preparing and submitting
VDNs would be minimal.665 The
Commission stated that, until SBS
Entities were registered with the
Commission, it was difficult for the
Commission to determine the typical
number of valuation disputes meeting
the applicable thresholds that SBS
Entities would be required to submit on
an annual basis.666 The Commission
had estimated that each SBS Entity will
spend an average of 24 hours each year
complying with the requirement to
prepare and submit VDNs, for an
estimated average annual burden of
1,320 hours in the aggregate for all 55
SBS Entities.667
Revision to Burden Estimate

Registered Entities × 1⁄2 hour = 12 hours.
Risk Mitigation Adopting Release, 85 FR

664 See

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0.17

would result in an industry-wide initial
one-time burden of 12 hours.663

1

13. Rule 15fi–3(c)

663 24

Exception Notice electronically on
EDGAR. If each Registered Entity files
one withdrawal of its ANE Exception
Notice, the Commission estimates that

at 6385.
665 Id. at 6385–86.
666 Id.
667 This 1,320-hour annual burden reflects the
currently approved information collection burden
estimate for Rule 15fi–3(c); see Supporting
Statement for the Paperwork Reduction Act
Information Collection Submission for Rules 15Fi–
3 through 15Fi–5—Risk Mitigation Techniques for
Uncleared Security-Based Swaps (Aug. 18, 2021),

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The amendments to Rule 15fi–3
related to EDGAR submission do not
have an impact on the burdens
associated with the existing collection
of information. In particular, prior to the
amendments, Rule 15fi–3(c) required
SBS Entities to submit security-based
swap VDNs to the Commission ‘‘in a
form and manner acceptable to the
Commission,’’ and staff made available
to SBS Entities two options for
submitting VDNs which includes either:
(1) an electronic submission using
EDGAR or (2) submission to a dedicated
Commission email address. The
Commission is amending Rule 15fi–3(c)
to affirmatively require SBS Entities to
submit VDNs to the Commission
electronically in EDGAR in a custom
XML data language.
SBS Entities will already have access
to EDGAR by virtue of using the system
to submit their applications for
registration on either Forms SBSE,
SBSE–A, or SBSE–BD, and to submit
their certification for registration on
Form SBSE–C. As a result, SBS Entities
would not incur any additional burden
associated with obtaining access to

EDGAR for purposes of submitting
VDNs given that all such filers should
already have an active CIK. With respect
to the custom XML structuring
requirement for VDNs, SBS Entities
would be able to comply by inputting
their disclosures into a fillable web form
on EDGAR rather than structuring their
disclosures in custom XML themselves.
As a result, SBS Entities would not
incur any additional burden associated
with the custom XML structuring
requirement for VDNs.668 The
Commission is, however, revising the
total burden estimate based on the three
additional applications for registration
as an SBSD it received since issuing the
Proposing Release. Based on its estimate
that each SBS Entity will spend an
average of 30 hours 669 each year
complying with the Rule 15fi–3(c)
requirement, the Commission estimates
an average annual burden of 90 hours in
the aggregate for three additional SBS
Entities. Accordingly, the Commission
estimates an average annual burden of
1,740 hours in the aggregate for 58 SBS
Entities.

available at https://www.reginfo.gov/public/do/
PRAViewICR?ref_nbr=202108-3235-011.
Additionally, when the Commission adopted Rule
15fi–3(c) it stated that, although it believed that the
time required to submit amendments to existing
notices is likely included in the 24 hour estimate,
it was ‘‘conservatively increasing that estimate by
25% to account for the submission of amended
notices. As such, [the Commission estimated that]
SBS Entities will spend on average of 30 hours each
year complying with this requirement, for an
estimated average annual burden of 1,650 hours in

the aggregate for all 55 respondents.’’ See Risk
Mitigation Adopting Release, 85 FR at 6386.
668 See infra section X.C.2.b. SBS Entities relying
on substituted compliance pursuant to a
Commission order with respect to the requirements
of Rule 15fi–3 would also be able to comply by
inputting their dispute reports into the fillable web
form on EDGAR rather than structuring those
reports in the custom XML themselves. See supra
section V.C.2.
669 See supra note 676.

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burden. The Commission estimates that
withdrawing an ANE Exception Notice
electronically on EDGAR will incur the
same burden as filing the initial ANE

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TOTAL CHANGE IN HOURLY BURDEN

14. Rule 15fk–1(c)(2)(ii)(A)
Currently Approved Burden Estimate
Under current Rule 15fk–1(c), the
CCO of a SBS Entity is required to
prepare and submit a CCO report to the
Commission. The Commission
previously estimated that these reports
would require on average 93 hours per
respondent per year for an ongoing
annual burden of 5,115 hours.670

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Revision to Burden Estimate
The Commission recognizes that the
amendments to Rule 15fk–1(c) may
potentially impose certain burdens on
respondents. Although the information
to be included in the CCO report
pursuant to Rule 15fk–1(c) would not
change, the amendment requires
respondents to submit the CCO report
electronically with the Commission
through EDGAR in Inline XBRL.
The Commission estimates that no
SBS Entities would be first-time EDGAR
users needing to obtain EDGAR access
credentials. Thus, the internal time
burden associated with completing a
Form ID application to gain access to
EDGAR would not apply to SBS
Entities.671
SBS Entities would incur a burden to
submit the CCO report in Inline XBRL.
Because the CCO reports consist of a
limited number of textual narrative
sections (compared to the various sets of
numerical values that comprise
financial statements, which take
significantly longer to tag), the
Commission estimates that, on average,
an SBS Entity would spend 5 internal
burden hours and $1,500 in external
costs (e.g., the cost to license and renew
Inline XBRL compliance software and/
or services) to tag its CCO report in
Inline XBRL in the initial year of
compliance, and 3 internal burden
hours and $500 in external costs in
subsequent years.672
670 See Business Conduct Standards for SecurityBased Swap Dealers and Major Security-Based
Swap Participants, Exchange Act Release No. 77617
(Apr. 14, 2016), 81 FR 29960, 30096 (May 13, 2016)
(‘‘Business Conduct Release’’).
671 See supra section IX.D.1.
672 This is also the case with respect to any SBS
Entities relying on substituted compliance pursuant
to a Commission order with respect to the

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The Commission has increased the
burden and cost estimates for Inline
XBRL tagging of CCO reports compared
to the proposing release for two reasons.
First, as discussed in an earlier section,
the Commission estimated at proposal
that all respondents affiliated with
public reporting companies already
subject to Inline XBRL requirements
would incur reduced burdens and costs,
because such respondents would be able
to leverage the Inline XBRL compliance
software licenses and/or service
agreements, as well as the Inline XBRL
tagging processes and experience, of
those affiliates.673 One commenter
stated that this burden and cost
reduction is dependent on the
contractual arrangements that firms
have with third-party providers, and on
the internal staffing structure for each
company.674 To account for this
variation, the Commission is now
estimating that only half of affiliated
respondents (i.e., 21 out of the 43
affiliated SBS Entities) will experience
reduced burdens and costs.
Second, the Commission’s proposed
structured data burden and cost
estimates did not differentiate between
SBS Entities relying on substituted
compliance orders with respect to the
requirements of Rule 15fk–1 and other
SBS Entities. One commenter, in
recommending the Commission allow
firms relying on substituted compliance
to continue submitting home-country
reports in their current form, stated that
the organization and requirements of
requirements of Exchange Act section 15F(k) and
Rule 15fk–1 because in each case, the SBS Entity
will incur the cost of applying Inline XBRL tags to
the information addressed in Rule 15fk–1(c)(2)(i)
(whether that information is provided in a report
required by Rule 15fk–1(c) or included within the
home country report required to be provided to the
Commission by a substituted compliance order).
See infra section X.C.2.b for further detail on
structured data compliance costs, including
estimated cost ranges and factors underlying
expected variance in structured data costs across
different filers. We have accounted for this expected
variance in the calculations of average burden and
cost figures presented in this section. Consistent
with structured data burden estimates in prior
Commission releases, the burden estimates here
assume Inline XBRL tagging would be done by a
compliance attorney. See supra section IX.D.5.
673 See supra section IX.D.9.a.
674 See XBRL Letter at 11.

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90.00

these reports is often different from U.S.
reports.675 The Commission estimates
on an ongoing basis, the Inline XBRL
tagging burdens and costs incurred by
SBS Entities relying on substituted
compliance will be equal to those
incurred by other SBS Entities, because
in each case, the SBS Entity will need
to apply Inline XBRL tags to the
narrative descriptions addressed in
Exchange Act Rule 15fk–1(c)(2)(i),
whether those narrative descriptions are
provided in a report required by Rule
15fk–1(c) or included within the home
country report required to be provided
to the Commission by a substituted
compliance order. However, the first
time an SBS Entity relying on
substituted compliance (or its thirdparty tagging service provider) applies
Inline XBRL tags to its home country
report, it will incur the additional
burden of determining which narrative
descriptions within its home country
report correspond to the descriptions
addressed in Exchange Act Rule 15fk–
1(c)(2)(i) and must therefore be tagged.
To capture this additional step, the
Commission is increasing the estimated
initial Inline XBRL tagging burdens and
costs compared to the proposing release.
Accordingly, the Commission
estimates that the total burden
associated with compliance with Rule
15fk–1(c) would be an annual hour
burden of 98 hours per respondent in
the initial year (up from 94.5 hours) and
96 hours per respondent in subsequent
years (up from 94 hours), and an annual
cost burden of $1,500 per respondent in
the initial year (up from $600) and $500
per respondent in subsequent years (up
from $400), yielding an industry-wide
annual burden of 5,194 hours and
$79,500 in the first year and 5,088 hours
and $26,500 in subsequent years.676
675 See

SIFMA 5/22/2023 letter at 7.
annual aggregate burden hour estimate for
the initial year of compliance is based on the
following calculation: (93 hours + 5 hours) × (53
SBS Entities) = 5,194 hours. The annual aggregate
burden hour estimate for the subsequent years of
compliance is based on the following calculation:
(93 hours + 3 hours) × (53 SBS Entities) = 5,088
hours. The annual aggregate external cost estimate
for the initial year of compliance is based on the
following calculation: $1,500 × (53 SBS Entities) =
$79,500. The annual aggregate external cost
676 The

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E. Collection of Information Is
Mandatory
All collections of information
pursuant to the rules are mandatory, or
mandatory except to the extent an
exception is available.
F. Confidentiality of Responses to
Collection of Information
For all Covered SRO Forms, no
assurance of confidentiality is given by
the Commission with respect to
responses made on such forms. While
Rule 24b–2 allows entities to seek
confidential treatment, the Commission
expects that all information will be
public and that confidential treatment
will not be available. Any person may
make written objection to the public
disclosure of any information contained
in such forms in accordance with the
procedures set forth in Rule 24b–2(b).677
The information collected pursuant to
Rule 3a71–3(d)(1)(vi) is public
information to assist Relying Entities
and their affiliates in determining
whether they have satisfied the ANE
Exception’s notice requirement and in
monitoring their progress toward the
ANE Exception’s cap on inter-dealer
security-based swaps. The amendment
to Rule 3a71–3(d)(1)(vi) provides that
notices and withdrawals shall be
publicly disseminated through the
Commission’s EDGAR system. Because
reliance on the ANE Exception which
requires filing of an ANE Exception
Notice is voluntary, the Commission
does not expect that a Registered Entity
seeking to facilitate the exception would
include information that could not be
publicly disclosed in the notices or
withdrawals required by the
amendment to Rule 3a71–3(d)(1)(vi) or
would object to the public disclosure of
information contained in such notices
or withdrawals.
Rule 15fi–3(c) requires an SBS Entity
to promptly notify the Commission and
any applicable prudential regulator of
any security-based swap valuation
dispute in excess of $20,000,000 (or its
equivalent in any other currency) if not
resolved within: (1) three business days,
if the dispute is with a counterparty that
is an SBS Entity; or (2) five business
days, if the dispute is with a
counterparty that is not an SBS Entity.
The rule also requires SBS Entities to
notify the Commission and any
applicable prudential regulator, if the
amount of any security-based swap
valuation dispute that was the subject of
a previous notice increases or decreases
estimate for subsequent years of compliance is
based on the following calculation: $500 × (53 SBS
Entities) = $26,500.
677 17 CFR 240.24b–2(b).

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by more than $20,000,000 (or its
equivalent in any other currency), at
either the transaction or portfolio level.
These amendments are required to be
provided to the Commission, and any
applicable prudential regulator, no later
than the last business day of the
calendar month in which the applicable
security-based swap valuation dispute
increases or decreases by the applicable
dispute amount. To the extent that the
Commission receives confidential
information pursuant to this collection
of information that is otherwise not
publicly available, including in
connection with examinations or
investigations, the SBS Entity can
request the confidential treatment of the
information.678 If such a confidential
treatment request is made, the
Commission anticipates that it would
keep the information confidential,
subject to the provisions of applicable
law; 679 whether any material is
confidential is determined pursuant to
applicable law, including but not
limited to the Freedom of Information
Act and Commission rules governing
requests for confidential treatment.
With respect to the other information
collected under the rule amendments
and new rules, the firm can request the
confidential treatment of the
information.680 If such a confidential
treatment request is made, the
Commission anticipates that it would
keep the information confidential,
subject to the provisions of applicable
law; 681 whether any material is
confidential is determined pursuant to
applicable law, including but not
limited to the Freedom of Information
Act and Commission rules governing
requests for confidential treatment.
G. Retention Period for Recordkeeping
Requirements
For all Covered SRO Forms and for
Rule 19b–4(e), records of these
collections of information must be
retained for at least five years, the first
two years in an easily accessible place,
pursuant to Rule 17a–1.682
Rule 17a–4 specifies the required
retention periods for a broker-dealer,
including an OTC derivatives dealer.683
678 See

17 CFR 200.83.
e.g., 5 U.S.C. 552 et seq.; 15 U.S.C. 78x
(governing the public availability of information
obtained by the Commission). See also Risk
Mitigation Adopting Release 85 FR at 6389–90.
680 See 17 CFR 200.83; 17 CFR 240.24b–2. For
Rule 15fk–1(c)(2)(ii)(A), SBS Entities may request
confidential treatment for their CCO reports
pursuant to Exchange Act Rule 83.
681 See, e.g., 5 U.S.C. 552 et seq.; 15 U.S.C. 78x
(governing the public availability of information
obtained by the Commission).
682 17 CFR 240.17a–1.
683 17 CFR 240.17a–4.
679 See,

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7329

Rule 18a–6 specifies the required
retention periods for non-broker-dealer
SBSDs and non-broker-dealer
MSBSPs.684 Under these two rules,
many of the required records must be
retained for three years, while certain
other records must be retained for
longer periods.
X. Economic Analysis
The Commission is mindful of the
costs imposed by and the benefits
obtained from our rules. Section 2(b) of
the Securities Act,685 section 3(f) of the
Exchange Act,686 and section 2(c) of the
Investment Company Act of 1940 687
require us, when engaging in
rulemaking that requires us to consider
or determine whether an action is
necessary or appropriate in or consistent
with the public interest, to consider, in
addition to the protection of investors,
whether the action will promote
efficiency, competition and capital
formation. In addition, section 23(a)(2)
of the Exchange Act requires us, when
adopting rules under the Exchange Act,
to consider the impact that any new rule
would have on competition and to not
adopt any rule that would impose a
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Exchange Act.688
Where possible, we have attempted to
quantify the costs and benefits expected
to result from the amendments to the
submission or posting requirements.
However, in some cases we have been
unable to quantify the economic effects
because we lack the information
necessary to provide an estimate. For
example, we do not quantify the benefit
to the general public of improved access
to public filings made available in
structured format.
This section discusses the benefits
and costs of the amendments, as well as
their potential effects on efficiency,
competition, and capital formation.
Some of the amendments are, however,
technical, so they will likely not have
significant economic effects.689
684 17

CFR 240.18a–6.
U.S.C. 77b(b).
686 15 U.S.C. 78c(f).
687 15 U.S.C. 80a–2(c).
688 15 U.S.C. 78w(a)(2).
689 As stated in section II.G. above, the
Commission is adopting a technical amendment to
conform its Informal and Other Procedures to the
changes adopted herein to Rules 6a–1, 6a–2, and
6a–3 with respect to Form 1 filings and to Rule 6a–
4 with respect to Form 1–N filings required to be
submitted to the Commission electronically. The
Commission is also adopting a number of
amendments to the FOCUS Report that will
generally have no impact on or reduce the ongoing
burden on filers because they will generally reduce
questions about where and how to report items on
the form.
685 15

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A. Broad Economic Considerations
Commission rules require or provide
the option for the filing in paper of
certain forms and filings, including
applications of entities seeking to
register with the Commission as a
national securities exchange (or seeking
an exemption from such registration
based on limited volume) or as a
national securities association as well as
amendments to these initial
applications, reports regarding the
listing and trading of new derivative
securities products, clearing agency
registration and updates, annual brokerdealer audited reports and risk
assessment reports, and certain clearing
agency supplemental materials. Other
Commission rules require submission
by email or do not specify the format in
which a requirement should be
satisfied, such as notices of changes in
SRO membership.
By requiring the electronic
submission on the Commission’s
EDGAR system or website posting of: (1)
the Covered SRO Forms; (2) the
information posted under Rule 19b–4(e);
(3) the annual reports and related
annual filings filed by broker-dealers,
OTC derivatives dealers, SBSDs, and
MSBSPs; and (4) other notices and
reports from broker-dealers, SBSDs,
MSBSPs, and Registered Entities
(including Forms 17–H and Form X–
17A–19) (‘‘the affected documents’’),
and by requiring certain of the affected
documents to be provided, where
appropriate, in a structured, machinereadable data language, the amendments
seek to streamline the submission
process, and facilitate the transmission
and effective use of submitted
information. The amendments to certain
Exchange Act rules and the affected
documents are expected to increase the
efficiency of, and remove certain costs
related to ongoing compliance with, the
existing requirements. The discussion
below addresses the potential economic
effects of the amendments, including
their likely costs and benefits as well as
the likely effects of the amendments on
efficiency, competition, and capital
formation, relative to the economic
baseline, which consists of the filing
practices in existence today.
We anticipate that the amendments
that require electronic submission or
posting of documents that are currently
filed in paper would not result in an
increase in filing costs, and in some
cases result in cost savings to reporting
entities on an ongoing basis as a result
of overall reduction in internal time
burdens and the elimination of the
printing and mailing expenses
associated with paper filing. We

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recognize that entities that do not
presently use EDGAR to comply with
other reporting obligations would incur
an incremental cost of initial transition
to electronic submission on EDGAR.690
However, notwithstanding these initial
transition costs, we anticipate that
reporting entities would realize cost
savings from electronic submission on
EDGAR. With respect to the structured
data requirements, and specifically the
Inline XBRL reporting requirements,
entities subject to Inline XBRL reporting
requirements under the rules will incur
ongoing costs associated with the
requirement to encode and report
information in Inline XBRL, and entities
that do not presently use Inline XBRL
will incur additional costs associated
with the initial implementation of Inline
XBRL compliance processes and/or the
purchase of third-party Inline XBRL
filing preparation services or
software.691
Compared to paper filing, electronic
submission or posting information
directly to a website can expedite the
availability of public disclosures.
Improving the speed of disclosure to the
public improves the price efficiency of
markets by improving the timeliness of
information available to market
participants. Electronic submission or
posting will also facilitate the
Commission’s ability to oversee
compliance with the securities laws and
its oversight of securities markets
making this information available to the
Commission quicker, with added and
more accessible functionality for
Commission staff to review, analyze,
and respond to, as necessary. The
structured data requirements under the
amendments will augment these effects,
allowing the Commission—and, where
applicable, the public—to draw upon
comparable information from other
reporting periods and from other
690 See

supra section IX.
infra section X.C.2.b. Similar structured
data implementation costs will not result from most
of the custom XML requirements, because affected
entities will have the option of inputting their
information in fillable forms, which EDGAR will
then convert into the custom XML data language.
However, structured data implementation costs will
arise in connection with the custom XML
requirement for information posted under Rule
19b–4(e), because the SRO will post the information
on its website rather than on the EDGAR system
(and its fillable form capabilities), and in
connection with the custom XML requirements on
Forms 1 and CA–1. The Commission expects
exchanges and clearing agencies will have the
requisite sophistication to encode their disclosures
in custom XML and submit the custom XML
documents to EDGAR directly (rather than
manually completing lengthy fillable forms to be
converted into custom XML documents). See infra
section X.C.2.b; see also supra section IX.D.6.
691 See

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disclosing entities in assessing the
reported disclosures.692
To implement the structured data
requirements, the Commission must
indicate particular data languages for
filers to use. XBRL is an open-source
data language that allows data elements
to be stored and then read by machine,
leading to an order of magnitude
increase in process efficiencies.
Similarly, custom XML-based data
languages, which are more appropriate
for simpler forms, are built on the opensource XML format and also enable
machine readability. Both data
languages are subject to continuous
evolution and are sufficiently flexible to
allow such evolution. Technology
continuously evolves, so that any
method of file storage—whether paper,
or any electronic file format—eventually
may become obsolete. Data languages,
too, can be subject to obsolescence,
though this is rarer. Once information is
in a format that is machine readable,
however, it can generate a variety of
different file formats as those options
evolve. As a result, should future data
languages arise, the Commission and
registrants will be in a better position to
make use of them because certain data
is already structured.
B. Baseline
The baseline against which the costs,
benefits, and the effects on efficiency,
competition, and capital formation of
the amendments are measured consists
of current requirements and practices
for structuring data. The economic
analysis appropriately considers
existing regulatory requirements,
including recently adopted rules, as part
of the economic baseline against which
the costs and benefits of the final
amendments are measured.693
692 As discussed further in section X.B.1, the
affected documents could be subject to requests for
confidential treatment. Whether any filed material
is confidential is determined pursuant to applicable
law, including but not limited to the Freedom of
Information Act and Commission rules governing
requests for confidential treatment. The public
would not directly use any confidential information
contained in these documents.
693 See, e.g., Nasdaq v. SEC, 34 F.4th 1105, 1111–
15 (D.C. Cir. 2022). This approach also follows SEC
staff guidance on economic analysis for rulemaking.
See SEC Staff, Current Guidance on Economic
Analysis in SEC Rulemaking (Mar. 16, 2012),
available at https://www.sec.gov/divisions/riskfin/
rsfi_guidance_econ_analy_secrulemaking.pdf (‘‘The
economic consequences of proposed rules
(potential costs and benefits including effects on
efficiency, competition, and capital formation)
should be measured against a baseline, which is the
best assessment of how the world would look in the
absence of the proposed action.’’); id. at 7 (‘‘The
baseline includes both the economic attributes of
the relevant market and the existing regulatory
structure.’’). The best assessment of how the world
would look in the absence of the proposed or final
action typically does not include recently proposed

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One commenter expressed concern
about the need to concurrently comply
with the final amendments and ‘‘other
Commission initiatives that firms are
implementing.’’ 694 Although no
commenter pointed to specific rules
affecting the benefits and costs of these
amendments, we have considered the
potential effects on entities that are
implementing other recently adopted
rules during the compliance period for
these amendments. Recently adopted
rules that may place compliance
obligations on some of the same entities
with obligations under these
amendments include the Settlement
Cycle Adopting Release,695 the
Beneficial Ownership Adopting
Release,696 the Rule 10c–1a Adopting
Release,697 the Short Position Reporting
actions, because that would improperly assume the
adoption of those proposed actions.
694 See SIFMA 5/22/2023 Letter at 14
(commenting on ‘‘the time it will take firms to hire
and train staff, identify and retain service providers
and software, overhaul their systems, and engage in
robust testing with the Commission, as well as
attend to the numerous other Commission
initiatives that firms are implementing (e.g., T+1)’’).
Although the date of the T+1 transition has passed,
see infra note 704 for relevant compliance and filing
dates, we consider it and other recently adopted
rules in this analysis. See also supra section IV.A.
for a discussion of phased compliance dates.
695 Shortening the Securities Transaction
Settlement Cycle, Release No. 34–96930 (Feb. 15,
2023) [88 FR 13872 (Mar. 6, 2023)] (‘‘Settlement
Cycle Adopting Release’’). The rules and rule
amendments adopted in the Settlement Cycle
Adopting Release shorten the standard settlement
cycle for most broker-dealer transactions from two
business days after the trade date to one business
day after the trade date. To facilitate an orderly
transition to a shorter settlement cycle, a new rule
also establishes requirements related to completing
allocations, confirmations, and affirmations no later
than the end of trade date for the processing of
institutional transactions subject to the rule;
requires registered investment advisers to make and
keep records of each confirmation received, and of
any allocation and each affirmation sent or
received, with a date and time stamp for each
allocation and affirmation indicating when it was
sent or received; and requires clearing agencies that
provide a central matching service to establish,
implement, and enforce policies and procedures
reasonably designed to facilitate straight-through
processing and to file an annual report regarding
progress with respect to straight-through
processing. With certain exceptions, the rule had a
compliance date of May 28, 2024. See Settlement
Cycle Adopting Release, sections VII.
696 Modernization of Beneficial Ownership
Reporting, Release No. 33–11253 (Oct. 10, 2023) [88
FR 76896 (Nov. 7, 2023)] (‘‘Beneficial Ownership
Adopting Release’’). Among other things, the
amendments generally shorten the filing deadlines
for initial and amended beneficial ownership
reports filed on Schedules 13D and 13G, and
require that Schedule 13D and 13G filings be made
using a structured, machine-readable data language.
The amendments became effective Feb. 5, 2024.
Compliance with the new filing deadlines for
Schedule 13G was not required before Sept. 30,
2024, and the rule’s structured data requirements
have a one-year implementation period ending Dec.
18, 2024. Beneficial Ownership Adopting Release,
section II.G.
697 Reporting of Securities Loans, Release No. 34–
98737 (Oct. 13, 2023) [88 FR 75644 (Nov. 3, 2023)]

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Adopting Release,698 Clearing Agency
Governance Adopting Release,699 the
(‘‘Rule 10c–1a Adopting Release’’). This rule
requires any covered person who agrees to a
covered securities loan on behalf of itself or another
person to report specified information about the
covered securities loan to a registered national
securities association (currently FINRA is the only
registered national securities association)—or rely
on a reporting agent to do so—and requires the
registered national securities association to make
certain information it receives available to the
public. Covered persons will include market
intermediaries securities lenders, and brokerdealers, while reporting agents include certain
brokers, dealers, or registered clearing agencies. The
rule’s compliance dates require that the registered
national securities association propose rules
pursuant to Rule 10c–1a(f) by May 2, 2024, and the
proposed rules shall be effective no later than Jan.
2, 2025; that covered persons report Rule 10c–1a
information to a registered national securities
association on or by Jan. 2, 2026 (which requires
that the registered national securities association
have implemented data retention and availability
requirements such for reporting); and that the
registered national securities association publicly
report Rule 10c–1a information by Apr. 2, 2026.
Rule 10c–1a Adopting Release, section VIII.
698 Short Position and Short Activity Reporting by
Institutional Investment Managers, Release No. 34–
98738 (Oct. 13, 2023), [88 FR 75100 (Nov. 1, 2023)]
(‘‘Short Position Reporting Adopting Release’’).
Under the new rule, institutional investment
managers that meet or exceed certain specified
reporting thresholds are required to report, on a
monthly basis using the related form, specified
short position data and short activity data for equity
securities. The compliance date is Jan. 2, 2025. See
Short Position Reporting Adopting Release, section
VI. In addition, the Commission adopted an
amendment to the national market system (‘‘NMS’’)
plan governing the consolidated audit trail (‘‘CAT’’)
created pursuant to the Exchange Act to require the
reporting of reliance on the bona fide market
making exception in the Commission’s short sale
rules. The Commission published the text of the
amendment to the NMS plan governing the CAT
(‘‘CAT NMS Plan’’) in a separate notice. The
compliance date for the amendment to the CAT
NMS Plan is July 1, 2025. See Notice of the Text
of the Amendment to the National Market System
Plan Governing the Consolidated Audit Trail for
Purposes of Short Sale-Related Data Collection,
Release No. 34–98739 (Oct. 13, 2023) [88 FR 75079
(Nov. 1, 2023)].
699 Clearing Agency Governance and Conflicts of
Interest, Exchange Act Release No. 34–98959 (Nov.
16, 2023) [88 FR 84454 (Dec. 5, 2023)] (‘‘Clearing
Agency Governance Adopting Release’’). The
Clearing Agency Governance Adopting Release
establishes Rule 17Ad–25 for new governance
requirements for registered clearing agencies. These
include requirements for independent directors and
for the composition of a registered clearing agency’s
board of directors, nominating committee, and risk
management committee; requirements to identify
and document existing or potential conflicts of
interest involving directors or senior managers, and
mitigate or eliminate and document the mitigation
or elimination of such conflicts; and requirements
for policies and procedures obligating directors to
report conflicts of interest, managing risks from
relationships with service providers, and requiring
boards to solicit, consider, and document their
consideration of the views of participants and other
relevant stakeholders. The compliance date for Rule
17Ad–25 is Dec. 5, 2024, except that the
compliance date for the independence requirements
of the board and board committees in Rules 17Ad–
25(b)(1), (c)(2), and (e) is Dec. 5, 2025. See Clearing
Agency Governance Adopting Release, section III.

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7331

Treasury Clearing Adopting Release,700
the Rule 605 Adopting Release,701 the
Customer Notification Adopting
Release,702 the Tick Size and Access Fee
700 Standards for Covered Clearing Agencies for
U.S. Treasury Securities and Application of the
Broker-Dealer Customer Protection Rule with
Respect to U.S. Treasury Securities, Release No. 34–
99149 (Dec. 13, 2023) [89 FR 2714 (Jan. 16, 2024)]
(‘‘Treasury Clearing Adopting Release’’). Among
other things, the amendments require covered
clearing agencies for U.S. Treasury securities to
have written policies and procedures reasonably
designed to require that every direct participant of
the covered clearing agency submit for clearance
and settlement all eligible secondary market
transactions in U.S. Treasury securities to which it
is a counterparty. The compliance date was Mar. 18,
2024, for covered clearing agencies to file any
proposed rule changes pursuant to Rules 17Ad–
22(e)(6)(i), 17Ad–22(e)(18)(iv)(c), and 15c3–3,
which must be effective by Mar. 31, 2025. With
respect to the changes to Rule 17Ad–
22(e)(18)(iv)(A) and (B), (i) covered clearing
agencies were required to file any proposed rule
changes regarding those amendments no later than
June 14, 2024, and (ii) those changes must be
effective by Dec. 31, 2025, for cash market
transactions encompassed by section (ii) of the
definition of an eligible secondary market
transaction, and by June 30, 2026, for repo
transactions encompassed by section (i) of the
definition of an eligible secondary market
transactions. Finally, the Commission amended the
broker-dealer customer protection rule to permit
margin required and on deposit with covered
clearing agencies for U.S. Treasury securities to be
included as a debit in the reserve formulas for
accounts of customers and proprietary accounts of
broker-dealers, subject to certain conditions.
Compliance by the direct participants of a U.S.
Treasury securities covered clearing agency with
the requirement to clear eligible secondary market
transactions is not required until Dec. 31, 2025, and
June 30, 2026, respectively, for cash and repo
transactions. See Treasury Clearing Adopting
Release, section III.
701 Disclosure of Order Execution Information,
Release No. 34–99679 (Mar. 6, 2024) [89 FR 26428
(Apr. 15, 2024)] (‘‘Rule 605 Adopting Release’’). The
Commission adopted amendments to rules
requiring disclosures for order executions in NMS
stocks, including expanding the scope of reporting
entities, modifying the scope of orders covered by
the rule, and modifying the information required to
be reported under the rule. The rule had an
effective date of June 14, 2024, and, with a few
exceptions, a compliance date of Dec. 14, 2025. See
Rule 605 Adopting Release, section VII.
702 Regulation S–P: Privacy of Consumer
Financial Information and Safeguarding Customer
Information, Release Nos. 34–100155; IA–6604; IC–
35193 (May 15, 2024) [89 FR 47688 (June 3, 2024)]
(‘‘Customer Notification Adopting Release’’). The
Commission amended Regulation S–P to require
brokers, dealers, funding portals, investment
companies, registered investment advisers, and
transfer agents registered with the Commission or
another appropriate regulatory agency to adopt
written policies and procedures for incident
response programs to address unauthorized access
to or use of customer information. These must
include procedures for providing timely
notification to individuals affected by an incident
involving sensitive customer information with
details about the incident and information designed
to help affected individuals respond appropriately.
Among other things, the amendments also extended
to transfer agents the requirements to safeguard
customer records and information, and they
broadened the scope of the information covered by
those requirements. The compliance date for larger

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Adopting Release,703 and the Recovery/
Wind-Down Adopting Release.704

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entities is Dec. 3, 2025, and June 3, 2026, for
smaller entities. See Customer Notification
Amendments, section II.F
703 Regulation NMS: Minimum Pricing
Increments, Access Fees, and Transparency of
Better Priced Orders, Release No. 34–101070 (Sept.
18, 2024) [89 FR 81620 (Oct. 8, 2024)] (‘‘Tick Size
and Access Fee Adopting Release’’). These
amendments introduce one minimum pricing
increment that is less than $0.01, i.e., $0.005, for
quotes and orders priced $1.00 or more for NMS
stocks that have a time weighted average quoted
spread of $0.015 or less. The amendments also
reduce the access fee caps under Reg NMS Rule 610
and require national securities exchanges to make
the amounts of all fees and rebates determinable at
the time of trade execution. The amendments also
accelerate the implementation of the round lot and
odd-lot information definitions adopted in 2020
and add information about the best odd-lot order to
the definition of odd-lot information. The
amendments are effective Dec. 9, 2024. For Rules
610 and Rule 612, and the round lot definition, the
compliance date will be Nov. 3, 2025. For odd-lot
information, the compliance date will be May 1,
2026. See Tick Size and Access Fee Adopting
Release, section VI.
704 Covered Clearing Agency Resilience and
Recovery and Orderly Wind-Down Plans, Release
No. 34–101446 (Oct. 25, 2024) (‘‘Recovery/WindDown Adopting Release’’). These amendments add
new requirements related to the collection of
intraday margin by a covered clearing agency
(‘‘CCA’’) and the use of substantive inputs in its

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1. Affected Entities
The entities primarily affected by the
requirements include the filers or
submitters of the affected documents
and the users of the affected documents.
Other affected entities include third
parties that may be involved with the
preparation and filing or submission of
the affected documents and in
facilitating the use of structured data
filed or submitted with the Commission,
as well as parties that may indirectly
benefit from the use of the affected
documents by others.
Filers or Submitters of Affected
Documents
Entities that file or submit the affected
documents include SROs, including:
risk-based margin system. They also establish
required elements of a CCA’s recovery and orderly
wind-down plan. The effective date is Jan. 17, 2025.
Each covered clearing agency will be required to
file with the Commission any proposed rule
changes required under Rule 19b–4 and any
Advance Notices required under Title VIII of the
Dodd-Frank Act and Rule 19b–4(n) no later than
Apr. 17, 2025. The proposed rule changes and the
Advance Notices must be effective by Dec. 13, 2025.
See Recovery/Wind-Down Adopting Release,
section III.

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national securities exchanges and
exempt exchanges; notice-registered
Security Futures Product Exchanges;
registered national securities
associations; and registered and exempt
clearing agencies. Filers or submitters of
the affected documents also include
broker-dealers and SBS Entities (and
certain affiliates thereof).705

705 Not all of the affected documents listed for a
particular entity type below apply to every entity
that falls within that entity type. For details on the
subsets of affected entities that file or submit
particular affected documents, see supra section IX.
With particular respect to SBS Entities, the counts
above include, as of June 21, 2024, 10 SBS Entities
that relied on orders granting substituted
compliance under Exchange Act Rule 3a71–6 in
complying with the requirements under Exchange
Act Rule 15fk–1, 9 non-bank SBS Entities that
relied on orders granting substituted compliance
under Exchange Act Rule 3a71–6 in complying with
the reporting requirements under Exchange Act
Rule 18a–7(c), and 19 SBS Entities that relied on
orders granting substituted compliance under
Exchange Act Rule 3a71–6 in complying with the
notice requirements under Exchange Act Rule 15fi–
3. See Substituted Compliance Notices, available at
https://www.sec.gov/tm/Substituted-complianceNotices.

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7333

Affected Documents and Affected Filers or Submitters
Type of Affected Filer or Submitter

FormX-17A-5 Part
III
Form 17-H
FOCUS Report Part
II
FOCUS Report Part
IIA
FOCUS Report Part
IIC
Form 1
Form 1-N
Form X-15AA-1;
Form X-15AJ-l;
Form X-15AJ-2
Form CA-I
Rule 17a-22
materials
Form X-17A-19
Form 19b-4(e)

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VDN
CCO Report
ANE Exception
Notice

Broker-dealers (including OTC derivatives
dealers) and non-bank SBS Entities
Broker-dealers (including OTC derivatives
dealers)
Broker-dealers (including OTC derivatives
dealers) and non-broker-dealer SBS Entities
Broker-dealers (including OTC derivatives
dealers)
Bank SBS Entities

24 as of 12/31/23
2 as of 12/31/23
1 as of 12/31/23

Registered and exempt clearing agencies

13 (11 operational)
as of 12/31/23
8 (6 operational) as
of 12/31/23
25 as of 12/31/23

Registered clearing agencies
National securities exchanges and registered
national securities associations
National securities exchanges

24 as of 12/31/23
53 as of 6/21/24
53 as of 6/21/24
24 (estimated) as of
12/31/23

SBS Entities
SBS Entities
Majority-owned affiliates of Relying Entities
that are either registered SBSDs or registered
brokers that meets certain capital and other
requirements

706 See supra section IX.F. As stated above in
section X.A, whether any filed material is
confidential is determined pursuant to applicable
law, including but not limited to the Freedom of
Information Act and Commission rules governing
requests for confidential treatment.

20:42 Jan 18, 2025

2,946 as of
12/31/23
30 as of 6/21/2024

National securities exchanges
Security futures product exchanges
Registered national securities associations

Users of Affected Documents
The entities that use (e.g., examine,
store, analyze) each affected document
vary based on whether the particular
document is publicly available.706 If a
document is confidential, only the
Commission (and, in certain cases, other
regulators and regulatory organizations)
will be able to directly access and use
the documents. Documents that are not
confidential will be publicly available,
and as such can be directly used by
public entities in addition to the
Commission, such as investors and

VerDate Sep<11>2014

Filer or Submitter
Count
3,267 as of
12/31/23
Approximately 241
as of 12/31/23
486 as of 12/31/23

Jkt 265001

other market participants, financial and
market analysts, financial press, and
other regulatory agencies or
organizations.707
Third-Party Service Providers
In addition to the preparers and users
of the affected documents, the other
entities affected by the rule amendments
are third-party service providers that
707 See, e.g., Arun Gupta, supra note 479 (Federal
Reserve Board staff research paper using balance
sheet data from Form X–17A–5 Part III to examine
the internal capital markets of dealer banks); K.
Srinivasan, The Securitization Flash Flood, (July
27, 2016; rev. June 4, 2024), available at https://
papers.ssrn.com/sol3/papers.cfm?abstract_
id=2814717 (academic research paper using data
from Form X–17A–5 Part III to assess repo activities
of large broker-dealers) (retrieved from SSRN
Elsevier database).

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assist in electronic filing and, in some
cases, structuring, of regulatory
documents and help facilitate the use of
structured data. As discussed in further
detail below, the cost to filers or
submitters of the amended rules
includes, in some instances, the cost of
paying third-party service providers to
prepare electronic and structured
documents.708 Conversely, such thirdparty service providers will benefit from
increased demand for electronic filing
and structured data services under the
amended rules.
With particular respect to structured
data, entities currently subject to
structured data requirements under
Commission rules often pay third-party
708 See

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service providers to structure their
disclosures, or to license structuring
compliance software that allows filers or
submitters to structure their disclosures
internally. The specific amounts paid to
third-party providers of structured data
compliance services and/or software
vary significantly based on a number of
factors, such as the particular filing or
submission on which structured data is
required, the number of data points to
be structured, the size of the filer or
submitter, the industry to which the
filer or submitter belongs, the number of
individual users of the structured data
compliance software, and the extent to
which the structuring is fully
outsourced. For example, smaller
reporting companies are particularly
likely to fully outsource their structured
data preparation requirements to thirdparty service providers, leading to
different cost dynamics than other
companies that license third-party
structured data preparation software
and structure their disclosures inhouse.709 Based on the Staff’s
understanding of third-party structured
data compliance pricing, smaller filers
typically pay between $1,500 and
$5,000 per year for third-party
structured data compliance services
and/or software, while larger filers
typically pay between $5,000 and
$30,000 per year for such services and/
or software.710
In some cases, rather than use a thirdparty structured data compliance
service or software provider, filers or
submitters will have already structured
their data in-house, independently of
any Commission disclosure
requirements. For example, rather than
paying third-party structured data
compliance service providers, some
filers or submitters use ERP systems or
other data management platforms that
include a data structuring
component.711 In some instances, filers
709 See supra note 246 (stating that ‘‘for the sake
of compliance, many firms, especially smaller firms
that lack extensive resources, have outsourced the
creation and filing process. . .’’). See also infra
section X.C.2.b (discussing a cost survey conducted
by the Association of International Certified
Professional Accountants, in which 1,032 smaller
reporting companies reported full outsourcing of
their XBRL structuring requirements).
710 Some compliance service providers publicly
disclose or advertise pricing information on their
websites. See, e.g., EDGAR Filing Services,
Advanced Comp. Innovations, Inc., http://
www.edgar-services.com/ (last visited Apr. 3, 2024).
Other compliance service providers do not publicly
disclose pricing information on their websites,
instead requiring individual pricing consultations.
See also infra section X.C.2.b.
711 See, e.g., Feng Guo et al.; Enterprise Resource
Planning Systems and XBRL Reporting Quality, 35
J. Info. Sys. 77, Sept. 1, 2021 (defining ERP systems
as ‘‘large-scale, modularly packaged information
systems that have been widely adopted by midsize

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or submitters of a custom XML
document may already be using Inline
XBRL to structure similar data for
internal business purposes (such as
through the use of ERP systems).712
Furthermore, companies that are
affiliated with one another may be able
to leverage each other’s compliance
software licenses or service agreements
and experience in complying with the
structured data requirements.
In addition, with particular respect to
custom XML requirements on EDGAR
forms, some filers or submitters may
comply by inputting their disclosures
into fillable web forms on the EDGAR
website; EDGAR then converts these
inputted disclosures into the applicable
custom XML data language. In such
instances, filers or submitters forgo the
cost of paying third-party structured
data compliance service providers. With
respect to the rule amendments, because
use of the fillable form permits filers or
submitters to forgo the costs of
structuring, we expect most entities
affected by the custom XML
requirements will opt to use fillable
forms rather than structure directly in
custom XML.
Other filers or submitters of custom
XML documents choose not to use the
fillable web form; instead, they structure
their disclosures in the applicable
custom XML data language and file or
submit that structured custom XML
document on EDGAR. These filers or
submitters typically incur
implementation costs to integrate any
new or updated custom XML schemas
into their data systems, and then incur
decreased structured data costs after
such integration. Such filers or
submitters may find direct submission
in custom XML beneficial, because it
allows for greater automation for filing
or submitting already structured data
without the need for a final manual step
of converting structured data into
unstructured text to be typed into
fillable web fields. For this reason, the
Commission expects the SROs that file
Form 1 and Form CA–1, because they
are likely to have existing data
management systems (or have the
internal resources and technical
capability to establish such systems)
that cover some of the disclosures
required to be structured in custom
XML, will opt to structure disclosures
directly in custom XML rather than
using the fillable EDGAR web form.713
and larger firms in recent decades’’ and stating that
‘‘most ERP systems integrate an eXtensible Business
Reporting Language (XBRL) component in their
core modules. . .’’).
712 See supra sections II.A.3 and II.D.5.
713 Such disclosures could include, for example,
schedules of fees (Exhibit H to Form 1), lists of

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Nonetheless, providing both the fillable
web form option and the direct custom
XML structuring option for the custom
XML requirements in the rule, as is
done for most other custom XML forms
on EDGAR, will provide useful
flexibility for any current or future
affected entities that opt to take an
approach that differs from our
preliminary assumptions, without
compromising the usefulness and
accessibility of the resulting disclosures.
While not required for structured data
use, some data users (including some
investors and analysts) pay third-party
service providers for software that can
facilitate their usage and analysis of
structured data. As with structured data
compliance, the specific amounts paid
for third-party structured data research
software vary significantly based on a
number of factors, such as the number
of individual software users, whether
the user is an individual or an
enterprise, and the particular type of
functionality offered. Based on the
Staff’s understanding of third-party
structured data research software
pricing, data users typically pay
between $1,000 and $15,000 per year for
third-party structured data research
software.714 Other data users, especially
those with more technical experience
and sophistication, import structured
data into their own systems and analyze
the data without paying for third-party
software.715
2. Paper and Limited Electronic
Submission
Certain of the affected documents are
currently filed or submitted in paper
format. Specifically, the Commission’s
regulatory framework requires an entity
seeking to be registered as a national
securities exchange, as a clearing
agency, or as a security futures product
exchange, to file in a paper-based format
certain forms that are mandated by rules
under the Exchange Act. Filers are also
participants or applicants for participation (Exhibit
N to Form CA–1), and schedules of traded securities
(Exhibit N to Form 1).
714 Some research service providers publicly
disclose or advertise pricing information on their
websites. See, e.g., Calcbench, https://
www.calcbench.com/payment/pricing (last visited
Apr. 3, 2024); TagniFI, https://about.tagnifi.com/
pricing/ (last visited Apr. 3, 2024); FinDynamics,
https://findynamics.com/subscriptions/ (last visited
Apr. 3, 2024). Other research service providers do
not publicly disclose pricing information on their
websites, instead requiring individual pricing
consultations.
715 Structured data filed with or submitted to the
Commission (other than structured data filed or
submitted on non-public documents) are freely
available to access and download. See DERA Data
Library, available at https://www.sec.gov/dera/data;
Structured Disclosure RSS Feeds, available at
https://www.sec.gov/structureddata/rss-feedssubmitted-filings.

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required to submit paper-based
amendments to their respective forms.
The forms required to be filed in paper
format include Forms 1, 1–N, X–15AA–
1, X–15AJ–1, X–15AJ–2, CA–1. Form
19b–4(e) also is required to be submitted
in paper format. In addition, paragraphs
(d)(6) of Rule 17a–5 and (c)(6) of Rule
18a–7 provide that broker-dealer and
SBS Entity annual reports, respectively,
must be sent to the Commission’s
principal office in Washington, DC, and
appropriate regional office or they may
be submitted to the Commission
electronically in accordance with
directions provided on the
Commission’s website. Some brokerdealers voluntarily file annual reports
electronically on EDGAR,716 and
instructions for doing so are posted on
the Commission’s website. For the 12
months ending December 31, 2023, the
Commission received 1,498 filings of
the annual reports in paper form and
1,769 electronically via EDGAR. The
proportion of annual reports filed
electronically has been steadily
increasing over the years since it was
first permitted in 2015.
OTC derivatives dealer annual reports
filed under Rule 17a–12 must be filed at
the Commission’s principal office under
paragraph (p) of that rule. Further, Rule
17h–2T permits quarterly and annual
risk assessment reports to be filed with
the Commission in paper-based format,
and Rule 17a–19 currently requires
every national securities exchange and
registered national securities association
to file a Form X–17A–19 with the
Commission in paper format at its
principal office. In some circumstances,
the Commission’s regulatory framework
requires or permits submission of
documentation by email. Specifically,
Exchange Act Rule 3a71–3(d)(1)(vi)
requires the Registered Entity to provide
the ANE Exception Notice by submitting
it to the electronic mailbox described on
the Commission’s website. Further,
notices made pursuant to Rule 15fi–3(c)
may be made via email or on EDGAR.
Annual compliance reports provided
pursuant to Rule 15fk–1(c) may be
716 We note that Commission staff previously
stated that it would not recommend enforcement
action to the Commission under Rule 17a–5 or Rule
17a–12 if a broker-dealer or OTC derivatives dealer
files the annual and supplemental reports required
under those rules electronically through the EDGAR
system in accordance with the instructions and
conditions contained on the Commission’s website
in lieu of filing them with the Commission in paper
form. See Letter to Kris Dailey Vice President, Risk
Oversight and Operational Regulation, FINRA, from
Michael Macchiaroli, Associate Director, Division,
Commission (Jan. 27, 2017), available at https://
www.sec.gov/divisions/marketreg/mr-noaction/
2017/finra-012717-electronic-filing-annualreports.pdf.

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submitted by an SBS Entity as a paper
or electronic submission.
In addition, current Rule 17a–22
under the Exchange Act requires that
within 10 days after issuing, or making
generally available, to its participants or
to other entities with whom it has a
significant relationship, such as
pledgees, transfer agents, or selfregulatory organizations, any material
(including, for example, manuals,
notices, circulars, bulletins, lists or
periodicals), a registered clearing agency
shall file three copies of such material
with the Commission.717 Commission
staff, however, released the Staff
Statement on COVID–19 flexibility in
early April 2020 and updated it in June
2020. Since that time, consistent with
the Updated Staff Statement, filers and
registrants have made alternate
arrangements for the delivery,
execution, and notarization of certain
filings, including filings to be made
pursuant to Rule 17a–22.718 These
alternate arrangements have included
electronic submission, similar to what is
being adopted.
When a paper filing is received, the
Commission staff scan it into PDF
format, and upload it to EDGAR or make
it available to Commission staff. For
some filings, such as broker-dealer’s
annual reports, this process can take an
average of several weeks from the date
of receipt of a paper filing until it is
scanned and the public portion
published on EDGAR, and the
confidential portion is available to
Commission staff.
3. Structured Data
Previously, four of the affected
documents could be filed or submitted
electronically using EDGAR—Form X–
17A–5 Part III, Form 17–H, VDNs, and
CCO reports.719 Form X–17A–5 Part III,
the facing page for annual reports
required to be filed with the
Commission under Exchange Act Rules
17a–5, 17a–12, and 18a–7 (which
generally must be audited), is filed by
broker-dealers (including OTC
derivatives dealers) and non-bank SBS
Entities; Form 17–H is filed by brokerdealers subject to paragraph (a) of Rule
17h–2T; and the VDNs and CCO reports
are submitted by SBS Entities. Each of
Form X–17A–5 Part III, and Form 17–H,
and the CCO reports was, when filed or
submitted electronically, partially
717 17

CFR 240.17a–22.
Staff Statement Regarding
Requirements for Certain Paper Submissions in
Light of COVID–19 Concerns (Apr. 2, 2020),
available at https://www.sec.gov/tm/papersubmission-requirements-covid-19; see also
Updated Staff Statement, supra note 7.
719 See supra sections IV.A, IV.B, V.C, and V.D.
718 Division

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7335

structured (i.e., machine-readable).720
None of the other affected documents
was previously structured, either in
whole or in part.
Form X–17A–5 Part III elicits
registrant and accountant identifying
information and includes an oath or
affirmation in a custom XML-based data
language specific to that form.721 As is
the case with most of the Commission’s
other custom XML forms, filers of Form
X–17A–5 Part III had (and will continue
to have) the option of manually
inputting information into a fillable
form that EDGAR subsequently converts
into the custom XML data language for
Form X–17A–5 Part III.722 Form X–17A–
5 Part III filers were then able (and will
continue to be able) to attach the
remaining documents required by the
applicable rules, including financial
statements and supplemental reports, in
unstructured formats such as PDF and
HTML.723
Form 17–H is similar to Form X–17A–
5 Part III in that its facing page, when
filed electronically through EDGAR, was
(and will continue to be) structured in
a custom XML-based data language
specific to Form 17–H.724 In addition,
Part II of Form 17–H, which consists of
securities and commodities position
disclosures for the filing broker-dealer’s
material associated persons, was (and
will continue to be) submitted in the
Form 17–H-specific custom XML when
filed electronically through EDGAR.725
Form 17–H filers have had (and will
continue to have) the option of
manually inputting Part I facing page
information and Part II positions
information into a fillable web form that
EDGAR subsequently converts into the
custom XML for Form 17–H.726
In addition, the CCO reports were
(and will continue to be), when filed
electronically through EDGAR, partially
structured in a custom XML-based data
language specific to the reports.727 SBS
720 More precisely, the CCO report filed on
EDGAR was accompanied by a custom XML
execution page with information about the
submitting SBSE and the submission. The CCO
report itself, however, was in unstructured PDF
format. See EDGAR Filer Manual Vol. II at 8.2.20.6.
721 See EDGAR X–17A–5 Part III Technical
Specification, available at https://www.sec.gov/
info/edgar/specifications/form-x-17a-5-xml-techspecs.htm.
722 See EDGAR Filer Manual Vol. II at 8.2.22.
723 See id.
724 See EDGAR 17–H Technical Specification,
available at https://www.sec.gov/info/edgar/
specifications/form-17-h-xml-tech-specs.htm.
725 See id.
726 See EDGAR Filer Manual, Volume II at 8.2.24.
727 See EDGAR SBS Entity Forms Technical
Specification, available at https://www.sec.gov/
info/edgar/specifications/form-sbs-entity-xml-techspecs.htm.

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Entities had (and will continue to have)
the option of manually inputting the
execution page information into a
fillable web form that EDGAR
subsequently converts into the custom
XML-based data language specific to
EDGAR submissions by SBS Entities.728
The broker-dealers (including OTC
derivatives dealers) and non-bank SBS
Entities that file Form X–17A–5 Part III
and, where applicable, Form 17–H, are
also subject to other structuring
requirements under Commission rules.
As discussed, all of these entities are
required to file FOCUS Reports under
Exchange Act Rule 17a–5, Rule 17a–12,
or Rule 18a–7, as applicable.729 Brokerdealers, SBSDs, MSBSPs, and OTC
derivatives dealers file these FOCUS
Reports using a fillable web form that
the relevant eFOCUS system converts
into a custom XML.730 In addition,
SBSDs and MSBSPs must file in EDGAR
Form SBSE, SBSE–A, or SBSE–BD, as
applicable, to register as an SBS Entity,
as well as amendments to those Forms
if the information in them is or has
become inaccurate or incomplete; Forms
SBSE, SBSE–A and SBSE–BD are
structured using a custom XML-based
data language specific to the form.731
Broker-dealers, SBSDs, MSBSPs, and
OTC derivatives dealers were not
previously subject to any Inline XBRL
requirements under Commission rules.
Since the publication of the proposing
release in March 2023, the Commission
has finalized rules with new structured
data obligations. These structured data
obligations, which are now part of the
baseline, may increase the familiarity
that some affected filers or submitters
have with EDGAR and custom XML
filing. Specifically, beginning in January
2025, any broker-dealers and registered
SBS Entities that are ‘‘institutional
investment managers’’ as defined in
section 13(f)(6)(A) of the Exchange Act,
and that meet the thresholds set forth in
Rule 13f–2 under the Exchange Act, will
be required to file in EDGAR monthly
728 See EDGAR Filer Manual, Volume II at
8.2.20.6. As stated above, the CCO report filed on
EDGAR was accompanied by a custom XML
execution page with information about the
submitting SBSE and the submission. The CCO
report itself, however, was in unstructured PDF
format.
729 See 17 CFR 240.17a–5; 17 CFR 240.17a–12; 17
CFR 240.18a–7.
730 See eFOCUS—Fin. & Operational Combined
Unif. Single Reports, https://www.finra.org/filingreporting/regulatory-filing-systems/efocus (last
visited Apr. 4, 2024); eFocus Filing Transmission,
https://www.finra.org/filing-reporting/focus/efocusfiling-transmission (last visited Apr. 4, 2024);
FINRA eFOCUS User Guide: Training and
Reference Manual, https://www.finra.org/sites/
default/files/p118798.pdf (last visited Apr. 4, 2024).
731 See EDGAR Filer Manual, Volume II at 8.2.19
and 8.2.20.

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short sale position and activity reports
requirements on Form SHO using a
custom XML-based language specific to
Form SHO.732 To the extent there is any
overlap between broker-dealers that are
‘‘institutional investment managers’’
and meet the thresholds associated with
Form SHO filing obligations, and
broker-dealers that file Form X–17A–5
Part III using paper rather than
EDGAR,733 those broker-dealers will
gain experience with custom XML
EDGAR filing as a result of the
rulemaking.734
Similarly, beginning with the twelvemonth period ending December 31,
2024, a limited subset of clearing
agencies (specifically, those clearing
agencies that provide a central matching
service) will be required to file annual
reports on straight-through processing
on EDGAR in Inline XBRL.735 This
experience with EDGAR and Inline
XBRL may, for those clearing agencies,
decrease the cost of compliance with
Inline XBRL requirements for Form CA–
1, relative to the costs described in the
Proposing Release.736
The affected documents previously
included only a limited amount of
structured data. For execution pages of
Form X–17A–5 Part III reports, Form
17–H reports and CCO reports filed or
submitted on EDGAR, the inclusion of
structured identifying information on
the facing page facilitates the filtering
and retrieval of reports from particular
subsets of filers or submitters. For Part
II of electronically submitted Form 17–
H reports, the inclusion of structured
material associated person disclosures
732 See 17 CFR 240.13f–2(a)(3); Short Position
Adopting Release at 75105 (stating that
‘‘institutional investment managers,’’ which will be
subject to Form SHO filing requirements, ‘‘typically
can include brokers and dealers, investment
advisers, banks, insurance companies, pension
funds and corporations’’).
733 SBS Entities and some broker-dealers already
have experience with EDGAR and custom XML
filing. SBS Entities file variants of Form SBSE on
EDGAR in custom XML. Broker-dealers that file
Form X–17A–5 Part III electronically do so on
EDGAR using custom XML for the execution page.
See Commission, ‘‘XML Technical Specifications,’’
available at https://www.sec.gov/edgar/filer/
technical-specifications#xml (last visited June 5,
2024).
734 The rule does not alter the compliance cost
estimates associated with the custom XML
requirements on Form X–17A–5 Part III, because, as
explained later in the economic analysis, the
Commission expects broker-dealers to comply with
the custom XML requirement by inputting their
disclosures into a fillable EDGAR web form rather
than structuring the disclosures themselves.
735 See 17 CFR 240.17ad–27(d); Settlement Cycle
Adopting Release at 13910.
736 See infra note 860. Clearing agencies that do
not provide a central matching service, as well as
national securities exchanges subject to Form 1
filing requirements, were not previously subject to
Inline XBRL requirements under the Commission’s
rules and do not have this experience.

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enables more efficient mathematical
calculations of the disclosed numerical
information. For any Structured
Documents or portions thereof under a
successful confidential treatment
request, such enhanced functionality
will be unavailable to parties other than
Commission staff; for all other
Structured Documents or portions
thereof, including those which are not
subject to a confidential treatment
request or for which the Commission
determined not to grant confidential
treatment, such enhanced functionality
will be available to Commission staff
and to the public.
C. Economic Effects
1. Benefits
a. Electronic Submission and Posting;
Revisions to the FOCUS Report
Electronic submissions can save time,
improve efficiency, and reduce errors.
After an initial setup cost described
below,737 these changes can potentially
reduce the cost for reporting entities
because the shift to electronic
submission can obviate the need for
printing costs and improve the
efficiency of filing preparation. In
addition, the improved accuracy, speed,
and efficiency of the documents
provided to the Commission can reduce
the costs associated with receiving and
processing submissions, in part by
reducing the time, processing, and
search costs relative to the manual
nature of non-electronic document
processing, and accordingly aid the
Commission’s examination and
oversight functions. For some filings,
such as broker-dealer annual reports,
eliminating the need to scan paper
documents could reduce processing
time by as much as several weeks. An
increase in the accuracy and timeliness
of processing submissions boosts the
efficiency of Commission document
review, processing, and quality
assurance. Furthermore, electronic
submissions allow reporting entities and
Commission staff to more easily access
or submit documents during disruptive
events—like the COVID–19 pandemic—
when their physical work facilities may
be inaccessible. Commenters were
nearly unanimous in their support of
electronic submission and posting
generally, and focused their comments
on the specific structured data
requirements.
The release also includes several
amendments designed to update the
FOCUS Report and related
requirements. First, the release amends
FOCUS Report Part II by adding data
737 See

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
fields to the income statement so firms
can report more complete data, updating
the CFTC Minimum Capital
Requirements section for consistency
with the CFTC’s Form 1–FR, and
updating the customer reserve and PAB
computations for consistency with
recent amendments to Rule 15c3–3a.
The Commission received comment in
favor of these amendments.738
Second, the Commission is aligning
the text in FOCUS Report Part IIC with
the text in FFIEC Form 031. Making
these amendments should reduce the
overall burden because information
input in the amended form will be
consistent with FFIEC Form 031 (i.e.,
the Call Report), which many Part IIC
filers are already required to
complete.739 The amendments also
remove ambiguity about how to
complete the Part IIC, which have
resulted in SEC staff receiving a number
of phone calls seeking assistance on
how to reconcile these
incompatibilities. The Commission
received comment agreeing with the
benefits and supporting these proposed
changes.740
Third, the Commission is requiring
only two of the three signature lines to
be signed on the FOCUS Report’s cover
page and allows these signatures to be
signed either manually or electronically.
Since the revised FOCUS Report was
adopted, it has come to the
Commission’s attention that obtaining
the signatures of all three principal
officers on or close to the same day may
be burdensome, especially for larger
firms with thousands of employees.
Therefore, the Commission is requiring
only two of the three principal officers’
signatures to balance the Commission’s
desire for individual accountability with
the burden on the filer. Reducing the
number of required signatures reduces
the burden of submitting FOCUS
reports. The use of electronic signatures
would also reduce the burden in the
long run because firms would not need
to obtain and store wet signatures,
especially due to the increase in remote
work. Commenters agreed with the
benefits of the use of electronic
signatures and the reduction in the
number of required signatures, with

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738 See

SIFMA 11/21/2023 Letter at 1–2.
the affected entities in this release, 29 filed
FOCUS Report Part IIC as of Dec. 31, 2023. See
supra section IX.C.9.
740 See SIFMA 5/22/2023 Letter at 1, OCC 5/22/
2023 Letter at 1, XBRL Letter at 1, Umbs Letter,
Pathiakis Letter, Till Letter, Anonymous 4/18/2023
Letter, Sage Letter, Kulodzik Letter, Jorgensen
Letter, Mack Letter, Anonymous 4/17/2023 Letter,
Wohlfahrt Letter, Brady Letter, McMahon Letter,
Smith Letter.
739 Of

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some suggesting further reducing the
number of required signatures.741
Finally, the Commission is requiring
OTC derivatives dealers to file the
FOCUS Report electronically on the SEC
eFOCUS system instead of in paper. The
SEC eFOCUS system offers benefits of
electronic filing of forms over paper,
reducing costs and making information
more easily usable and timely.
b. Structured Data
In general, the structured data
requirements will benefit investors and
markets by increasing the accessibility
and usability of the disclosures in the
Structured Documents, thereby
increasing transparency and insight into
the operations, governance,
management, financial condition, and
other characteristics of the affected
entities. Requiring machine-readability
for the disclosures will enable
significantly more efficient retrieval,
sorting, filtering, comparison,
aggregation, and other analysis of the
disclosures across reporting entities and
time periods. The Commission expects
the exact nature and magnitude of such
benefits will vary based on several
factors, which are discussed herein.
As discussed subsequently in further
detail, some commenters agreed that the
structured data requirements will
provide such benefits, while other
commenters did not. One commenter
stated that the structured data
requirements for forms, reports, and
notices provided by broker-dealers and
SBS Entities, coupled with the required
electronic filing or submission on
EDGAR, will promote greater
standardization and consistency in
reporting and facilitate investor
comparison and analysis of information
across different entities.742 Another
commenter stated that the machinereadability of the Structured Documents
will render them significantly easier,
faster, and more efficient to process than
unstructured PDF, HTML, or text
versions, will improve the accessibility
of the data for retrieval, aggregation, and
analysis, and will facilitate validation to
improve the quality of reported data.743
By contrast, one commenter stated
that XBRL requirements for brokerdealer reports will not provide benefits
that justify compliance burdens.744 The
commenter stated that, because
regulators receive periodic FOCUS
reports that are encoded as they have
been for decades, regulators do not need
741 See Wichkoski Letter, OCC 5/22/2023 Letter,
SIFMA 5/22/2023 Letter, Anonymous 4/17/23
Letter, and Wohlfahrt Letter.
742 See Wohlfahrt Letter.
743 See XBRL Letter at 3, 7, and 9.
744 See Integrated Solutions Letter at 2–3.

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7337

encoded (i.e., machine-readable) brokerdealer financial statements.745 The
Commission disagrees with the
commenter’s view, because the
amended rules include XBRL
requirements for the annual brokerdealer audited reports (Form X–17A–5
Part III), and those reports include
additional disclosure that the periodic
FOCUS reports do not include.746
Because regulators will be able to
analyze this additional information
much more efficiently when it is
provided in a structured, machinereadable format (rather than in paper or
PDF format), regulators—and ultimately
the market—will derive a significant
benefit from the Inline XBRL
requirement for Form X–17A–5 Part III.
The same commenter also stated that
customers of broker-dealers do not read
Form X–17A–5 Part III, and investors in
broker-dealers do not need Form X–
17A–5 Part III.747 The Commission
disagrees with this statement—there are
multiple examples of public market
participants using Form X–17A–5 Part
III information to the benefit of brokerdealer investors and customers.748
Another commenter stated that
structured data requirements will
provide no clear benefit and
emphasized that the use of Inline XBRL
for narrative-based reports in particular
will provide no material benefit.749
According to this commenter, the
benefits the Commission cited in the
proposal (e.g., keyword searching and
redlining) are not exclusive to
structured data languages like XBRL and
custom XML, because PDF documents
can also be searched and redlined.750
However, while PDF documents can be
searched and redlined, structuring
textual disclosures in Inline XBRL
enables users to perform targeted
searches and redline comparisons of
specific disclosure items, rather than
having to search through (or redline)
entire documents. For example, under
the rule amendments, a data user will be
able to search for a particular phrase of
interest within only the significant
accounting policies financial statement
footnote across all Form X–17A–5 Part
III filers, rather than having to search
the entirety of all Form X–17A–5 Part III
filings for that phrase, and manually
reviewing the results from each Form
X–17A–5 Part III filings to determine
which results were located in the
significant accounting policies footnote.
745 See

id. at 4.
supra sections IV.A and VII.A.
747 See Integrated Solutions Letter at 4.
748 See supra note 479.
749 See SIFMA 5/22/2023 Letter at 1, 6, and 7.
750 See id. at 6.
746 See

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This is an overall benefit to the market
and end users because the Commission
will be able to efficiently assess
common significant accounting policies
disclosures across all Form X–17A–5
Part III filers.
The commenter also stated that the
requirement to submit fillable web
forms on EDGAR in lieu of PDFs would
undermine the rule amendments’ goals
by removing efficiencies in firms’
existing systems (such using existing
systems to populate a PDF
automatically) and introducing
opportunities for human error.751 The
Commission disagrees. To the extent
that firms manually input data,
inputting values into a fillable form
would not incur substantially higher
costs and or opportunities for error
compared to inputting the same
information and submitting the form via
other means. To the extent firms
automatically populate forms by using
their own existing systems to create
XML files, the EDGAR Filer Manual
provides for submission of certain
filings in a custom XML-based data
language, which can be used to reach a
similar result.752 In addition, the
structured data requirement enables
EDGAR to perform technical validations
(i.e., programmatic checks to ensure the
documents are appropriately
standardized, formatted, and complete)
upon intake, thus improving the quality
of the filed data by decreasing the
incidence of errors (such as the
omission of values from fields that
should always be populated).753
Furthermore, allowing firms to submit
PDF documents would not achieve the
benefits associated with the structured
data requirements under the rule
amendments to the same extent. The
structured data requirements under the
rule amendments will increase the
accessibility and usability of the
disclosures in the Structured
Documents, for example by enabling
more efficient retrieval, sorting,
751 See

id. at 2, 11.
id. at 11 (suggesting, in the context of
VDNs, that the Commission allow firms to submit
a structured data file rather than filling in a web
form); see supra section V.C.2 (discussing the
option to use custom XML-based data language).
753 See, e.g., Semi-Annual Report to Congress
Regarding Public and Internal Use of MachineReadable Data for Corporate Disclosures (June 2024)
at 4, https://www.sec.gov/files/fdta-report-62024.pdf (explaining that technical validation rules
allow issuers to check for certain errors before the
machine-readable data is submitted, which can
streamline the compliance process by reducing
Commission staff time that would otherwise be
spent pinpointing and communicating the existence
of technical errors to issuers, and by reducing issuer
time that would otherwise be spent resolving such
errors and resubmitting the machine-readable data
file).

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752 See

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filtering, comparison, aggregation, and
other analysis of the disclosures,
thereby increasing transparency and
insight into the operations, governance,
management, financial condition, and
other characteristics of the affected
entities.
Structured Data Benefits
As an initial point of comparison,
some research on XBRL requirements
for public operating company financial
statement disclosures has found that
such requirements have mitigated
information asymmetry by reducing
information processing costs, thereby
facilitating access and analysis of the
disclosures on a large-scale basis.754
This reduction in information
processing cost has been observed to
facilitate the monitoring and analysis of
firms by external parties.
These external parties include
investors themselves, as well as other
entities that process firm disclosures
into conclusions that often influence
investors and markets; such entities
include financial analysts, data
aggregators, academic researchers and
financial media (collectively,
‘‘information intermediaries’’).755
Institutional investors are more likely to
access XBRL data directly, whereas
retail investors are more likely to benefit
from the use of XBRL data by
information intermediaries.756
754 See, e.g., Joung W. Kim, Jee-Hae Lim, & Won
Gyun No, The Effect of First Wave Mandatory XBRL
Reporting Across the Financial Information
Environment, 26 J. Info. Sys. 127, 127–53 (2012)
(finding evidence that ‘‘mandatory XBRL disclosure
decreases information risk and information
asymmetry in both general and uncertain
information environments’’).
755 See, e.g., N. Trentmann, ‘‘Companies Adjust
Earnings for Covid–19 Costs, But Are They Still a
One-Time Expense?’’, Wall St. J. (2020) (citing an
XBRL research software provider as a source for the
analysis described in the article); Bloomberg Lists
BSE XBRL Data, XBRL.org (Mar. 17, 2019), https://
www.xbrl.org/news/bloomberg-lists-bse-xbrl-data/;
R. Hoitash & U. Hoitash, Measuring Accounting
Reporting Complexity with XBRL, 93 Account. Rev.
259 (Jan. 1, 2018).
756 See, e.g., A. Lawrence, et al., Investor Demand
for Sell-Side Research, 92 Account. Rev. 123 (Mar.
1, 2017) (finding ‘‘the average retail investor
appears to rely on analysts to interpret financial
reporting information rather than read the actual
filings’’); but see S. Chi & D. Shanthikumar, Do
Retail Investors Use SEC Filings? Evidence from
EDGAR Search, (Nov. 8, 2018), available at https://
ssrn.com/abstract=3281234 (retrieved from SSRN
Elsevier database) (finding ‘‘retail investor trading,
both buying and selling, is significantly related to
EDGAR search for 10–K and 10–Q filings, more so
than to Google search,’’ especially for ‘‘the most
easily readable 10–K and 10–Q filings’’); see also N.
Brown, et al., How do Disclosure Repetition and
Interactivity Influence Investors’ Judgments?, 60 J.
Account. Res. 1775 (Dec. 2022) (‘‘Brown et al.
iXBRL study’’) (indicating that disclosure
interactivity, which is promoted by Inline XBRL,
may improve investors’ direct processing of
financial information).

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Regulators, including the Commission
and the Federal Deposit Insurance
Corporation (‘‘FDIC’’), have also been
observed to leverage XBRL disclosure
benefits in better fulfilling their
mandates.757 The Commission staff uses
XBRL data to efficiently analyze large
quantities of information in support of
risk assessment, rulemaking, and
enforcement activities, including as part
of its internally developed Financial
Statement Query Viewer and Inline
Viewer applications.758 The regulatory
use of XBRL is particularly relevant to
affected documents that are subject to
confidential treatment and thus only
accessible by the Commission and its
staff.759
The enhanced monitoring facilitated
by XBRL requirements has been
observed to influence the behavior of
firms relevant to governance and
compliance, including firms’ disclosure
and reporting choices. For example, one
study found that firms increase
quantitative footnote disclosures upon
implementation of detailed tagging
requirements.760 Also, multiple studies
757 With respect to Commission use of XBRL data,
see infra note 767. With respect to FDIC use of
XBRL data, see Meet Mark Montoya, Chief of Data
Strategy, FDIC, Xcential Co. (Sept. 29, 2021),
https://xcential.com/blog/meet-mark-montoyachief-data-officer-fdic/ (noting in an interview with
the FDIC’s Chief Data Officer that XBRL
requirements for quarterly bank call reports have
facilitated FDIC staff analysis of the regulated
banks); see also Government Use of Data
Standards—Conversation with the FDIC, XBRL US
(Sept. 2, 2020), https://xbrl.us/news/regulatorvideo/ (noting in an interview with the FDIC’s Chief
Data Officer that, ‘‘. . . Prior (to XBRL) the data that
the (FDIC) examiners used to examine the banks
was probably about 2–3 months old which is old
data . . . (with XBRL) the data can be pulled down
in real time’’); see also Lizhong Hao & Mark J.
Kohlbeck, The Market Impact of Mandatory
Interactive Data: Evidence from Bank Regulatory
XBRL Filings, 10 J. Emerging Tech. Acct. 41 (Dec.
2013) (finding that banks experienced a ‘‘reduction
in systematic risk in connection with filing their
regulatory reports in XBRL’’).
758 See, e.g., Semi-Annual Report to Congress
Regarding Public and Internal Use of MachineReadable Data for Corporate Disclosures (June
2024), https://www.sec.gov/files/fdta-report-62024.pdf (describing Commission staff use of
machine-readable data, including XBRL data, across
various Divisions and Offices); T. Knutson, As
XBRL in Financial Reporting Matures, Focus is on
Accuracy, CFO Dive (Feb. 25, 2020), available at
https://www.cfodive.com/news/xbrl-financialreporting-accuracy/572948/.
759 As stated above in sections X.A and X.B,
whether any filed material is confidential is
determined pursuant to applicable law, including
but not limited to the Freedom of Information Act
and Commission rules governing requests for
confidential treatment.
760 See Elizabeth Blankespoor, The Impact of
Information Processing Costs on Firm Disclosure
Choice: Evidence from the XBRL Mandate, 57 J.
Acct. Res. 919 (2019) (finding ‘‘firms increase their
quantitative footnote disclosures upon
implementation of XBRL detailed tagging
requirements designed to reduce information users’
processing costs,’’ and ‘‘both regulatory and non-

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have shown that XBRL requirements
have increased firms’ investment
efficiency by decreasing information
processing cost and improved effective
decision-making by managers, effects
that appear to be heightened for Inline
XBRL requirements.761
XBRL requirements have also been
observed to impact the timeliness and
effectiveness of firms’ disclosure
preparation and related processes. For
example, one study found XBRL to have
decreased audited report lags, especially
among firms with strong internal control
systems and no prior XBRL reporting
experience.762 Other studies have found
XBRL requirements to have improved
the timeliness of financial reports, with
such improvements limited to larger
firms only.763 For instance, one public
company executive stated that XBRL
facilitates his firm’s disclosure
regulatory market participants play a role in
monitoring firm disclosures,’’ suggesting ‘‘that the
processing costs of market participants can be
significant enough to impact firms’ disclosure
decisions’’); see also Kim, Jeong-Bon, Kim, Joung
W., &Lim, Jee-Hae, Does XBRL Adoption Constrain
Earnings Management? Early Evidence from
Mandated U.S. Filers, 36 Contemp. Acct. Res. 2610
(2019) (indicating that XBRL adoption ‘‘constrains
earnings management via discretionary accrual
choices’’).
761 See, e.g., Xin Cheng, et al., How Does
Information Processing Efficiency Relate to
Investment Efficiency? Evidence from XBRL
Adoption, 35 J. Info. Sys. 1 (2021) (finding firms
‘‘improve their investment efficiency after the
adoption of XBRL,’’ especially for firms that ‘‘have
inferior external monitoring, . . . operate in more
uncertain information environments, . . . and have
less readable financial reporting’’); see also Hyun
Woong (Daniel) Chang, et al., The Effect of iXBRL
Formatted Financial Statements on the
Effectiveness of Managers’ Decisions when Making
Inter-Firm Comparisons, 35 J. Info. Sys. 149 (2021)
(‘‘Chang et al. iXBRL study’’) (finding ‘‘iXBRL
filings facilitate information search and information
match by allowing users to view XBRL data in
HTML filings,’’ and ‘‘managers make more (less)
effective decisions when presented with financial
information formatted in iXBRL (XBRL)’’).
762 See K. Amin, J. Daniel Eshleman, & C. (Qian)
Feng, The Effect of the SEC’s XBRL Mandate on
Audit Report Lags, 32 Acct. Horiz. 1 (Mar. 1, 2018)
(finding ‘‘audit report lags decrease following the
mandatory adoption of XBRL,’’ with results
‘‘concentrated among filers with strong internal
control systems and no prior XBRL reporting
experience’’).
763 See, e.g., Hui Du & Kean Wu, XBRL Mandate
and Timeliness of Financial Reporting: Do XBRL
Filings Take Longer? 15 J. Emerg. Tech. Acct. 57
(2018) (finding decreased reporting lags for XBRL
annual and quarterly filings compared to non-XBRL
filings from accelerated and large accelerated filers,
but not for non-accelerated filers); see also J. Zhou,
Does One Size Fit All? Evidence on XBRL Adoption
and 10-K Filing Lag. 60 Acct Fin. 3183 (Sept. 2020)
(noting that 10–K filing lag decreased for all filers
in the XBRL reporting period except smaller
reporting companies, for which 10–K filing lag
increased). However, these studies were based on
XBRL filings that were made before the adoption of
Inline XBRL requirements, which may facilitate the
filing preparation process by including the
machine-readable and human-readable data in the
same disclosure document.

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preparation procedures by enabling
efficient review of disclosures made by
peer companies.764 Increasing the
timeliness and effectiveness of the
auditing and disclosure process would
improve the speed (and, with respect to
enhanced auditing processes,
confidence) with which users of the
affected entities’ disclosures (such as
investors, analysts, and regulators)
could assess and ultimately draw
conclusions from, and act upon, the
disclosed information.765
One commenter stated that the
empirical evidence the Commission
provided to justify the use of XBRL and
XML was limited to a single study that
does not analyze Inline XBRL. However,
the discussion above cites multiple
studies, not a single study, providing
evidence of benefit from XBRL.766
Further, while most of the cited studies
discuss XBRL rather than Inline XBRL
(presumably because the phase-in from
XBRL requirements to Inline XBRL
requirements for Commission filings
was completed relatively recently, in
2021), two of the cited studies discuss
Inline XBRL specifically.767
Applicability and Variability of
Structured Data Benefits
The structured data benefits discussed
above, while largely specific to public
operating company financial statement
disclosures, generally indicate that the
structured data requirements under the
rule amendments will facilitate the use
and analysis of the information
disclosed on the affected documents.
One commenter agreed with this
statement, stating that data processing is
significantly faster with XBRL than with
unstructured data types.768 Several of
the affected documents that are required
to be structured in Inline XBRL—
namely, Form X–17A–5 Part III, Form
17–H, Form 1, and Form CA–1—include
financial statements that were not
764 See Olivia Berkman, XBRL: What are the
Benefits, FEI Daily (Aug. 29, 2019), https://
www.financialexecutives.org/FEI-Daily/August2019/XBRL-What-are-the-Benefits.aspx (noting in
an interview with a public company’s chief
financial officer that the company is able to ‘‘search
through XBRL filings to find similar companies
within [its] industry that have had to present
certain similar [disclosures] in the past,’’ which has
helped the company ‘‘craft[ ] [its] disclosures to
make sure that [the company is] complying with the
spirit of GAAP and providing the information that
[the company is] supposed to be providing’’).
765 See Proposing Release at 23946 (discussing the
time lag between the date of receipt of a paper filing
of a broker-dealer’s annual reports until it is
scanned and the public portion published on
EDGAR, and the confidential portion available to
Commission staff).
766 See supra notes 763 to 765 and 769 to 772.
767 See Brown et al. iXBRL study; Chang et al.
iXBRL study.
768 See XBRL Letter at 11.

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7339

previously provided in a structured data
language, but will be provided in a
structured data language (specifically,
Inline XBRL) under the rule
amendments. The probability that, and
extent to which, the observed effects can
be extrapolated are thus likely greater
for those affected documents than for
the remaining affected documents,
which do not contain financial
statements.
In addition, unlike the public
company financial statement
information evaluated in the literature
referenced above, several of the affected
documents are submitted confidentially
or are otherwise non-public, either in
whole or in part. This includes Form
17–H, Form X–17A–19, Form X–17A–5
Part III (in part), Form CA–1 (in part),
and the CCO reports.769 The expected
benefits of structuring non-public
information will accrue to investors and
markets indirectly, by enhancing the
Commission’s regulatory capabilities.770
By contrast, the expected benefits of
structuring public information will
accrue directly to public users of the
data (which could include investors and
the previously discussed information
intermediaries), as well as indirectly to
investors and markets through the
enhancement of the Commission’s
regulatory capabilities (and, where
relevant, those of other regulators).
The benefits of structuring will also
vary based on the number of entities in
a particular population of reporting
entities. As stated, one benefit of
structured disclosure is the ability to
run large-scale comparisons across
reporting entities and across reporting
periods. For those affected documents
that have a small population of
reporting entities, this benefit will be
769 Additionally, the Commission does not
automatically make public the information
provided to it pursuant to Rule 15fi–3(c); however,
the Commission may make the information
available upon appropriate request (including
requests made pursuant to the Freedom of
Information Act) or otherwise as permitted under
applicable law, subject to SBS Entities making
appropriate requests for confidential treatment. See
supra section IX.F. Whether any material is
confidential is determined pursuant to applicable
law, including but not limited to the Freedom of
Information Act and Commission rules governing
requests for confidential treatment. If the
Commission makes the information provided
pursuant to Rule 15fi–3(c) available, the
information made available may not be in
structured format.
770 See supra sections II.D, IV.A, IV.B, V.A, and
V.D. An example of a structured non-public
disclosure form is Form PF, which registered
investment advisers file with the Commission to
disclose information regarding private funds under
their management. See 17 CFR 275.204(b); Division
of Investment Management: Electronic Filing of
Form PF for Investment Advisers on PFRD,
available at https://www.sec.gov/divisions/
investment/pfrd.shtml.

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limited largely (or, in the case of Form
15A, wholly) to the latter. For those
affected documents that have a large
population of reporting entities (such as
Form X–17A–5 Part III, which is filed by
over 3,000 entities), the benefits of
efficient cross-entity comparisons will
be much more relevant.771 Similarly, the
benefits of efficient access, retrieval,
sorting, and filtering structured
disclosures will be heightened for those
affected documents generated in high

volume (such as Form 19b–4(e) and
Form X–17A–19) compared to those
affected documents that the
Commission receives in low volume
(such as Form CA–1).772
Finally, the benefits of structuring
data will vary based on the type of
disclosures included in each affected
document. Structured numerical
disclosures lend themselves to
mathematical functionality, such as the
calculation of leverage or other ratios to

assess potential exposure to insolvency
or other risk. Structured textual
disclosures lend themselves to periodover-period redline comparisons,
targeted keyword searching, and more
sophisticated sentiment analysis. The
CCO report consists primarily of textual
descriptions, so the latter benefit will be
relevant for that document.773 Other
affected documents feature both
numeric and textual disclosures, so both
benefits will be relevant.

Types of Content and Associated Benefits in Structured Documents
Numeric Information
(mathematical functionality
applicable)

Yes

Yes

Form 17-H

Yes

Yes

Form CA-1

Yes

Yes

Form 1

Yes

Yes

Form 1-N (execution page
only)

No

Yes

Form 15A (execution page
only)

No

No

Rule 19b-4(e) Information

In some cases

No

Form X-17A-19

No

Yes

VDN

Yes

Yes

In some cases

Yes

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One commenter disagreed with the
Commission’s characterization of
benefits for structuring the CCO report
(as well as other unstructured, narrativebased reports such as the compliance
and exemption sections of the annual
audited report on Form X–17A–5 Part
III).774 According to this commenter,
adding an Inline XBRL requirement for
narrative reports will not facilitate
analysis or comparison, because those
reports do not contain standardized,
easily comparable elements.775
However, all narrative reports must
include disclosure responsive to
applicable disclosure requirements set
772 See

(redline comparisons,
targeted searches, sentiment
analyses applicable)

FormX-17A-5 Part III

CCO report

771 See

Textual Information

supra section IX.C.9.
supra sections IX.D.5, IX.D.6, and IX.D.11.

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forth in the Commission’s rules and
regulations (e.g., the disclosure
requirements set forth in the
subparagraphs of Rule 15fk–1(c)(2)(i)
under the Exchange Act). While there
may be variation on the particulars on
how different filers or submitters
respond to those requirements, the
Inline XBRL requirement will facilitate
analysis by enabling efficient
assessment of such variations, and by
enabling efficient comparisons of a
single filer or submitter’s narrative
disclosure over various time periods,
allowing the data user to determine how
773 See 17 CFR 240.15fk–1(c)(2)(i). SBS Entities
may, in providing the narrative descriptions
required by Rule 15Fk–1(c)(2)(i), include numeric
values nested within such narrative descriptions.

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that filer’s or submitter’s disclosure has
evolved over time.
The same commenter also questioned
why the Commission cited sentiment
analysis as a benefit of Inline XBRL
requirements.776 According to the
commenter, sentiment analysis is
typically used for marketing purposes,
and thus it was not clear why such
analysis would be necessary or
beneficial for narrative reports.
However, sentiment analysis is often
used for purposes beyond marketing,
including by third parties to assess
regulatory disclosures, such as
disclosures in Commission filings in
774 See

SIFMA 5/22/2023 Letter at 7.
id.
776 See id.
775 See

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order to assess the usefulness of
disclosures to end users in the
market.777 Thus, the sentiment analysis
benefit is applicable to the narrative
reports that are structured in Inline
XBRL under the rule amendments.
For Rule 19b–4(e), numeric
disclosures are required only when the
disclosure of position limits for new
derivative securities products is
applicable.778 For VDNs, SBS Entities
must notify the Commission of any
valuation disputes in excess of
$20,000,000 if not resolved within three
or five business days, depending on the
counterparty.779 SBS Entities are
provided flexibility to submit the
required information.780 For CCO
reports, while Rule 15fk–1(c) does not
expressly call for numeric values, an
SBS Entity could include numeric
values nested within textual responses,
such as by including dollar amounts
within the description of financial,
managerial, operational, and staffing
resources set aside for compliance with
the Exchange Act.781
For Form 15A, its execution page (i.e.,
the portion of new Form 15A that would
precede section I) will include a series
of structured checkboxes to indicate the
basis for filing the Form, and the
reporting period to which the Form
applies. Structured checkboxes and pick
lists are more relevant to the filtering
and sorting benefits enabled by
structured data requirements. For
example, structuring the checkboxes on
the Form 15A execution page will
enable a data user to retrieve only those
Form 15As that are current supplements
to registration reported pursuant to Rule
15aa–2(b) of the Exchange Act, and
further filter those results to only those
Form 15A filings that include a change
to Exhibit C (list of members).
The Commission is requiring a
specific structured data language for
each Structured Document, rather than
leaving the structured data language
requirement open-ended (i.e., requiring
only that the Structured Document be
provided in a structured, machinereadable data language). Specifying a
single structured data language that a
filer or submitter must use for each
Structured Document will benefit users
of the disclosed information, including
777 See, e.g. H. Kim, E. Lee, & D. Yoo, Do SEC
Filings Indicate Any Trends? Evidence from the
Sentiment Distribution of Forms 10–K and 10–Q
with FinBERT, 57 DATA TECH. & APPLICATIONS 293
(Apr. 25, 2023); see generally, Yong Chen et al.,
Sentiment Trading and Hedge Fund Returns, 76 J.
Fin. 2001 (Apr. 8, 2011).
778 See Item 9 of Form 19b–4(e).
779 See 17 CFR 240.15fi–3(c)(1). See also 17 CFR
240.15fi–3(c)(2) regarding required amendments.
780 See supra section V.C.
781 See 17 CFR 240.15fk–1(c)(2)(i)(E).

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investors, market participants, other
filers or submitters, information
intermediaries, and the Commission,
because it will help ensure the
disclosures are provided in a uniform
structured data language that is most
suitable for the document in question,
and will prevent a potential
coordination failure that could occur if
different respondents chose to provide
inputs in different data languages.
One commenter disagreed with
requiring a specific structured data
language for each Structured Document,
stating that the Commission should
instead adopt a principles-based
approach where affected filers or
submitters are required to provide
disclosures in a machine-readable
format.782 According to this commenter,
such an approach would facilitate data
analysis without imposing burdensome
and ambiguous requirements on affected
filers or submitters. However, adopting
a principles-based approach (i.e., an
open-ended data language requirement)
to data structuring would have created
issues for users of the data. Specifically,
such an approach would have allowed
different filers or submitters of the same
document to provide their disclosures
in different data languages. In such
instances, data users such as
Commission staff and market
participants would have been unable to
incorporate disclosures from filers or
submitters using one data language into
the same datasets and applications as
disclosures of other filers or submitters
using different data languages without
undertaking data conversion processes
that are frequently burdensome and
imprecise. This may have hindered
investors, the Commission, and market
participants from efficiently comparing
disclosures across the complete set of
entities within a given filer population
and could therefore have dampened the
benefits that would otherwise accrue
from requiring the disclosures to be
machine-readable. Instead, specifying
the data language to be used will likely
increase the probability of realizing the
anticipated benefits of machinereadability for users of the Structured
Documents.
2. Costs
The rule amendments alter the way
the affected entities provide the affected
documents, specifically by requiring
electronic submission or posting of the
affected documents, and by requiring
most of the content of the affected
documents to be provided in a
structured data language. The affected
entities already are required to prepare
782 See

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7341

and submit the affected documents with
the Commission pursuant to Exchange
Act rules that currently govern each
category of affected entity.783 Thus, we
generally do not expect the affected
entities to incur incremental costs
associated with preparing (e.g.,
collecting, drafting, reviewing) the
information required to be disclosed in
the affected documents prior to filing or
posting under the rule amendments.784
Rather, we expect certain entities to
incur incremental costs associated with
structuring the prepared information.
a. Electronic Submission and Posting;
Clarifying Changes to the FOCUS Report
As discussed above, a significant
number of the entities subject to the rule
amendments already have experience
with EDGAR due to other reporting
obligations and thus are not expected to
incur EDGAR-related costs incremental
to the rule amendments. Entities that
use EDGAR for purposes of complying
with reporting obligations under
existing rules generally are not expected
to incur additional EDGAR access costs
due to the rule amendments.785
Reporting entities that do not have
experience with EDGAR may incur
initial compliance burdens, including
the one-time burden associated with
filing a Form ID for the first time to
obtain the access codes needed to
submit an application on the
Commission’s EDGAR system.786 One
commenter agreed with our assessment,
stating that there would be an initial
fixed cost to electronic submission
posting, but that ongoing additional
costs would be minimal.787 The
Commission estimates that the cost for
entities that do not have experience
with EDGAR will be around $5,000 on
a one-time basis to become familiar with
the EDGAR system for the purposes of
filing for Rules 17a–5, 18a–7, and 17a–
12.788
Due to the widespread use of the
internet, the cost of establishing and
maintaining internet access is not
783 ANE Exception Notice withdrawals currently
are not required. However, a Registered Entity
seeking withdrawal could send a request to a
designated electronic mailbox. See supra note 291
and accompanying text, and section IX.D.13.
784 A subset of security-based swap broker-dealers
would incur additional costs associated with filing,
due to the FOCUS report amendments that would
require them to file information that under the
baseline they currently do not file.
785 If reporting entities with EDGAR experience
require time to switch the affected documents from
paper to EDGAR, they may incur an additional
initial cost.
786 See 17 CFR 232.10(b).
787 See XBRL Letter at 3 and 7.
788 See supra section IX.D.9. The one-time cost is
estimated to require sixteen hours of labor from a
programmer. 16 hours × $316 per hour = $5,056.

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expected to stem from the amendments.
The Commission preliminarily believes
that the costs associated with providing
materials pursuant to Rule 17a–22 by
registered clearing agencies on websites,
and the costs associated with posting
information currently required on Form
19b–4(e) by SROs, in addition to the
reduced timeframe for compliance, is
likely not to add significant costs to a
registered clearing agency’s 17a–22
obligations or an SRO’s 19b–4(e)
obligations.
Several amendments related to
FOCUS Reports could impose burdens
on market participants. The
amendments to FOCUS Report Part II
are expected to result in an initial
burden of $2,130 on each Part II filer so
firms can familiarize themselves with
the amendments to FOCUS Report Part
II.789 These amendments are expected to
either have no impact on or reduce the
ongoing burden on most filers, because
they will reduce questions about where
and how to report items on the form.
However, because the amendments
require stand-alone swap dealers and
stand-alone introducing brokers to
complete a new section of FOCUS
Report Part II that these types of firms
were not previously required to
complete (i.e., Computation of CFTC
Minimum Capital Requirements), these
amendments are likely to result in an
ongoing annual burden of $426 hour per
stand-alone swap dealer or stand-alone
introducing broker.790
The amendments to Part IIC are
expected to result in an initial burden
of five hours on each bank SBS Entity
so that firms can compare the revised
FOCUS Report Part IIC with FFIEC
Form 031.791 However, these
amendments are expected to either have
no impact on or reduce the ongoing
burden on bank SBS Entities, because
they will reduce questions about how to
complete FOCUS Report Part IIC
consistently with FFIEC Form 031.
The amendment to signature
requirements for the FOCUS Report is
expected to result in an initial burden
of $426 on each filer so that the firm can
review the standards for an electronic
signature on the FOCUS Report Part II,
IIA, or IIC, as applicable.792 However,
this amendment is expected to either
have no impact on or reduce the
ongoing burden on FOCUS Report filers,
because they will not be required to
furnish as many signatures as before the
789 5 hours × $426 per hour (compliance attorney)
= $2,130.
790 1 hour × $426 per hour (compliance attorney)
= $426.
791 See supra note 658 and accompanying text,
792 1 hour × $426 per hour (compliance attorney)
= $426. See supra note 659 and accompanying text.

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amendment, and it may be easier to
prepare electronic signatures rather than
manual signatures since firms will
already be familiar with the process and
can easily obtain these signatures while
working remotely.
The amendment to OTC derivatives
dealer requirements is expected to result
in an initial burden of $4,740 on each
OTC derivatives dealer so that the firm
can familiarize itself with the SEC
eFOCUS system.793 However, this
amendment is expected to either have
no impact on or reduce the ongoing
burden on OTC derivatives dealers,
because filing the FOCUS Report
electronically is an automated process
as compared to filing by paper. In
addition, OTC derivatives dealers are
required to be affiliated with a brokerdealer, which means that OTC
derivatives dealers’ operational staff
already are familiar with the FINRA
eFOCUS system’s interface, and can use
the same preexisting templates,
software, and procedures currently used
by the broker-dealer to file FOCUS
Reports on the FINRA system.
b. Structured Data
Certain structured data requirements
under the amendments will impose
additional compliance costs on affected
entities. Specifically, the Inline XBRL
requirements for Form 1, Form CA–1,
Form X–17A–5 Part III and related
annual filings, Form 17–H, and the CCO
reports (or home country reports
submitted pursuant to a substituted
compliance order under Exchange Act
Rule 3a71–6) will result in additional
compliance costs, both initial and
ongoing, for the SROs, broker-dealers
(including OTC derivatives dealers), and
SBS Entities filing or submitting those
documents relative to the baseline,
because those entities will be newly
required to apply Inline XBRL tags to
the documents before filing or
submitting them to the Commission (or
pay a third-party tagging service
provider to do so). The Commission
does not expect the requirements to
provide Form X–17A–19, the execution
pages of the Covered SRO Forms, the
facing page of Form X–17A–5 Part III,
the facing page and Part II of Form 17–
H, and the VDNs to the Commission
using custom XML-based data languages
will impose similar structured data
implementation costs on the SROs,
broker-dealers, and SBS Entities that
will be subject to those requirements.
For the custom XML requirements on
EDGAR filings, EDGAR will provide
filers or submitters with the option of
793 15 hours × $316 per hour (programmer) =
$4,740.

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using a fillable web form that will
convert inputted disclosures into the
relevant custom XML.794 Other than the
exchanges and clearing agencies filing
Form 1 and Form CA–1, respectively,
the Commission expects these entities to
input their disclosures into the fillable
EDGAR web form, and thus not be
required to incur compliance costs
associated with structuring disclosures
in custom XML data languages.
By contrast, the Commission expects
exchanges and clearing agencies, which
will be subject to more extensive custom
XML disclosure requirements as a result
of the rule amendments, to have the
requisite sophistication to encode their
Exhibit disclosures in custom XML and
will submit the custom XML Exhibits to
EDGAR directly rather than manually
completing lengthy fillable forms to be
converted into custom XML
documents.795 This will cause
exchanges and clearing agencies to
incur implementation costs associated
with integrating any new or updated
custom XML schemas into their existing
data systems.796 Nonetheless, exchanges
and clearing agencies may find direct
submission in custom XML beneficial,
because it allows for greater automation
in the process of submitting data that is
already structured directly to EDGAR,
and removes the need for the final
manual step of converting structured
data into unstructured information to be
typed into fillable web fields.
With respect to the requirement for
SROs to post Rule 19b–4(e) information
using the custom XML schema for this
information (such schema will be
posted on the Commission’s website),
the Commission expects that the SROs
will incur higher implementation costs
than those affected entities that are
subject to EDGAR custom XML
requirements, because SROs will need
to encode the posted information in
accordance with the schema rather than
using a fillable web form on EDGAR.
This will also be the case for any
entities that choose to submit EDGAR
documents directly in the relevant
custom XML data language rather than
use the fillable form that EDGAR
provides.
Multiple commenters generally agreed
that the structured data requirements
794 See EDGAR Filer Manual, Volume II, Chapter
8. As discussed in section V.C, supra, one
commenter stated that the Commission should
allow SBS Entities to submit a structured data file
for the VDN (rather than completing a fillable web
form) to preserve efficiencies arising from firms’
existing systems. See SIFMA 5/22/2023 Letter at 11.
Under the rule amendments, as under the proposal,
SBS Entities will have this option.
795 See supra sections II.A.3, II.D.4, and VII.A.
796 See infra text accompanying notes 844 and
852 for related cost estimates.

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
under the rule amendments will impose
additional costs on affected entities, but
disagreed with the Commission’s
estimates on the specific nature and
magnitude of such costs.797 A
commenter, in stating that the proposed
structured data cost estimates were too
low, stated that using XBRL and XML
for the affected documents would
require firms to expend substantial
resources and undergo fundamental
operational changes.798 According to the
commenter, the Inline XBRL and
custom XML requirements would, in
particular, require firms to: hire
additional personnel that are proficient
in Inline XBRL and custom XML;
develop processes for converting the
relevant data into Inline XBRL and
custom XML and uploading that data to
EDGAR; train new and existing
personnel on such processes; and
overhaul systems and operations to
integrate the Inline XBRL/custom XML
production and processing.799 The
commenter also conveyed one firm’s
estimates that it would cost $20,000 to
$40,000 per year per registrant to retain
an XBRL tagging service provider and
$20,000 to $30,000 per year per entity
to purchase the tagging software.
As explained in the sections IV.A and
VII.A above, the Commission disagrees
with the commenter that the structured
data requirements will require firms to
undergo all the changes the commenter
described. For the custom XML
requirements, most firms will comply
with those requirements by completing
fillable web forms on EDGAR; other
firms will have the requisite
sophistication to encode disclosures
using custom XML schemas without the
need for substantial additional training
or hiring of personnel. For Inline XBRL
requirements, firms that outsource
compliance to a third-party service
provider will not need to hire additional
personnel proficient in XBRL and XML,
develop processes for converting data
into XBRL and XML and uploading that
data to EDGAR, train new and existing
personnel on such processes, or
overhaul systems and operations to
integrate XBRL or XML production,
because these tasks will have been
performed by the third-party service
provider, and not by the firm itself.
Firms that instead comply with
structured data requirements internally
will not need to hire additional
personnel that are proficient in XBRL,
because these firms can license software
tools that allow staff without XBRL
797 See Integrated Solutions Letter; SIFMA 5/22/
2023 Letter.
798 See SIFMA 5/22/2023 Letter at 4.
799 See id. at 5.

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proficiency to apply Inline XBRL tags to
regulatory disclosures without any need
to overhaul the firm’s systems or
operations. These firms will, however,
likely need to implement processes for
the use of such software tools and train
staff on these processes. The
Commission includes these process
implementation and training costs in its
estimates of initial structured data costs
and burdens.800
As to the magnitude of the structured
data compliance costs, the Commission
estimated at proposal, and continues to
estimate for the rule amendments, that
certain affected filers or submitters
(specifically, clearing agencies and
exchanges not affiliated with public
companies) will incur costs of $20,000
to $30,000 to structure the Structured
Documents, but that other affected filers
or submitters will incur lower costs.801
These estimates are based on
considerations such as: (i) prior surveys
regarding structured data costs; (ii)
publicly available information on XBRL
tagging service and software pricing;
(iii) the expected extent and complexity
of disclosures to be structured in each
type of Structured Document; (iv)
certain affected entities’ affiliations with
companies that have experience
structuring disclosures; and (v) for
custom XML requirements, the
availability of a fillable web form option
that enables affected filers or submitters
to, at their option, forgo structuring their
disclosures. The Commission provides
further detail on these factors later in
this section. None of the aforementioned
considerations has changed or lost
relevance since the amended rules were
proposed in March 2023.
The Commission is, however,
adjusting the extent to which the
structured data cost estimates reflect
reduced burdens for filers or submitters
affiliated with reporting companies that
have existing Inline XBRL experience.
In the proposing release, the
Commission requested comment on
whether it is reasonable to assume that
affected entities with affiliates subject to
Inline XBRL requirements would be
able to leverage the Inline XBRL
compliance software licenses and/or
800 Specific cost ranges for initial structured data
implementation costs are set forth later in this
section (X.C.2.b).
801 As discussed in further detail later in this
section, the Commission estimates clearing agencies
will incur approximately $9,650 to $28,910 to
structure Form CA–1 in the initial year of
compliance, and $6,430 to $19,270 to structure
Form CA–1 in subsequent years. The Commission
expects exchanges unaffiliated with public
reporting companies will incur approximately
$10,140 to $30,380 to structure Form 1 in the initial
year of compliance, and approximately $6,760 to
$20,250 to structure Form 1 in subsequent years.

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7343

service agreements, as well as the Inline
XBRL tagging processes and experience,
of those affiliates.802 In response, one
commenter stated that this is dependent
on the contractual arrangements that the
affiliates may have with their providers,
and with the internal staffing structure
for each company.803 The Commission
is therefore adjusting its structured data
cost estimates to reflect that the extent
to which affiliates of entities subject to
Inline XBRL requirements may be able
to leverage the Inline XBRL tagging
processes, experience, software licenses,
or service agreements of those affiliates
could be limited.804 The Commission is
also making two revisions to the
estimates of initial implementation costs
related to structured data requirements;
those initial implementation cost
estimates, including the revisions
thereto, are discussed later in this
section.
Another commenter, whose letter
addressed only the proposals involving
Rule 17a–5 under the Exchange Act and
the FOCUS report, stated that requiring
XBRL structuring will result in
significant burdens for most brokerdealers.805 The Commission agrees that
the Inline XBRL requirements under the
rule amendments will impose costs on
broker-dealers, and estimates the extent
of those costs below. As those estimates
indicate, the Commission continues to
expect the compliance costs for brokerdealers will vary based on factors such
as the size of the broker-dealer and the
extent to which the broker-dealer has
experience (or has affiliates with
experience) structuring their data.
Surveys on Structured Data Costs
Various XBRL and Inline XBRL
preparation solutions have been
developed and used by operating
companies and investment companies
to fulfill their existing structuring
802 See

Proposing Release at 24002.
XBRL Letter at 11.
804 Specifically, as detailed in the subsequent
discussions of estimated cost ranges for each
affected document, the Commission is applying the
cost reductions to only half of all filers or
submitters affiliated with reporting companies.
805 See Integrated Solutions Letter at 1. The
commenter also suggested that, should the
Commission nonetheless include a structuring
requirement for Form X–17A–5 Part III under the
rule amendments, the filing period for annual
financial statement filers be extended by fifteen
days to allow for XBRL encoding to be
accomplished. See id. at 4. As the Commission
explains in Section VII.A of this release, because
the infrastructure for compliance with XBRL
requirements in Commission filings (including the
market for compliance software and service
providers) has been in place for more than a decade,
it will not be difficult for broker-dealers to comply
with Inline XBRL tagging requirements within the
existing filing period for Form X–17A–5 Part III. See
supra section VII.A.
803 See

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requirements under the Commission’s
rules. These existing requirements
include multiple types of data,
including numerical data in the context
of financial statements, numerical data
in the context of tables (along with the
tables themselves), simple text strings,
longer textual narratives, numerical data
nested within textual narratives, and
checkboxes.806
With respect to the magnitude of
Inline XBRL compliance costs, an
American Institute of Certified Public
Accountants (‘‘AICPA’’) survey of XBRL
pricing data for 1,032 public operating
companies with $75 million or less in
market capitalization in 2018 found an
average cost of $5,850 per year, a
median cost of $2,500 per year, and a
maximum cost of $51,500 per year for
fully outsourced XBRL creation and
filing.807 These figures represent tagging
costs over an entire year, which
typically encompasses the Inline XBRL
structuring of financial statements each
quarter. A separate survey of 139
Nasdaq-listed issuers in 2018 found
higher XBRL compliance costs,
including an average XBRL compliance
cost of $20,000 per quarter, a median
XBRL compliance cost of $7,500 per
quarter, and a maximum XBRL
compliance cost of $350,000 per quarter
in XBRL costs per quarter.808 Unlike the
AICPA survey, the Nasdaq survey was
not limited to smaller reporting
companies (i.e., companies with $75
million or less in market capitalization),
nor did it assess trends in compliance
costs over time.
This observed variance in XBRL and
Inline XBRL compliance costs is likely
attributable to variance in the number of
discrete disclosures (including numbers,
806 For example, an operating company’s annual
report on Form 10–K includes iXBRL-tagged
checkboxes on the cover page, iXBRL-tagged
company name on the cover page (text string),
iXBRL-tagged numbers on the balance sheet (face of
the financial statement), iXBRL-tagged tables and
numbers therein in the financial statement
footnotes, and iXBRL-tagged textual narratives and
numbers therein, also in the financial statement
footnotes.
807 See AICPA, XBRL Costs for Small Companies
Have Declined 45% since 2014 (2018), available at
https://us.aicpa.org/content/dam/aicpa/
interestareas/frc/accountingfinancialreporting/xbrl/
downloadabledocuments/xbrl-costs-for-smallcompanies.pdf. As discussed below in this section,
the population of affected filers or submitters most
analogous in size to the companies sampled here
are certain registered broker-dealers.
808 See Letter from Nasdaq, Inc. (Mar. 21, 2019),
Request for Comment on Earnings Releases and
Quarterly Reports, Release No. 33–10588 (Dec. 18,
2018), 83 FR 65601 (Dec. 21, 2018). Like the abovecited AICPA survey, this survey was limited to
operating companies. In addition, both surveys
were conducted before the transition from XBRL to
Inline XBRL and before the implementation of
cover page tagging requirements for periodic
reports.

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blocks of narrative text, checkboxes,
etc.) contained in a tagged document, as
well as the complexity of the specific
disclosures to be tagged. Larger, more
organizationally complex entities are
likely to have more detailed and
complex financial statements (including
footnotes and schedules), and thus have
more tags that they will need to apply
to their documents, typically resulting
in higher compliance costs (as described
in further detail below in this
section).809 To that end, a random
sample of annual reports on Form 10–
K filed by Nasdaq-listed companies for
fiscal year 2023 with a parallel sample
for companies with a public float of $75
million or less showed approximately
60 percent more tagged Inline XBRL
facts in the Nasdaq-listed sample.810
One commenter stated that the
number of required tags in a Structured
Document will be a key consideration in
determining the cost of preparing
reports in Inline XBRL, and that the
number of required tags depends on the
granularity of the taxonomy.811
However, the presence of tags in a
taxonomy does not dictate the inclusion
of each tag in every Inline XBRL
document; rather, an XBRL taxonomy
provides a glossary of tags from which
a filer or submitter can select when
tagging a document in Inline XBRL. The
US–GAAP Taxonomy, for example,
contains approximately 17,000 tags, but
public operating companies filing a
report use only the subset that is
applicable to the filing. The number of
XBRL tags to be used, and thus (in many
cases) the cost of structuring an XBRL
document, depends on the
extensiveness and complexity of the
substantive disclosure a filer provides in
response to legal disclosure
requirements, and not on the particulars
of the taxonomy created to implement
the technical process of tagging those
substantive disclosures.
Applicability and Variability of
Structured Data Costs
The affected documents that the
Commission is requiring to be
structured in Inline XBRL under the
rule amendments consist of the same
data types as the documents that are
currently required to be structured in
Inline XBRL (e.g., numerical data in the
809 See, e.g., Bok Baik, et al., Organizational
Complexity, Financial Reporting Complexity, and
Firms’ Information Environment (Mar. 31, 2023),
available at https://ssrn.com/abstract=4413814
(retrieved from SSRN Elsevier database).
810 Targeted samples were obtained using data
from Inline XBRL EDGAR filings through the
Commission’s internal Financial Statement Query
Viewer tool. Tagged fact counts were obtained by
analyzing Inline XBRL data filed in EDGAR.
811 See SIFMA 5/22/2023 Letter at 5.

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context of financial statements,
numerical data in the context of tables
(along with the tables themselves),
simple text strings, longer textual
narratives, numerical data nested within
textual narratives, and checkboxes).
Because Inline XBRL tagging software
has already been developed to provide
this functionality and is already in use
by public reporting companies to fulfill
Inline XBRL requirements, the
Commission expects that vendors will
update their Inline XBRL tagging
software to accommodate the Inline
XBRL requirements for Form 1, Form
CA–1, Form X–17A–5 Part III, Form 17–
H, and the CCO report. Some filers or
submitters of these documents were not
previously subject to Inline XBRL
requirements, so it is unlikely that they
previously used the Inline XBRL
compliance products offered by these
vendors. However, as discussed further
below in this section, some filers or
submitters are affiliated with public
reporting companies subject to existing
Inline XBRL requirements, and will
potentially be able to leverage their
affiliates’ Inline XBRL compliance
software licenses or service agreements
and experience in complying with the
Inline XBRL requirements.
One commenter stated that the ability
of filers or submitters to leverage the
experience of their affiliates is
dependent on the contractual
arrangements the affiliate may have
with its tagging compliance software or
service providers, and on the internal
staffing structure of the affiliate.812
Another commenter stated that the
burden of structuring filings will be
greater for firms that are not affiliates of
public reporting companies, and that
the XBRL resources that public filers
have developed for Form 10–K and 10–
Q filings would be minimally useful for
other reports such as CCO reports,
because those reports rely on different
systems, personnel, divisions,
processes, and timelines, and would be
subject to different taxonomies.813
While the Commission agrees that the
Structured Documents (including CCO
reports) will be, at least in part, subject
to different taxonomies than those used
for tagging disclosures in Forms 10–K
and 10–Q, the Commission disagrees
that existing resources for tagging public
companies in Inline XBRL would be
minimally useful. As discussed above,
while the specific disclosures in the
Structured Documents differ from the
disclosures in existing XBRL filings, the
content type (e.g., tables, numeric
values, text blocks) of the disclosures in
812 See
813 See

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
the Structured Documents is the same as
the content type of the disclosures in
existing XBRL filings. Existing XBRL
compliance tools and processes will
therefore be relevant to the Structured
Documents, although they will need to
be updated to import newly developed
and applicable taxonomies.
The Commission expects the
compliance costs associated with the
structured data requirements, as
adjusted for inflation, will likely
decrease over time. Affected entities
will likely comply with structuring
requirements more efficiently after
gaining experience over repeated filings,
though such an effect will likely be
diminished for affected entities that
have pre-existing experience structuring
similar data in other documents. Thirdparty vendors of structured data
compliance software or services may
decrease the prices of their products
over time; the XBRL compliance costs
reported in the 2018 AICPA survey of
XBRL pricing data for smaller operating
companies reflect such a trend, as they
represented a 45% decline in average
cost and a 69% decline in median cost
from 2014.814
The Commission expects the direct
relationship between filer size and
compliance costs described earlier in
this section will apply to Inline XBRL
compliance costs that arise under the
rule amendments, and will be
particularly relevant to Form X–17A–5
Part III filers (which include brokerdealers—including OTC derivatives
dealers—and non-bank SBS Entities) for
two reasons. First, like public operating
companies, Form X–17A–5 Part III filers
will be tagging financial statements
(including footnotes and schedules) in
Inline XBRL under the rule
amendments.815 Second, like public
operating companies, Form X–17A–5
Part III filers vary widely in size. For
example, on December 31, 2023,
approximately 300 broker-dealers
reported over $100 million in total
assets, while approximately 1,600
broker-dealers reported less than $1
million in total assets.816 Thus, as
discussed in further detail later in this
814 See

supra note 806.
addition to financial statements and
footnotes, Form X–17A–5 Part III filers will also
need to tag their auditor’s reports and other annual
reports in Inline XBRL under the rule amendments.
By contrast, public operating companies only need
to tag auditor identification information in their
auditor’s reports. See Exchange Act Release No.
93701 (Dec. 2, 2021), 86 FR 70027, 70031 (Dec. 9,
2021).
816 We derive the broker-dealer financial data in
this economic analysis from FOCUS Reports that
broker-dealers filed through FINRA’s eFOCUS
system for the fiscal period ending Dec. 31, 2023.
See supra section X.B.3.

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815 In

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section, the Commission expects the
Inline XBRL compliance costs for Form
X–17A–5 Part III will vary inversely
with size, as has been observed for
public operating companies.817
The Commission expects the
correlation between entity size and
tagging cost to be less relevant to the
other populations of entities that will be
subject to Inline XBRL requirements
under the rule amendments, because
those populations are more limited in
number and in the variation of size and
complexity across entities within those
populations. For example, Form CA–1 is
filed by clearing agencies, including
registered and exempt clearing agencies;
there were 11 such entities in operation
as of December 31, 2023.818 Form 1 is
filed by national securities exchanges, of
which there were 24 as of December 31,
2023 (and by exempt exchanges, of
which there were none as of December
31, 2023).819 The CCO report is
submitted by SBS Entities, of which
there were 53 as of June 21, 2024.820
Some entities that will file or submit
the documents to be structured in Inline
XBRL under the rule amendments may
be affiliated with entities that are
subject to Inline XBRL requirements in
other filings. For example, as of
December 31, 2023, 17 of the 24
national securities exchanges were
affiliated with public companies that
file financial statements and cover page
information in EDGAR in Inline
XBRL.821 In addition, of the largest 20
broker-dealers by asset size as of
December 31, 2023, 19 were affiliated
with public companies that file
financial statement and cover page
information in Inline XBRL on
EDGAR.822 As discussed above, to the
extent that an affected entity shares
compliance systems with an affiliated
company, or can otherwise leverage the
affiliated company’s processes, licenses,
service agreements, and/or experience
in complying with Inline XBRL
requirements, the affected entity’s
compliance costs incurred will likely be
mitigated in part.823
As discussed above, the Commission
is requiring specific structured data
languages for each Structured
817 See supra notes 815 and 816 accompanying
text for additional detail on this observed
correlation.
818 See supra section IX.C.3.
819 See supra section IX.C.1.
820 See supra section IX.C.15.
821 See Commission, ‘‘Self-Regulatory
Organization Rulemaking,’’ available at https://
www.sec.gov/rules/sro.shtml (last visited June 6,
2024).
822 This data is derived from FOCUS Reports filed
through FINRA’s eFOCUS system for the fourth
quarter of 2023. See supra section X.B.3.
823 See supra section IX.D.2.

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7345

Document, rather than leaving the
structured data language requirement
open-ended (i.e., requiring only that the
Structured Document be provided in a
structured, machine-readable data
language). A cost associated with this
approach is that it will constrain the
flexibility that filers or submitters of a
Structured Document would otherwise
have had in preparing the Structured
Document. For instance, some filers or
submitters of a custom XML document
may have already been using Inline
XBRL to structure similar data for
internal business purposes, such as
through the use of ERP systems, and
may therefore have preferred to use
Inline XBRL rather than the required
custom XML data language for that
document.824 In addition, requiring a
specific structured data language for
each Structured Document may extend
the amount of time it would take were
the Commission to change the particular
structured data language to be used,
such as to accommodate any future
developments in which newly
developed structured data languages
prove to be more apt for the disclosures
in question.
For Form 1, Form CA–1, Form X–
17A–5 Part III, Form 17–H, and the CCO
reports, the approach of requiring Inline
XBRL for some parts of the document
and custom XML for other parts of the
document will entail drawbacks for
users of the information (including
Commission staff and market
participants). Specifically, data users
will be unable to incorporate the Inline
XBRL disclosures on a given filing or
submission into the same datasets and
applications as the custom XML
disclosures on that filing or submission,
and will be unable to run analyses that
incorporate both types of information
without undertaking data conversion
processes that are frequently
burdensome and imprecise. Similarly,
any technical validations programmed
into EDGAR will be unable to check for
any inappropriate inconsistencies
between disclosures on Inline XBRL
portions and disclosures on custom
XML portions of a given filing, thus
reducing the benefit of improved data
quality that will likely result from
structured data requirements.
Structured Data Cost Estimates: Form
X–17A–5 Part III and Form 17–H
With respect to specific estimated cost
ranges for Form X–17A–5 Part III and
Form 17–H filers to structure their
filings, the Commission expects the
aforementioned AICPA study, which
824 See supra section X.B.1 (discussing the
prevalence of XBRL integration in ERP systems).

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surveyed XBRL tagging price data across
roughly 1,000 small reporting
companies and found in 2018 a median
and average annual cost of XBRL filing
of $2,500 and $5,850, respectively, will
likely be relevant to the majority of
Form X–17A–5 Part III filers. In 2017,
the 1,000 smallest reporting companies
by asset size reported total assets of
approximately $8 million or less. As of
December 31, 2023, approximately 75%
of Form X–17A–5 Part III filers fell
within that $8 million total asset size
threshold. For these smaller Form X–
17A–5 Part III filers, the Commission
estimates the approximate median cost
of tagging financial statements on Form
X–17A–5 Part III by using the median
annual cost estimate from the AICPA
survey ($2,500) and dividing it by four,
because the small reporting companies
in the AICPA study prepared tagged
financial statements on a quarterly
rather than annual basis. Using the
resulting figure ($625) as a midpoint
and establishing lower and upper
bounds at 50% of the midpoint, the
Commission estimates smaller Form X–
17A–5 Part III filers will incur an
approximate median per filing cost of
$310 to $940 to structure their financial
statements in Inline XBRL.825
For the larger Form X–17A–5 Part III
filers (i.e., those with total assets greater
than $8 million), the Commission
estimates that the higher median
compliance cost from the Nasdaq survey
($7,500 per quarter) will be a more
suitable approximation. Using that
median compliance cost as a midpoint
yields an estimate of $3,750 to $11,250

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825 The Commission rounds the estimated
structured data cost ranges in this section to the
nearest $10 because they represent approximations
rather than exact costs. The estimated cost ranges
in this section encompass internal time costs for
preparing the structured reports (e.g., applying the
relevant tag from the XBRL taxonomy or custom
XML schema to the relevant disclosure) and
external monetary costs (e.g., licensing structured
data compliance software and/or services from
third-party vendors). For annualized populationwide corollaries to the structured data cost
estimates in this section, see supra section IX.D.

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per filing for larger Form X–17A–5 Part
III filers to structure their financial
statements.
Some larger Form X–17A–5 Part III
filers are subsidiaries of, or otherwise
affiliated with, public reporting
companies that are already required to
tag their financial statements.826 In the
proposing release, the Commission
stated its expectation that these filers
will incur significantly lower costs to
tag their financial statements than other
large Form X–17A–5 Part III filers,
because they will likely be able to
leverage the software licenses and/or
service agreements and the Inline XBRL
tagging processes and experience of
their affiliates. Consequently, the
Commission estimated these Form X–
17A–5 Part III filers will incur 25% of
the tagging cost of other large Form X–
17A–5 Part III filers, resulting in an
annual estimated cost of $940 to $2,820
to tag their financial statements on Form
X–17A–5 Part III. As discussed earlier in
this section, the Commission is
adjusting its structured data cost
estimates to reflect that the extent to
which affiliates of entities subject to
Inline XBRL requirements may be able
to leverage the Inline XBRL tagging
processes, experience, software licenses,
or service agreements of those affiliates
could be limited. With respect to Form
X–17A–5 Part III, rather than estimating
all 226 broker-dealers affiliated with
public reporting companies will incur
the lower estimated cost of $940 to
$2,820 to tag their financial statements
on Form X–17A–5 Part III, the
Commission is now estimating that only
half, or 113, of those affiliated broker826 The Commission has identified 226 such
broker-dealers, including 19 of the largest 20
broker-dealers by asset size, using broker-dealer
FOCUS Reports and XBRL data through the
Commission’s Financial Statement Query Viewer
for the fiscal period ending Dec. 31, 2023. This
group of filers also includes all 9 non-bank SBSDs
that relied on orders granting substituted
compliance under Exchange Act 3a71–6 in
complying with the reporting requirements under
Exchange Act Rule 18a–7(c) for the fiscal period
ending Dec. 31, 2023.

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dealers will incur reduced structured
data costs, with the other half incurring
the higher estimated cost of $3,750 to
$11,250.
In addition to the financial
statements, footnotes, and schedules,
Form X–17A–5 Part III also requires a
series of reports (including accountant’s
reports, compliance reports, exemption
reports, and supplemental reports).
Form X–17A–5 Part III filers are now
required to tag these reports in Inline
XBRL. Typically, these reports consist
of a short series of narrative text blocks
with limited nested details, so tagging
them in Inline XBRL will likely cost
significantly less than tagging the
financial statements and schedules in
Inline XBRL will cost.827 The
Commission therefore estimates the
approximate cost of tagging these
reports will amount to 5% of the cost to
tag financial statements and schedules,
yielding a total estimated Inline XBRL
tagging cost per filing of approximately
$330 to $990 for smaller Form X–17A–
5 Part III filers; $3,940 to $11,820 for
larger Form X–17A–5 Part III filers that
are not affiliated with public reporting
companies, and $990 to $2,960 for larger
Form X–17A–5 Part III filers that are
affiliated with public reporting
companies.828
827 The ANC broker-dealer supplemental reports,
which average approximately 100 pages in length,
are an exception. Only five filers (the five ANC
broker-dealers) are required to provide these
reports.
828 See also supra section IX.D.9.a (discussing
estimated burdens associated with structuring Form
X–17A–5 Part III information under the
amendments). The structured data cost estimates
here apply to all Form X–17A–5 Part III filers,
including the 9 non-bank SBSDs that relied on
orders granting substituted compliance under
Exchange Act 3a71–6 in complying with the
reporting requirements under Exchange Act Rule
18a–7(c) for the fiscal period ending Dec. 31, 2023.
In each case, Form X–17A–5 Part III filers will incur
the cost of applying Inline XBRL tags to the
financial statements, footnotes, schedules, and
supplemental reports in the annual audited report,
or to corresponding disclosures in reports
submitted under a substituted compliance order.

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7347

Structured Data Compliance Costs for Form X-17A-5 Part III
Filer Type
Smaller broker-dealers
Larger broker-dealers and non-bank
SBS Entities that are not affiliated
with public reporting companies
Larger broker-dealers and non-bank
SBS Entities that are affiliated with
public reporting companies
A subset of larger Form X–17A–5 Part
III filers also file Form 17–H and will
thus be required to tag their quarterly
financial statements in addition to their
annual financial statements.829
However, unlike Form X–17A–5 Part III,
Item 4 of Form 17–H permits filers to
omit the statement of cash flows and the
notes to the financial statements. Thus,
the Commission continues to use
considerably lower Inline XBRL cost
estimates for Form 17–H than for Form
X–17A–5 Part III. As in the proposal, the
Commission begins with the same cost
estimate ranges for structuring financial
statements—but not schedules or
supplemental reports, because Form 17–

Estimated Per Filing Structuring Data
Comoliance Costs
$330-$990
$3,940-$11,820

$990-$2,960

H does not require them—on Form X–
17A–5 Part III: $3,750 to $11,250 per
filing for larger broker-dealers that are
unaffiliated with public reporting
companies, and $940 to $2,820 per
filing for larger broker-dealers that are
affiliated with public reporting
companies.830 The Commission then
reduces the estimated costs by 30% to
reflect the omission of notes and
schedules, and further reduce the
estimated costs by 30% to reflect the
omission of the statement of cash flows.
This yields an estimated cost of $350 to
$1,050 for Form 17–H filers that are
unaffiliated with public reporting
companies, and $100 to $300 for Form

17–H filers that are affiliated with
public reporting companies.831
Other portions of Form 17–H (namely,
the facing page and the material
associated positions and holdings
disclosure) were previously structured
in a custom XML data language specific
to Form 17–H, and this will remain the
case. Because nearly all broker-dealers
subject to Form 17–H filing
requirements previously filed Form 17–
H via EDGAR, they have already been
submitting the information in that
custom XML language.832 Thus, the
Commission has not included an
approximate custom XML structuring
cost estimate for Form 17–H.

Structured Data Compliance Costs for Form 17-H

ddrumheller on DSK120RN23PROD with RULES2

Under the rule amendments, the
Covered SRO Forms (Form CA–1, Form
1, Form 1–N, Form 15A), Form X–17A–
19, and the information required to be
posted under Rule 19b–4(e) will require
some or all the information reported on
829 See supra section IX.C.10. The Commission
does not include smaller Form X–17A–5 Part III
filers (i.e., those with $8 million or fewer in total
assets) in this discussion because they do not meet
the asset threshold for Form 17–H filing
requirements. See supra section IV.B (discussing
the thresholds that determine whether brokerdealers are subject to Form 17–H filing
requirements).

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$100-$300

the forms or postings to be provided in
a structured data language. Here, the
Commission provides estimated ranges
for the approximate cost that affected
entities will incur to structure Forms
CA–1, Form 1, and the Rule 19b–4(e)
information. With respect to Form X–
17A–19, due to the brevity and
simplicity of that Form, the Commission
anticipates SROs will not structure their

disclosures in custom XML themselves,
but will instead simply input their
disclosures in the fillable web form that
EDGAR would provide. Thus, a cost
estimate for the structuring of Form X–
17A–19 in custom XML is not relevant
or appropriate to include. For the same
reason, the Commission has not
included estimated custom XML
structuring cost ranges for the facing

830 The Commission has identified 81 Form 17–
H filers that, as of Dec. 31, 2023, were affiliated
with public reporting companies that structure
Commission filings in Inline XBRL, and estimates
that 40 of these filers (approximately half) will
incur costs within the lower estimated cost range.
See supra text accompanying note 812.

831 See also supra section IX.D.11 (discussing
estimated burdens associated with structuring Form
17–H information under the amendments).
832 As of Dec. 31, 2023, approximately 99% of the
241 broker-dealers that were then subject to Form
17–H filing requirements used EDGAR to file Form
17–H. See supra section IV.D.11.

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ER21JA25.031

Structured Data Cost Estimates: Covered
SRO Forms, Form X–17A–19, and Rule
19b–4(e) Information

Estimated Per Filin2 Structured Data Costs
$350-$1,050

ER21JA25.030

Filer Type
Larger broker-dealers that are not
affiliated with public reporting
companies
Larger broker-dealers that are
affiliated with public reporting
companies

7348

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ddrumheller on DSK120RN23PROD with RULES2

pages to Form CA–1, Form 1, Form 1–
N, and Form 15A. Because the facing
pages of Form 1–N and Form 15A will
be the only structured portion of those
forms, the Commission has not provided
any estimated structuring cost ranges for
them.
Clearing agencies filing Form CA–1
will be required to tag their financial
statements and a series of schedules
containing largely narrative disclosures
in Inline XBRL. For the financial
statements, because clearing agencies
likely operate at a higher level of
complexity than the median Nasdaqlisted reporting company, the
Commission estimates a 25% higher
cost than the cost reported in the
Nasdaq survey, resulting in an
approximate per filing cost estimate of
$4,690 to $14,070 for clearing agencies
to tag financial statements in Inline
XBRL. For the disclosures other than
financial statements, the disclosure
schedules on Form CA–1 to be tagged in
Inline XBRL are considerably lengthier
than the supplemental reports on Form
X–17A–5 Part III discussed above. The
Commission therefore estimates tagging
the non-financial statement disclosures
on Form CA–1 will add 25% of the costs
to tag financial statements in Inline
XBRL, resulting in a median per filing
cost estimate of approximately $1,180 to
$3,530 for clearing agencies to tag the
non-financial statement disclosures on
Form CA–1 in Inline XBRL. This results
in a total estimated Inline XBRL tagging
cost of $5,870 to $17,600 per filing on
Form CA–1.833
Clearing agencies will be required to
structure other Form CA–1 disclosures
using a custom XML data language
specific to that Form. The Commission
recently estimated that the structuring
of disclosures of Form N–CR event
reports in custom XML will cost
approximately $555 per filing. Here, the
Form CA–1 disclosures to be structured
in custom XML are lengthier than the
Form N–CR disclosures that money
market funds will structure in custom
XML, so the Commission estimates an
approximate cost per filing of $560 to
$1,670 (using a 50% increase over the
Form N–CR estimate) that clearing
agencies will incur to structure the
833 See supra section IX.D.5 (discussing estimated
burdens associated with Form CA–1 under the
amendments).

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Form CA–1 schedules in custom
XML.834 The Commission therefore
estimates that the total cost of
structuring Form CA–1 (including Inline
XBRL and custom XML disclosures)
will amount to $6,430 to $19,270 per
filing.835
For national securities exchanges, the
Commission estimates the cost to tag
financial statements on Form 1 in Inline
XBRL will be similar to the cost that
large broker-dealer affiliates of reporting
companies will incur to tag financial
statements on Form X–17A–5 Part III
(estimated above at $940 to $2,820),
because most exchanges are affiliated
with reporting companies.836 However,
Form 1 also requires exchanges to
provide balance sheets and income
statements for its affiliates and
subsidiaries, so the Commission
continues to use an increase of 50%,
yielding an estimated median per filing
cost of $1,410 to $4,230 that exchanges
affiliated with reporting companies will
incur to tag financial statements on
Form 1 in Inline XBRL.837 For national
securities exchanges that are not
affiliated with reporting companies, the
Commission continues to base its Inline
XBRL cost estimate on larger brokerdealers unaffiliated with reporting
companies, but with a 50% increase to
account for the additional balance
sheets and income statements for the
exchange’s affiliates and subsidiaries.
This results in an estimated median per
filing cost of $5,630 to $16,880 that
exchanges unaffiliated with reporting
companies will incur to tag financial
statements on Form 1 in Inline XBRL.838
Exchanges also are now required
under the rule amendments to tag their
manner of operation disclosure in Inline
XBRL.839 This disclosure consists of a
834 See Investment Company Act Release No.
34441 (Dec. 15, 2021), 87 FR 7248, 7332 (Feb. 8,
2022).
835 See id.
836 As of Dec. 31, 2023, 17 of the 24 national
securities exchanges were affiliated with public
reporting companies. See supra note 830. The
Commission estimates that approximately half, or 8,
of these affiliated exchanges will fall within the
lower set of cost estimates for Form 1 structured
data compliance. See supra text accompanying note
812.
837 See supra section IX.D.2 for a description of
the burdens associated with tagging financial
statements on Form 1.
838 See id.
839 This tagging requirement does not include the
copy of the users’ manual. See supra section II.A.3.

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series of tagged narrative text blocks and
could also include some quantitative
amounts (such as those related to fee
disclosures) that will also be tagged. We
estimate an additional 10% cost that
exchanges will incur to tag their manner
of operation disclosure, resulting in a
total estimated compliance cost of
$1,550 to $4,650 per filing for exchanges
affiliated with reporting companies and
$6,200 to $18,580 for exchanges
unaffiliated with reporting companies
would incur to tag Form 1 in Inline
XBRL.840 Also, like clearing agencies,
exchanges will be required to structure
other portions of Form 1 in a custom
XML data language specific to that
Form.841 Because these requirements are
similar, the Commission continues to
use the same custom XML structuring
cost estimate of $560 to $1,670 here,
resulting in a total per filing cost of
structuring Form 1 (including Inline
XBRL and custom XML) of $2,110 to
$6,320 for exchanges affiliated with
reporting companies and $6,760 to
$20,250 for exchanges unaffiliated with
reporting companies.842
By contrast, for the Rule 19b–4(e)
information that exchanges will post on
their websites in a custom XML data
language (i.e., schema) specific to that
information, exchanges will not have
the benefit of a fillable web form, and
will thus be required to structure their
disclosures in custom XML themselves.
Rule 19b–4(e) information consists only
of a short series of disclosures that are
mostly text strings, so the Commission
estimates a per response cost for
structuring, rendering, and posting Rule
19b–4(e) information that is 50% lower
than the Commission’s aforementioned
estimate for structuring Form N–CR in
a previous proposal. This yields an
approximate cost of $140 to $420 that
exchanges will incur to structure each
Rule 19b–4(e) website posting in custom
XML.843
840 See

id.
supra section IX.D.2 for a description of
the burdens associated with structuring portions of
Form 1 in a custom XML data language.
842 See also supra section IX.D.2 (discussing
estimated burdens associated with structuring
disclosures filed on Form 1 under the
amendments).
843 See also supra section IX.D.6 (discussing
estimated burdens associated with structuring,
rendering, and posting Rule 19b–4(e) information
under the amendments).
841 See

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

7349

Structured Data Compliance Costs for Covered SRO Forms and Rule 19b-4(e) Information

Form CA-1
Form 1

Clearing agencies
National securities exchanges
that are not affiliated with public
reporting companies
National securities exchanges
that are affiliated with public
reporting companies
National securities exchanges
and registered national securities
associations
Securities Futures Product
Exchanges
Registered national securities
associations
National securities exchanges

Form 1

Form X-17A-19

Form 1-N
Form 15A
Rule 19b-4(e)
Information

ddrumheller on DSK120RN23PROD with RULES2

Filers/Submitters

Estimated Per Filing/Posting
Structured Data Costs
$6,430-$19,270
$6, 760-$20,250

$2,110-$6,320

NIA
NIA
NIA
$140-$420

Structured Data Cost Estimates: VDNs
and CCO Reports
Under the rule amendments, SBS
Entities will be required to structure the
VDNs required under Exchange Act
Rule 15fi–3(c) in a custom XML data
language specific to those notices, and
they will also be required to structure
the CCO report required under
Exchange Act Rule 15fk–1(c)(2)(ii)(A) in
Inline XBRL. In addition, non-bank SBS
Entities will be required to file Form X–
17A–5 Part III and related annual filings
in Inline XBRL; the structuring costs
associated with that form are discussed
above.
For VDNs, which are not required to
include specific fields, and for dispute
reports submitted by SBS Entities
relying on substituted compliance
pursuant to a Commission order with
respect to the requirements of Rule 15fi–
3(c), the Commission expects SBS
Entities will use the fillable web form
that EDGAR would provide rather than
structure the disclosures in the custom
XML data language themselves.844 Thus,

the Commission has not included a cost
estimate for the custom XML structuring
of the disclosures.
For the Inline XBRL tagging of the
CCO report (or, for an SBS Entity relying
on substituted compliance orders for
Rule 15fk–1 under the Exchange Act,
the home country report submitted
pursuant to that substituted
compliance order), the information to be
tagged in those reports consists of a
series of narrative text blocks, some of
which could contain nested quantitative
values (such as the description of
financial resources set aside for
compliance).845 This content is similar
to the content of the narrative
disclosures on Form CA–1 that clearing
agencies will structure in Inline XBRL
under the amendments, which the
Commission estimates as costing $1,180
to $3,530. Most SBS Entities, however,
are affiliated with public reporting
companies that already structure
disclosures in Inline XBRL.846 For those
entities, that are able to leverage the
Inline XBRL compliance experience,

processes, software, and/or service
agreements that their affiliates have
already implemented, the Commission
estimates a cost range of $300 to $880,
which represents 25% of the cost
incurred by SBS Entities that are not
affiliated with public reporting
companies.847
The Inline XBRL cost estimates
described here apply to all SBS Entities,
including SBS Entities that rely on
substituted compliance orders. In each
case, SBS Entities, which previously
were not required to apply Inline XBRL
tags to the narrative descriptions in their
CCO reports or home country reports
submitted under a substituted
compliance order, will incur the cost of
applying Inline XBRL tags to the
narrative descriptions responsive to
Rule 15fk–1(c) of the Exchange Act in
their CCO reports, or to narrative
descriptions that correspond to the
descriptions addressed in Rule 15fk–
1(c)(2)(i) that are included in reports
submitted to the Commission under a
substituted compliance order.

844 See supra section V.C. As of Dec. 31, 2023, 19
SBS Entities relied on orders granting substituted
compliance under Exchange Act Rule 3a71–6 in
complying with the notice requirements under
Exchange Act Rule 15fi–3(c). See List of Registered
Security-Based Swap Dealers and Major SecurityBased Swap Participants, available athttps://
www.sec.gov/tm/List-of-SBS-Dealers-and-MajorSBS-Participants.
845 As of Dec. 31, 2023, 10 SBS Entities relied on
orders granting substituted compliance under

Exchange Act Rule 3a71–6 in complying with the
reporting requirements under Exchange Act Rule
15fk–1(c). See id.
846 Of the 53 entities that had submitted
applications for registration as an SBS Entity as of
June 21, 2024, 43 are affiliated with public
companies that file financial statement and cover
page information in Inline XBRL. This includes 5
of the 10 SBS Entities that relied on orders granting
substituted compliance under Exchange Act Rule
3a71–6 in complying with the reporting

requirements under Exchange Act Rule 15fk–1(c).
See id. The Commission estimates that
approximately half, or 21, of the 43 affiliated SBS
Entities will incur costs that fall within the lower
set of cost estimates for VDN and CCO report
structured data compliance.
847 See also supra section IX.D.15 (discussing
estimated burdens associated with structuring CCO
reports under the rule amendments).

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Form/Posting

7350

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Structured Data Compliance Costs for VDNs and CCO Reports
Filers/Submitters

VDNs
CCO Reports

SBS Entities
SBS Entities unaffiliated with
public reporting companies
SBS Entities affiliated with
public reporting companies

CCO Reports

ddrumheller on DSK120RN23PROD with RULES2

Structured Data Cost Estimates: Initial
Implementation Costs
The structured data cost estimates
discussed above relate to the ongoing
costs of structuring various disclosures
in Inline XBRL and in custom XMLbased data languages. The Commission
estimates that certain of the affected
entities will also incur costs associated
with the initial implementation of the
structured data requirements. In the
proposing release, the Commission
specifically estimated that affected
entities that do not have structured data
compliance experience and are not
affiliated with entities that have
structured data compliance will
experience a 50% increase in
compliance costs in the first year of the
structured data requirements, and
explained that these initial
implementation costs could include
establishing new procedures and
training staff.
The Commission estimates a 50%
increase in first-year compliance costs
for most of these affected filers or
submitters, but now also estimates an
additional 25% increase in compliance
for firms relying on a substituted
compliance order to file Form X–17A–

848 See

supra note 816.

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$300-$880

5 Part III or fulfill the reporting
requirements of Exchange Act Rule
15fk–1(c). On an ongoing basis, firms
relying on substituted compliance will
incur the same costs to tag home
country reports as firms that do not rely
on substituted compliance, because in
each case, the SBS Entity will incur the
cost of applying Inline XBRL tags to the
information addressed in Exchange Act
Rule 15fk–1(c)(2)(i)(whether that
information is provided in the report
required by Rule 15fk–1(c) or included
within the home country report required
to be provided to the Commission by a
substituted compliance order). In the
first instance of compliance, however,
the Commission estimates that firms
relying on substituted compliance (or
their third-party tagging service
providers) will incur additional costs
associated with identifying the
particular disclosures in their home
country reports that correspond to the
descriptions addressed in Rule 15fk–
1(c)(2)(i) and must therefore be tagged in
Inline XBRL.
In the proposing release, the
Commission stated that it expected the
initial implementation costs to apply
only to those filers or submitters that do

849 See

Jkt 265001

Estimated Per Filing/Notice
Structured Data Costs
NIA
$1,180-$3,530

PO 00000

not fully outsource their structured data
preparation requirements to a thirdparty tagging service provider (i.e., all
filers or submitters other than smaller
broker-dealers, which the Commission
expects will outsource their structured
data preparation requirements like
many smaller reporting companies
do).848 One commenter, in describing
structured data implementation costs,
included costs associated with
diligencing, negotiating with, and
onboarding third parties.849 The
Commission agrees that the process of
negotiating with, diligencing, and
onboarding third parties is a relevant
initial structured data implementation
cost, and is revising its estimates here to
reflect that affected filers or submitters
that choose to fully outsource their
tagging requirements to third-party
tagging service providers will incur this
implementation cost. Therefore, the
Commission is revising its estimates to
indicate that fully outsourcing firms
(i.e., smaller broker-dealers) will incur
an additional 35% of the ongoing cost
in the initial implementation year.
The impact of the estimated initial
implementation costs overall is reflected
in the following chart:

SIFMA 5/22/2023 Letter at 4.

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Structured Data Initial Compliance Costs

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Form X-17 A-5 Part III (for larger
broker-dealers and non-bank SBS
Entities unaffiliated with public
reporting companies that do not rely
on substituted compliance)
Form X-17A-5 Part III (for larger
broker-dealers and non-bank SBS
Entities unaffiliated with public
reporting companies that rely on
substituted compliance)
Form X-17A-5 Part III (for smaller
broker-dealers)
Form CA-1 (for clearing agencies not
subject to Rule 17ad-27(b) under the
Exchange Act)
Form 1 (for exchanges unaffiliated
with public reporting companies)
Rule 19b-4(e) information
CCO report (for SBS Entities
unaffiliated with public reporting
companies (that do not rely on
substituted compliance)
Home country report pursuant to
substituted compliance order
regarding Rule 15fk-1 (for SBS
Entities unaffiliated with public
reporting companies)
Form 17–H is excluded from the table
above, because Form 17–H filers also
file Form X–17A–5 Part III. Including
initial implementation costs for
structuring financial statements on
Form 17–H would be duplicative of the
initial implementation costs for
structuring financial statements on
Form X–17A–5 Part III, which are
reflected in the table.850 Form CA–1
initial implementation costs do not
apply to clearing agencies that provide
a central matching service, because such
clearing agencies are subject to Inline
XBRL requirements for annual straightthrough processing reports required by
Rule 17ad–27(b) under the Exchange
Act.851
850 See

17 CFR 240.15fk–1(c)(2)(i)(E).
17 CFR 240.17ad–27(b); 17 CFR
232.405(b)(5)(i) (to be redesignated as
232.405(b)(5)(vi) under the rule amendments).
851 See

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Estimated Per Response Initial Structured Data
Costs
$5,910-$17,730 (first year)

$6,900-$20,690 (first year)

$450-$1,340 (first year)
$9,650-$28,910 (first year)

$10,140-$30,380 (first year)
$210-$630 (first response)
$1,770-$5,300 (first year)

$2,070-$6,180 (first year)

For Rule 19b–4(e) information, the
Commission anticipates the initial
implementation costs will apply only to
the first posting, and not to subsequent
postings during the first year of
compliance. The content required by
Rule 19b–4(e) is limited to less than 10
individual items of disclosure regarding
the newly traded derivative securities
product for each posting. The
Commission expects the process of
structuring, rendering, and posting the
first response will entail additional
implementation time to map the
associated (and commensurately simple)
custom XML schema to the information
regarding the new derivative securities
product traded on the exchange; the
Commission expects subsequent
responses will entail a less burdensome
process of applying the newly mapped

schema to each derivative securities
product.852
c. Other Compliance Costs
One commenter suggested that there
would be costs because of ‘‘the time it
will take firms to hire and train staff,
identify and retain service providers
and software, overhaul their systems,
and engage in robust testing with the
Commission’’ combined with ‘‘other
Commission initiatives that firms are
implementing.’’ 853 We have considered
852 See also supra section IX.D.6 (discussing
estimated burdens associated with structuring,
rendering, and posting Rule 19b–4(e) information).
853 See SIFMA 5/22/2023 Letter at 14
(commenting on ‘‘the time it will take firms to hire
and train staff, identify and retain service providers
and software, overhaul their systems, and engage in
robust testing with the Commission, as well as
attend to the numerous other Commission
initiatives that firms are implementing (e.g., T+1)’’).
Although the date of the T+1 transition has passed,

Continued

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the potential effects on entities that are
implementing other recently adopted
rules during the compliance period for
these amendments.
Consistent with its long-standing
practice, the Commission’s economic
analysis in each adopting release
considers the incremental benefits and
costs for the specific rule—that is, the
benefits and costs stemming from that
rule compared to the baseline. The
Commission acknowledges the
possibility that complying with more
than one rule in the same time period
may entail compliance costs that will be
higher than if the rules were to be
complied with separately. Although no
commenter named specific rules in this
context, the Commission identified
several rules for which the compliance
periods overlap, in part, with the
compliance periods for the
amendments, but the phased
compliance dates for forms and filings
affected by these amendments will limit
the extent to which overlap occurs.854
Entities subject to the amendments
may be subject to one or more other
recently adopted rules depending on
whether those entities’ activities fall
within the scope of the other rules.
Specifically, the Short Position
Reporting Adopting Release applies to
some investment managers,855 and the
Rule 605 Adopting Release applies to
market centers, which include
exchanges, and certain brokers and
dealers.856 The Tick Size and Access
Fee Adopting Release applies to
national securities exchanges and
certain brokers and dealers.857 The Rule
10c–1a, Customer Notification, and
Beneficial Ownership Adopting
Releases also apply to certain brokers
and dealers 858—although due to
differing requirements, these rules may
not all apply to any given broker or
dealer. The Clearing Agency
Governance Adopting Release applies to
registered clearing agencies, the
Recovery/Wind-Down Adopting Release
applies to covered clearing agencies,
and the Treasury Clearing Adopting
Release applies to certain clearing
agencies for U.S. Treasury securities and
we consider other recently adopted rules in this
analysis. See also supra section IV.A. for a
discussion of phased compliance dates.
854 See supra section X.B.1 (listing recent rule
adoptions and their respective compliance dates)
and section VIII (listing compliance dates).
855 See Short Position Reporting Adopting Release
at 75150.
856 See Rule 605 Adopting Release at 26496–97.
857 See Tick Size and Access Fee Adopting
Release at section VII.C.4.
858 See Rule 10c–1a Adopting Release at 75647,
75717–18; Customer Notification Adopting Release
at 47689, 47725; Beneficial Ownership Adopting
Release at 76897, 76945.

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certain participants of the covered
clearing agencies which could include
broker-dealers.859 Where overlap in
compliance periods exists, the
Commission acknowledges that there
may be additional costs on those entities
that are subject to one or more other
rules.
D. Efficiency, Competition, and Capital
Formation
Mandated electronic submission and
posting will increase the timeliness of
public access to the affected documents
that are made publicly available. Insofar
as market participants use the
information in these documents, easier
or quicker access could result in lower
search costs or more efficient decision
making. These benefits are potentially
magnified during disruptive events,
such as a pandemic, when investors
may place a premium on electronic and
timely access to information.
Furthermore, the efficiency benefits of
electronic submission or posting may be
augmented by the structured data
requirements, as structured data
requirements have been observed to
decrease information asymmetries,
increase liquidity, and reduce the cost
of capital.860 The structured data
requirements for those affected
documents that are used by information
intermediaries (such as financial
analysts and data aggregators) may also
increase competition and encourage
market entry by reducing their
information processing costs.861
Moreover, as mandated electronic
submission or posting leads to lower
ongoing, marginal costs for reporting
entities, compared to non-electronic
submission, the submission or posting
process may become more efficient,
especially over the medium and longer
term. In addition, electronic submission
859 See Clearing Agency Governance Adopting
Release at 84498; Recovery/Wind-Down Adopting
Release at nn. 5–6 and section IV.B.1; Treasury
Clearing Adopting Release at 2717, 2791. All
registered clearing agencies are currently CCAs. See
Clearing Agency Governance Adopting Release at
84468.
860 See, e.g., N. Bhattacharya, Y.J. Cho, & J.B. Kim,
Leveling the Playing Field Between Large and Small
Institutions: Evidence from the SEC’s XBRL
Mandate, 93 Account. Rev. 51 (Sept. 1, 2018); B. Li,
et al., The Impact of XBRL Adoption on Local Bias:
Evidence from Mandated U.S. Filers, 39 J. Account.
Pub. Pol. Article No. 106767 (Nov. 2020); W. Sassi,
H. Ben Othman, & K. Hussainey, The Impact of
Mandatory Adoption of XBRL on Firm’s Stock
Liquidity: A Cross-Country Study, 19(J. Fin. Report.
Account. 299 (May 28, 2021); C. Ra & H. Lee, XBRL
Adoption, Information Asymmetry, Cost of Capital,
and Reporting Lags, 10 iBusiness 93 (Sept. 2018);
S.C. Lai, et al., XBRL Adoption and Cost of Debt,
25 Intl. J. Account. Info. Mgmt (May 2015); Y. Cong,
J. Hao, & L. Zou, The Impact of XBRL Reporting on
Market Efficiency, 28 J. Info. Sys. 181 (2014).
861 See supra section X.C.1.b.

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or posting standards in the amendments
are expected to make the submission or
posting process more efficient by
making it easier and less costly for
reporting entities to assure timely
receipt and/or availability of the
submitted information. We expect,
however, that any such efficiency gains
would be small. The efficiency gains
that will arise under the rule
amendments will likely be further
mitigated in the near term because, as
noted, the Inline XBRL requirements
will impose initial implementation costs
on affected entities subject to the
requirements that do not have prior
experience with Inline XBRL.
As discussed above, similar
implementation costs are unlikely to
arise for most of the EDGAR custom
XML forms, because EDGAR will
provide a fillable web form in which
affected entities will be able to input
their disclosures without having to
structure them in the relevant custom
XML data language. By contrast,
implementation costs are likely to arise
for SROs subject to the custom XML
schema requirement for posting Rule
19b–4(e) information, because those will
be posted on the SROs’ websites rather
than filed through EDGAR; however,
due to the relatively small amount of
data to be structured, rendered, and
posted for each new derivative
securities product, the Commission
expects the cost of structuring each
Form 19b–4(e) will be lower than the
cost of structuring Commission filings
in Inline XBRL.862
The costs and benefits of electronic
submission or posting under the rule
amendments may have differential
impacts on some categories of reporting
entities, resulting in potential
competitive effects. To the extent that
the EDGAR cost has a fixed component,
smaller entities that do not have
experience with EDGAR may be at a
relative competitive disadvantage to
larger entities. In addition, smaller
registrants might use third party service
providers to meet the requirements of
the amendments. The use of these
providers could reduce the costs of
EDGAR access and reduce the
competitive effects of the
requirements.863 In addition, many of
the reporting entities already are
familiar with electronic submission in
EDGAR due to changes in market
practices and an increase in electronic
submission due to the pandemic.
862 See

supra sections IX.D.6 and X.C.2.b.
rule might increase demand for third
party services, but is unlikely to have significant
effects on efficiency, competition, or capital
formation in these markets.
863 The

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For the Inline XBRL requirements, it
is less likely that the associated
compliance costs will be fixed, because
the documents filed or submitted by
smaller entities (such as smaller brokerdealers) are likely shorter and less
complex than documents filed or
submitted by larger entities (such as
larger broker-dealers), and will thus
require less time and sophistication to
tag in Inline XBRL. By contrast,
compliance costs for the custom XML
requirements will, in most instances, be
fixed, because except for Form 1 and
Form CA–1 filers and SROs posting
Rule 19b–4(e) information, the
Commission expects affected filers or
submitters will comply with such
requirements by completing fillable web
forms rather than structuring their
disclosures in custom XML.864
In addition, one commenter requested
the Commission consider interactions
between the economic effects of the
proposed rule and other recent
Commission rules, as well as practical
realities such as implementation
timelines.865 As discussed above, the
Commission acknowledges that
overlapping compliance periods may in
some cases increase costs. This may be
particularly true for smaller entities
with more limited compliance
resources. This effect can negatively
impact competition because these
entities may be less able to absorb or
pass on these additional costs, making
it more difficult for them to remain in
business or compete. We acknowledge
that to the extent overlap occurs
between the compliance periods of this
rule and the compliance periods of
other rules, there could be costs that
could affect competition. However,
phased compliance dates for forms and
filings affected by the amendments will
limit overlap between compliance
periods, which may be particularly
helpful for smaller entities. We therefore
do not expect the risk of negative
competitive effects from increased
compliance costs from overlapping
compliance periods to be significant.
The final rule will have an indirect
effect on capital formation, namely
through a more efficient financial
marketplace. Improving the efficiency of
financial markets will incentivize
investors to invest, indirectly promoting
the formation of capital.
To the extent that market practices are
already consistent with the Updated
Staff Statement, many of the expected
effects of the amendments on efficiency,
competition, and capital formation may
supra section X.A.
supra section X.C.2.c. (discussing SIFMA
5/22/2023 Letter at 14).

be mitigated. For example, for brokerdealer registrants that file reports
pursuant to Rule 17a–5 electronically,
the efficiency gains of electronic
submission will be mitigated, and the
effects of the amendments will be
limited to those associated with the use
of structured data.
E. Reasonable Alternatives
1. Exempt Certain Entities or
Disclosures From Structured Data
Requirements
As an alternative, the Commission
could have changed the scope of the
structured data requirements (e.g.,
Inline XBRL tagging requirements for
Form X–17A–5 Part III, Form 17–H,
Form CA–1, Form 1, and the CCO
reports) by exempting certain subsets of
reporting entities or documents. For
example, the Commission could have
exempted some broker-dealers from the
requirement to structure Form X–17A–
5 Part III and related annual filings
based on size (e.g., total reported assets)
or other characteristics. One commenter
supported such an approach, stating
that XBRL requirements should be
limited only to very large broker-dealers
or broker-dealers that are custodians.866
Specific potential exemption thresholds
could have been broker-dealers with
$500,000 or less in total assets (which
would have exempted 1,260, or 37%, of
registered broker-dealers as of December
31, 2023), or broker-dealers with
$250,000 or less in total annual
revenues (which would have exempted
1,080, or 31%, of registered brokerdealers as of December 31, 2023).867
Such thresholds would have prevented
smaller broker-dealers from incurring
the compliance costs associated with
the Inline XBRL tagging requirements
for Form X–17A–5 Part III. Another
alternative would have been to limit the
Inline XBRL tagging requirements only
to those broker-dealers that carry
customer or broker-dealer accounts and
receive or hold funds or securities for
customers (which would have exempted
3,246, or 96%, of registered brokerdealers, as of December 31, 2023). This
approach may have been useful in
targeting the Inline XBRL requirements
towards those broker-dealers that may
have the most impact on financial
markets due to the funds or securities
they hold for customers, while reducing
compliance costs for all other brokerdealers. However, any cost savings
arising from the exemption of certain
subsets of reporting entities or
disclosures from the Inline XBRL

864 See
865 See

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867 See

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requirements would not have justified
the reduction in informational benefits
to data users such as Commission staff
and market participants, who would
have been required to manually collect
unstructured data from the exempted
reporting entities or disclosure items in
order to analyze it (or rely on and incur
costs to third parties to do so).
2. Require Structured Data on Form 1–
N, Form 15A, and ANE Exception
Notices to Same Extent as Structured
Documents
As another alternative, the
Commission could have required
structuring Form 1–N, Form 15A, and
the ANE Exception Notices to the same
extent as comparable Structured
Documents. For example, the
Commission could have required Form
1–N and Form 15A, which are similar
to Form CA–1 and Form 1 in that they
contain substantive disclosures in
exhibits to an execution page, to be
structured using a mix of Inline XBRL
and custom XML data languages. The
Commission could also have required
ANE Exception Notices, which contain
only a limited number of data points, to
be structured using a custom XML data
language. Structuring these documents
would have extended the analytical
capabilities associated with the other
structured data requirements in this
release to these additional documents.
However, the limited number of filers
and filings (for Form 1–N and Form
15A) and the limited number of data
points on each document (for the ANE
Exception Notices) would have limited
the potential utility of functionality
enabled by structured data (such as
large-scale comparisons across
populations of entities). Given this
limitation on expected benefits, the
additional structuring requirements
would not have been justified.
3. Replace Inline XBRL Requirements
With Custom XML Requirements or
Vice Versa
As another alternative, the
Commission could have replaced the
custom XML requirements with Inline
XBRL requirements for some or all of
the relevant Structured Documents
(which include Form X–17A–5 Part III,
Form 17–H, Form CA–1, Form 1, Form
1–N, Form 15A, Form X–17A–19, Rule
19b–4(e) information, VDNs, and CCO
reports). For example, rather than
requiring Inline XBRL structuring for
certain of the affected documents, and
custom XML structuring for other
affected documents, the Commission
could have required Inline XBRL for all
of the affected documents required to be
structured (i.e., require Form X–17A–19,

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the execution pages of Forms 1–N and
15A, VDNs, the information required to
be posted under Rule 19b–4(e), and the
entirety of the other Covered SRO
Forms, Form X–17A–5 Part III, and
Form 17–H, to be provided using Inline
XBRL rather than using custom XMLbased data languages).
This alternative could have benefited
users of the data in that the reported
information could have been used
compatibly (e.g., using the same
software tools) with the disclosures in
the other affected documents (and with
existing Inline XBRL data). However,
the alternative would also have imposed
the costs and complexity associated
with Inline XBRL tagging on Forms and
notices and reports that are each limited
to a constrained set of non-financial,
non-narrative data elements or are
otherwise less suitable for Inline XBRL,
thus potentially making the structured
disclosures more burdensome to prepare
and use than is called for by these
particular disclosures.868 The
difficulties in preparing and using such
data under an Inline XBRL requirement
would likely not have been justified by
any compatibility benefits that would
arise from such an alternative.
One commenter generally supported
adding XBRL requirements throughout
the proposal rather than relying on a
mixture of XBRL and custom XML
requirements, stating that XBRL
requirements provide greater benefit
than custom XML requirements.869 The
commenter stated that a fillable web
form that automatically generates XBRL
files can be created just as easily as one
that creates a custom XML file. While
the Commission agrees that this is
technically feasible, the EDGAR system
is (with limited exception) currently
built to provide fillable web forms for
custom XML filings, not for XBRL
filings, and changing the system would
incur costs and burdens that would not
justify the related benefit.
The Commission could alternatively
have replaced the Inline XBRL
requirements with custom XML
requirements for some or all of the
relevant Structured Documents (which
include Form X–17A–5 Part III, Form
17–H, Form CA–1, Form 1, and CCO
reports). However, while this could
have led to benefits such as smaller file
sizes and lower compliance burdens (to
the extent entities would have inputted
disclosures into fillable forms rather
than structuring the disclosures
themselves), Inline XBRL is more
technically suited to handle financial
statement disclosures (and was
868 See
869 See

supra section VII.A.
XBRL Letter at 2.

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originally designed to so), as well as
extended narrative discussions
(including those with individual values
nested within the discussions).
Accordingly, Inline XBRL as required
for these forms is appropriate.
4. Require Structured Data Languages
Other Than Inline XBRL and Custom
XML
As another alternative, the
Commission could have required
structured data languages other than
Inline XBRL and custom XML for some
or all the affected documents. For
example, the Commission could have
required other variants of XBRL, such as
XBRL–CSV (‘‘Comma-Separated
Values’’) or XBRL–JSON (‘‘JavaScript
Object Notation’’). As stated in the
Proposing Release, public commenters
in other rulemakings had indicated that
using these XBRL variants could entail
benefits, such as smaller file sizes and
greater ease of use.870 One commenter
conveyed its support for XBRL
requirements and stated that the type of
XBRL (such as XBRL–CSV, XBRL–
JSON, or Inline XBRL) that should be
used depends on the type of data
collected.871 This commenter
encouraged the Commission to explore
XBRL–CSV as an alternative to the
proposed custom XML requirements,
stating that XBRL–CSV files are smaller
than custom XML files because files
generated in XBRL–CSV can rely on
references to taxonomies to include the
necessary labels, definitions, and
relationships, whereas a custom XML
file must contain all necessary labels,
definitions, and relationships itself.872
The Commission agrees with the
commenter that using an XBRL–CSV
requirement in place of the custom XML
870 See Letter from Campbell Pryde, President and
CEO, XBRL US, ‘‘RE: Enhanced Reporting of Proxy
Votes by Registered Management Investment
Companies; Reporting of Executive Compensation
Votes by Institutional Investment Managers, File
Number S7–11–21’’ (Dec. 14, 2021), available at
https://www.sec.gov/comments/s7-11-21/s7112120109496-263895.pdf (stating, ‘‘The XBRL–CSV
specification allows data to be prepared in a simple
CSV file which can then be opened in Excel. Data
prepared using XBRL–CSV can be loaded
automatically with no need to understand the
meaning of individual columns (which would need
to be reviewed if ingesting a custom XML file)’’);
Letter from Gregory Babyak, Global Head of
Regulatory Affairs, Bloomberg, L.P., Bloomberg L.P.
‘‘Enhanced Reporting of Proxy Votes by Registered
Management Investment Companies; Reporting of
Executive Compensation Votes by Institutional
Investment Managers Release No. 34–93169/File
No. S7–11–21’’ (Dec. 14, 2021), available at https://
www.sec.gov/comments/s7-11-21/s71121-20109566263925.pdf (stating, ‘‘JSON makes for significantly
smaller files, does not need specialized tools and
libraries, and is both easier to consume and
generate’’).
871 See XBRL Letter at 11.
872 See id. at 2.

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requirements under the amended rules
would have yielded smaller files than
custom XML files and could therefore
have incremental usability benefits for
data users. However, unlike custom
XML and Inline XBRL, no EDGAR
filings are currently filed using the
XBRL–CSV format or the XBRL–JSON
format, and the EDGAR system
currently does not accept these
formats.873 As such, the usability benefit
associated with XBRL–CSV or XBRL–
JSON would not have justified the
burden of expanding reporting and
intake capability to accommodate JSON
or CSV.
Other structured data languages that
could have been used include the
Financial Information eXchange Markup
Language (‘‘FIXML’’), which the
Commission recently proposed for
security-based swap position reporting,
and pipe-delimited ASCII, which the
Rule 605 NMS Plan currently requires
for market centers’ order execution
reports.874 However, FIXML is generally
designed to accommodate the
communication of information related
to securities trading, whereas the
information required by the Structured
Documents is broader.875 For pipedelimited ASCII, unlike custom XML,
EDGAR does not currently provide
fillable forms or rendering applications
for that format. In addition, the use of
pipe-delimited ASCII rather than
custom XML and Inline XBRL would
have precluded more complex technical
validations (such as checks on any
disclosures nested within narrative
descriptions).
5. Permit, Not Require, Structured Data
for Affected Documents
As another alternative, the
Commission could have replaced some
or all the structured data requirements
with voluntary structuring provisions.
This would have provided greater
873 See Regulation S–T, 17 CFR 232.101(a)(1)(iv);
17 CFR 232.301; EDGAR Filer Manual, Volume II,
at 5.1 (requiring EDGAR filers generally to use
ASCII or HTML for their document submissions,
subject to certain exceptions).
874 See Exchange Act Release No. 93784 (Dec. 15,
2021), 87 FR 6652, 6675 (Feb. 4, 2022); 17 CFR
242.605(a)(2) and Securities and Exchange
Commission File No. 4–518 (National Market
System Plan Establishing Procedures Under Rule
605 of Regulation NMS) at 2 (‘‘Section V . . .
provides that market center files must be in
standard, pipe-delimited ASCII format’’).
875 See What Is FIX?, available at https://
www.fixtrading.org/what-is-fix/ (last visited Apr.
19, 2024) (‘‘The FIX Protocol language is comprised
of a series of messaging specifications used in trade
communications’’). FIXML is the machine-readable
data language associated with the Financial
Information eXchange (‘‘FIX’’) Protocol. See FIXML
Online, Technical Specification, Version 1.1. (May
2014), https://www.fixtrading.org/standards/fixmlonline/ (last visited Apr. 19, 2024).

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flexibility to respondents and eased
compliance burdens on any respondents
that chose not to structure their filings
or postings. For instance, Form X–17A–
5 Part III and Form 17–H were
previously partially subject to custom
XML structured data requirements when
voluntarily filed on EDGAR, and
approximately half of broker-dealers
chose to voluntarily file their annual
reports on EDGAR.876 Some
respondents may have been
incentivized by the benefits of
structured data, such as reduced audit
fees, and the ability to review of peer
respondents’ structured disclosures in
order to assist with their own disclosure
preparations,877 and thus may have
pursued those benefits even in the
absence of structured data requirements.
However, as shown by the number of
broker-dealers that did not voluntarily
file on EDGAR, relying on all affected
entities to pursue such incentives would
likely have resulted in the incomplete
provision of structured data. This would
have resulted in incomplete datasets,
thereby adversely affecting the
informational benefits that will accrue
from structured data requirements.
One commenter, in the particular
context of CCO reports, stated that the
Commission should require a single
reporting process to avoid confusion
and added expense to the
marketplace.878 According to the
commenter, allowing reporting entities
to choose from a variety of approaches
will require data users to employ
different data collection methodologies
to extract the data they need.879 The
Commission agrees that allowing
reporting entities to choose from
different reporting approaches—such as
allowing some reporting entities to
submit documents in an unstructured
format—would add burden to data
users, because they would have to
manually collect and process
unstructured information from entities
choosing not to structure their reports,
and compare it to the results of analyses
of structured information from entities
that do choose to structure those same
reports. The Commission is therefore
not including voluntary structuring
requirements under the amended rules.
876 See

infra note 916 and accompanying text.
supra section X.C.1.b.
878 See XBRL Letter at 9–10; see also id. at 10
(‘‘Processing data in structured, machine-readable
XBRL format takes seconds compared to HTML
which takes at least 20 minutes, PDF around 30
minutes, and an image file, about 50 minutes.’’).
879 See id.
877 See

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6. Exempt Smaller Entities From
Electronic Submission or Posting
Requirements
As another alternative, the
Commission could have exempted
smaller entities from electronic
submission or posting requirements for
some or all of the affected documents.
This could take the form of some
thresholds based on total assets, total
annual revenues, net capital
requirements, a combination of factors,
or the type of entity (e.g., whether the
broker-dealer carries customer accounts
and receives or holds customer cash and
securities, or whether the broker-dealer
is an OTC derivatives dealer).
While this alternative could have
reduced the cost burden to smaller
entities, this alternative would also have
eliminated the benefits of electronic
submission and posting for these
entities, such as the reduction of costs
and the improved efficiency of the
submission process. In addition,
exempting smaller entities from the
submission or posting requirements
might have reduced the value of
publicly available data if the result was
that only a portion of the submissions
are machine-readable or if multiple
methods were required to access all the
data as might occur if some portion of
forms were submitted electronically via
EDGAR while other submissions of the
same form are made publicly available
as PDFs of paper submissions.
7. Require SROs To Submit Form 19b–
4(e) Via EDGAR
As another alternative, rather than
requiring the information required by
Rule 19b–4(e) under the Exchange Act
to be posted on an SRO’s website in
custom XML, the Commission could
have amended Rule 19b–4, Form 19b–
4(e), and the instructions thereto to
require SROs to submit Form 19b–4(e)
with the Commission via EDGAR using
custom XML. One commenter stated
that Form 19b–4(e) should be submitted
to EDGAR (or, alternatively, that the
Commission or another party should
create a registry where links to these
documents can be posted).880 The
commenter stated that this would
facilitate ease of use for market
participants, who would be able to
collect all needed data in one location
rather than set up mechanisms to track
new form postings on multiple
websites.881 The commenter also stated
that such an approach would be
unlikely to increase the reporting
burden for SROs.882
880 See

XBRL Letter at 6.
id.
882 See id.

The Commission disagrees with the
commenter and is adopting the rule as
proposed, because SROs provide
thousands of Forms 19b–4(e) each year,
and the Commission expects the
products subject to Rule 19b–4(e) will
continue to number in the thousands
going forward. In addition, the
information to be provided under Rule
19b–4(e) is limited to no more than
eight basic information items, including
ticker symbol, type of issuer, and
whether the underlying instrument is a
broad or narrow-based index. Given the
quantity of these products and the
limited set of information required to be
provided under Rule 19b–4(e) for each
new product, requiring EDGAR
submission would be an unduly
burdensome process compared to SRO
website posting, which will provide a
readily accessible interface for market
participants to access this data without
necessitating submission to EDGAR.
Similarly, a registry of links would add
an unnecessary layer of complexity in
making the information publicly
available when many market
participants are already familiar with
accessing SROs’ public websites.
8. Require the Use of Dedicated Mailbox
As another alternative, the
Commission could require registrants
submit by sending some or all the
affected documents to a dedicated email
inbox in addition to eliminating the
paper requirement. For example, rather
than requiring registered clearing
agencies to post Rule 17a–22 materials
on their websites, the Commission
could require registered clearing
agencies to submit electronic copies of
Rule 17a–22 materials to a dedicated
email inbox at the Commission, as they
have been doing recently, consistent
with the Updated Staff Statement.883
Similarly, another example would be to
require SROs to send Form 19b–4(e)
materials to a dedicated email inbox at
the Commission, rather than publicly
posting the materials on their websites.
This alternative would facilitate
Commission staff access to the Rule
17a–22 and 19b–4(e) materials
compared to the requirements being
adopted, as Commission staff would
receive the materials directly rather than
having to navigate to each registered
clearing agency’s individual website.
However, this alternative could delay or
preclude their availability for market
participants and require Commission
staff to upload these documents to
EDGAR, imposing costs and delays on

881 See

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883 See

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the process.884 One commenter agreed
with the proposed amendments, stating
that it already posts material on its
website and that email submission is
duplicative.885 In addition, to the extent
that market participants have already
developed the practice of submitting the
affected documents via EDGAR—for
these documents, the alternative,
requiring submission to an electronic
mailbox would entail both a higher cost
and a lower benefit for market
participants.
XI. Final Regulatory Flexibility Act
Analysis
The Regulatory Flexibility Act
requires Federal agencies, in
promulgating rules under section 553 of
the Administrative Procedure Act,886 to
consider the impact of those rules on
small entities. The Commission has
prepared the following Final Regulatory
Flexibility Analysis in accordance with
section 4(a) of the RFA.887 An Initial
Regulatory Flexibility Analysis
(‘‘IRFA’’) was prepared in accordance
with the RFA and was included in the
Proposing Release.888
A. Regulatory Flexibility Act
Certification

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The final amendments include
changes that will affect brokers, dealers,
national securities exchanges, clearing
agencies, Securities Futures Product
Exchanges, and SBS Entities. With
regard to a national securities exchange
subject to Rule 17a–19, a small entity is
an exchange that has been exempt from
the reporting requirements of Rule 601
under Regulation NMS and is not
affiliated with any person (other than a
natural person) that is not a small
business or small organization. With
respect to a clearing agency, a small
entity is a clearing agency that: (1)
compared, cleared and settled less than
$500 million in securities transactions
during the preceding fiscal year (or in
the time that it has been in business, if
shorter); (2) had less than $200 million
of funds and securities in its custody or
control at all times during the preceding
fiscal year (or in the time that it has
been in business, if shorter); and (3) is
not affiliated with any person (other
than a natural person) that is not a small
884 See XBRL Letter at 8, which argued against
giving SBS entities flexibility to choose from
reporting options, claiming that data users would be
disadvantaged, and that it would impose costs on
the reporting ecosystem. See also Sage Letter,
stating support for making Form 19b–4(e) publicly
posted on the SRO website.
885 See OCC 5/22/2023 Letter at 4.
886 5 U.S.C. 553.
887 5 U.S.C. 604(a).
888 See Proposing Release at section XI.

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business or small organization.889 When
used with reference to an ‘‘issuer’’ or a
‘‘person,’’ other than an investment
company, a small entity includes an
‘‘issuer’’ or ‘‘person’’ that, on the last
day of its most recent fiscal year, had
total assets of $5 million or less.890
No national securities exchange,
Security Futures Product Exchange, or
national securities association is a
‘‘small entity’’ as currently defined.
With regard to clearing agencies, based
on publicly reported data the
Commission does not believe that any
registered or exempt clearing agency is
a ‘‘small entity’’ as currently defined.
With respect to registrants subject to
Rule 17a–12, based upon financial
reports and other information filed with
the Commission by such entities, none
of the entities subject to Rule 17a–12 is
a ‘‘small entity’’ as currently defined.
With respect to SBS Entities, based on
feedback from market participants and
staff experience with the security-based
swap markets, and consistent with the
Commission’s position in prior DoddFrank Act rulemakings, the Commission
continues to believe that (1) the types of
entities that register with the
Commission as SBSDs (i.e., because
they engage in more than a de minimis
amount of dealing activity involving
security-based swaps)—which generally
would be large financial institutions—
would not be ‘‘small entities’’ for
purposes of the RFA and (2) the types
of entities that may have security-based
swap positions above the level required
to be MSBSPs would not be ‘‘small
entities’’ for purposes of the RFA.891
The Commission thus continues to
believe that SBS Entities providing
notices (and any amendments to the
notices) required by Rule 15fi–3(c) 892 or
filing annual reports required by Rule
18a–7 would not be ‘‘small entities’’ for
purposes of the RFA. The Commission
also continues to expect that all Relying
Entities making use of the ANE
Exception from the de minimis
threshold to SBSD status would not be
‘‘small entities’’ for purposes of the
RFA.893 As a result, any Registered
889 17

CFR 240.0–10(d).
CFR 240.0–10(a).
891 See Registration Process for Security-Based
Swap Dealers and Major Security-Based Swap
Participants, Exchange Act Release No. 75611 (Aug.
5, 2015), 80 FR 48964, 49013 (Aug. 14, 2015);
Prohibition Against Fraud, Manipulation, or
Deception in Connection with Security-Based
Swaps; Prohibition against Undue Influence over
Chief Compliance Officers; Position Reporting of
Large Security-Based Swap Positions, Exchange Act
Release No. 93784 (Dec 15, 2021), 87 FR 6652,
6702–03 (Feb 4, 2022).
892 See Risk Mitigation Adopting Release, 85 FR
at 6411–12.
893 See Cross-Border Adopting Release, 85 FR at
6345.
890 17

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Entity filing an ANE Exception Notice
or withdrawal of an ANE Exception
Notice also would not be a ‘‘small
entity.’’ 894 Consequently, with respect
to the entities described in this
paragraph, the Commission certifies that
the amendments, as adopted, will not
have a significant economic impact on
a substantial number of small entities.
B. Regulatory Flexibility Act Analysis
The analysis below applies to brokerdealers that are considered ‘‘small
entities’’ for Regulatory Flexibility Act
purposes.
1. Need for, and Objectives of, the Final
Amendments
The purpose of the final amendments
is to modernize the filing and
submission of certain Commission
forms by requiring these forms to be
filed or submitted electronically, often
in structured data format. With respect
to the amendments relating to the
FOCUS Report, the purpose is to
harmonize the form with other rules,
make technical corrections, and provide
clarifications. The need for, and
objectives, of the final amendments are
discussed in sections I through VII
above. The economic impact and
potential alternatives to the
amendments are discussed in section X,
and the estimated compliance costs and
burdens of the amendments under the
PRA are discussed in section IX.
2. Significant Issues Raised by Public
Comments
In the Proposing Release, the
Commission requested comment on any
aspect of the IRFA, and particularly on
the number of small entities that would
be affected by the proposed
amendments, whether there are more
efficient or less burdensome ways for
the Commission to modernize its
collection of information from
registrants, the existence or nature of the
potential impact of the proposed
894 Because the Commission does not expect any
Relying Entity to be a ‘‘small entity’’ for purpose of
the RFA, any affiliated broker serving as the
Registered Entity for purposes of the ANE
Exception also would not be a ‘‘small entity.’’ See
Cross-Border Adopting Release, 85 FR at n.737.
Moreover, any registered SBSD serving as the
Registered Entity for purposes of the ANE
Exception would likely be registered as such
because it engages in security-based swap dealing
above the de minimis threshold, and therefore also
would not, in the Commission’s view, be a ‘‘small
entity.’’ See supra note 900 and accompanying text.
Even in the unlikely event that some Relying
Entities satisfy the ANE Exception’s conditions via
the use of an affiliated Registered Entity that is a
registered security-based swap dealer and a ‘‘small
entity’’ for purposes of the RFA, the Commission
continues to believe that there would not be a
substantial number of such entities. See CrossBorder Adopting Release, 85 FR at 6345.

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
amendments on small entities discussed
in the IRFA, and whether there are any
Federal rules that duplicate, overlap, or
conflict with the proposed
amendments.895
One commenter disagreed that
structuring broker-dealer reports is
necessary because regulators receive
periodic FOCUS reports that are already
encoded and there is no need to make
broker-dealer financial statements
machine-readable.896 As discussed
earlier in this release,897 the
Commission disagrees with the
commenter’s point, because the annual
broker-dealer audited reports include
more disclosure—such as the notes to
the financial statements and the
exemption reports—than the periodic
FOCUS reports do. Another commenter
stated that requiring firms to file
documents in structured data puts a
greater burden on smaller firms than
larger firms, and requested that the
Commission amend Regulation S–K to
require larger investors to convert their
material contracts into XBRL format and
then file them with the Commission.898
However, the types of firms that are
subject to the structured data formatting
requirements in this release are
generally not the same types of firms
that are subject to Regulation S–K, so
this additional requirement would not
equalize the burden between small and
large firms.
3. Small Entities Subject to Final
Amendments
The final amendments include
changes that will affect brokers. For
purposes of Commission rulemaking in
connection with the RFA,899 a small
entity includes a broker or dealer that:
(1) had total capital (net worth plus
subordinated liabilities) of less than
$500,000 on the date in the prior fiscal
year as of which its audited financial
statements were prepared pursuant to
paragraph (d) of Rule 17a–5 under the
Exchange Act,900 or, if not required to
file such statements, a broker-dealer
with total capital (net worth plus
subordinated liabilities) of less than
895 See

Proposing Release, 88 FR at 24003.
Integrated Solutions Letter at 4.
897 See supra sections IV.A, VII.A, X.C.2.b, and
X.E.1.
898 See Greg Medcraft, Chairman of Australian
Finance Group Ltd (May 22, 2023).
899 Although Section 601(b) of the RFA defines
the term ‘‘small entity,’’ the statute permits agencies
to formulate their own definitions. The Commission
has adopted definitions for the term ‘‘small entity’’
for the purposes of Commission rulemaking in
accordance with the RFA. Those definitions, as
relevant to this rulemaking, are set forth in Rule 0–
10 under the Exchange Act, 17 CFR 240.0–10. See
Exchange Act Release No. 18451 (Jan. 28, 1982), 47
FR 5215 (Feb. 4, 1982) (File No. AS–305).
900 17 CFR 240.17a–5(d).

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896 See

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$500,000 on the last day of the
preceding fiscal year (or in the time that
it has been in business, if shorter); and
(2) is not affiliated with any person
(other than a natural person) that is not
a small business or small
organization.901 Based on FOCUS
Report and Form BD data, the
Commission estimates that as of March
31, 2024, approximately 723 brokerdealers might be deemed small entities
for purposes of this analysis.
4. Projected Reporting, Recordkeeping,
and Other Compliance Requirements
In general, the amendments to Rule
17a–5 that implicate broker-dealers that
are small entities would require that a
broker-dealer: (1) file its annual reports
and related annual filings electronically
on EDGAR using structured data; and
(2) keep the original oath or affirmation
for a period of not less than six years,
the first two in an easily accessible
place in accordance with the
requirements of Rule 17a–4.902
As stated above, it has been the staff’s
experience that electronic filing has
been practical and efficient. It also has
been the staff’s experience that
electronic filing has been positively
received by the broker-dealers who are
currently filing their annual reports
electronically on EDGAR. Based on
these positive experiences with
electronic filing and as part of its efforts
to modernize the methods by which it
collects information from registrants,
the Commission is amending certain
rules and forms, including certain rules
and forms that would impact brokerdealers that are small entities.
With respect to the structured data
requirements, XBRL requirements for
901 See 17 CFR 240.0–10(c). See also 17 CFR
240.0–10(i) (providing that a broker or dealer is
affiliated with another person if: such broker or
dealer controls, is controlled by, or is under
common control with such other person; a person
shall be deemed to control another person if that
person has the right to vote 25% or more of the
voting securities of such other person or is entitled
to receive 25% or more of the net profits of such
other person or is otherwise able to direct or cause
the direction of the management or policies of such
other person; or such broker or dealer introduces
transactions in securities, other than registered
investment company securities or interests or
participations in insurance company separate
accounts, to such other person, or introduces
accounts of customers or other brokers or dealers,
other than accounts that hold only registered
investment company securities or interests or
participations in insurance company separate
accounts, to such other person that carries such
accounts on a fully disclosed basis).
902 17 CFR 240.17a–5. The substantive
amendments to the FOCUS Report that impact
broker-dealers are limited to stand-alone swap
dealers which are not expected to be small entities.
The amendment to allow electronic signatures will
not impact small broker-dealers because they will
continue to have the option to use manual
signatures.

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7357

public company financial statements
have been observed to increase the ease
and efficiency of analyzing those
structured disclosures (e.g., allowing for
efficient comparisons of disclosures
across multiple reporting entities and
multiple time periods).903 Such benefits
have encompassed small public
companies as well as large public
companies, and have accrued to both
public and regulatory entities.904
Therefore, the structured data
requirements under the amendments
would facilitate the use of the
information reported by broker-dealers
in their annual reports and related
filings to support Commission staff
conducting risk assessment and
enforcement activities,905 or, with
respect to the public portion of the
annual reports and related filings,
information intermediaries (analysts,
researchers and media) and investors
conducting research to interpret or
improve processing of financial
information.906
The compliance costs of the
amendments relating to the requirement
to file on EDGAR will not be significant.
Smaller entities that are broker-dealers
will need to familiarize themselves with
the EDGAR system; however, the
familiarization process will not be
particularly burdensome.
Approximately 1,769 out of an
estimated 3,267 broker-dealers, which
constitutes more than half of brokerdealers, have chosen to voluntarily file
their respective annual reports on
EDGAR. Furthermore, with respect to
the structured data requirements, based
on observed trends in XBRL compliance
costs for small public companies,907 the
compliance costs for broker-dealers that
are small entities would be modest and
would continue to decrease over time.
There will be benefits to small entities
resulting from filing on EDGAR. For
example, once a smaller entity has
familiarized itself with EDGAR, that
entity can be confident that required
filings will be timely because the public
portion of the filing is immediately
available on the Commission’s website
and the filer has received a confirming
email. Such regulatory certainty is of
benefit to registrants generally,
including broker-dealers that are small
entities.
With respect to the requirement to
maintain a copy of the oath or
affirmation, this requirement will not be
unduly burdensome to small entities
903 See

supra section X.C.1.b.
id.
905 See supra note 767767.
906 See supra notes 764764 and 765765.
907 See supra note 816816.
904 See

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that are broker-dealers. A broker-dealer
filing its annual reports in paper
maintains a hard copy of the filing cover
sheet as a record of the oath or
affirmation. The amendment in
paragraph (e)(2)(iii) of Rule 17a–5 is
designed to ensure that this requirement
is preserved in the context of a brokerdealer filing its annual reports
electronically on EDGAR.
5. Significant Alternatives
The RFA directs the Commission to
consider alternatives that would
accomplish our stated objectives, while
minimizing any significant economic
impact on small entities. The
Commission considered alternatives
with respect to whether to utilize the
EDGAR system. However, given that
approximately half of all broker-dealers
are voluntarily utilizing EDGAR for
filing their respective annual audited
reports, and that EDGAR is the primary
system for companies and others
submitting documents under the
Federal securities laws and available for
all registered filers, alternative
electronic platforms would not be
practical or efficient. Further,
developing an alternative technology
platform for intake of annual audited
reports or change in SRO membership
would be time consuming and
expensive relative to using an existing
Commission system that is in use by a
large number of broker-dealers. The
Commission considered exempting
small entities from the EDGAR filing
requirement and allowing small entities
to make submissions via dedicated
email or similar means, but there are
significant efficiencies for Commission
staff and other users of regulatory
disclosure information in having the
forms submitted to a single, uniform
platform, and, as mentioned, EDGAR is
the Commission’s primary system for
the receipt and publication (in the case
of non-confidential submission) of such
information. Exempting small entities
from the EDGAR filing requirement
would make aggregation of the data
from regulatory disclosures less
complete, which could detract from the
usefulness of such data in illustrating
the conditions of Commission-regulated
entities in the financial markets.
The Commission also considered
alternatives with respect to the
structured data requirements, including
the alternative of removing brokerdealers that are smaller entities from the
structured data requirements.908
However, given users of the information
disclosed by broker-dealers such as
investors, broker-dealer customers,
908 See

supra section X.E.1.

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other market participants, and/or
regulatory users would be required to
manually collect unstructured data in
order to analyze it (or rely on third
parties to do so), any cost savings
arising from such an alternative would
not justify the limitations and
difficulties that would arise for these
users of the information. .
Likewise, the Commission considered
changing the actual forms themselves—
either by consolidating or simplifying
the information to be submitted—for
small entities, but allowing a subset of
entities to submit different forms—and
accompanying information—would
reduce the usability and comparability
of the information contained in
disclosures. The cost savings that might
arise from devising different forms for
small entities would not justify the
limitations and difficulties that would
arise for investors, market participants
and/or regulatory users of the
information.909
Finally, the Commission considered
allowing small broker-dealers a longer
timeframe to file on EDGAR so they
have time to familiarize themselves with
the system. However, the Commission
does not believe an additional extension
of time would provide meaningful
additional benefit to these entities and
could result in inordinately stale
financial data being available to the
Commission staff, investors and other
market participants.
XII. Other Matters
Pursuant to the Congressional Review
Act,910 the Office of Information and
Regulatory Affairs has designated these
amendments as not a ‘‘major rule’’, as
defined by 5 U.S.C. 804(2). The
Commission considers the provisions of
the final amendments to be severable to
the fullest extent permitted by law. ‘‘If
parts of a regulation are invalid and
other parts are not,’’ courts ‘‘set aside
only the invalid parts unless the
remaining ones cannot operate by
themselves or unless the agency
manifests an intent for the entire
package to rise or fall together.’’ 911 ‘‘In
such an inquiry, the presumption is
always in favor of severability.’’ 912
Consistent with these principles, while
909 To be clear, this release would not require
small entities to submit more—or different—
information on particular forms. As mentioned
previously, the release would not change the
substantive content of Commission forms with this
rulemaking, but would change the manner in which
such forms are submitted to the Commission.
910 5 U.S.C. 801 et seq.
911 Bd. of Cnty. Commissioners of Weld Cnty. v.
EPA, 72 F.4th 284, 296 (D.C. Cir. 2023); see K Mart
Corp. v. Cartier, Inc., 486 U.S. 281, 294 (1988).
912 Cmty. for Creative Non-Violence v. Turner,
893 F.2d 1387, 1394 (D.C. Cir. 1990).

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the Commission believes that all
provisions of the final amendments are
fully consistent with governing law, if
any of the provisions of these
amendments, or the application thereof
to any person or circumstance, is held
to be invalid, the Commission intends
that such invalidity shall not affect
other provisions or application of such
provisions to other persons or
circumstances that can be given effect
without the invalid provision or
application. In particular, the
amendments relating to the requirement
to file materials on EDGAR operate
independently from the amendments
requiring those materials to be filed or
submitted in a structured data format.
Statutory Authority
The amendments contained in this
release are being adopted under the
authority in sections 6, 7, 8, 10, and
19(a) of the Securities Act of 1933,913
sections 3, 12, 13, 14, 15, 15A, 15F, 17,
17A, 19, 23, 30, and 35A of the
Securities Exchange Act of 1934,914
section 319 of the Trust Indenture Act
of 1939,915 sections 8, 30, 31, and 38 of
the Investment Company Act of 1940 916
and section 761(b) of the Dodd-Frank
Wall Street Reform and Consumer
Protection Act.917
List of Subjects
17 CFR Part 202
Administrative practice and
procedure, Reporting and recordkeeping
requirements, Securities.
17 CFR Part 232
Administrative practice and
procedure, Electronic filing, Investment
companies, Reporting and
recordkeeping requirements, Securities.
17 CFR Part 240
Administrative practice and
procedure, Brokers, Confidential
business information, Fraud, Reporting
and recordkeeping requirements,
Securities, Swaps.
17 CFR Part 249
Brokers, Investment companies,
Reporting and recordkeeping
requirements, Securities.
17 CFR Part 249b
Brokers, Reporting and recordkeeping
requirements, Securities.
913 15

U.S.C. 77f, 77g, 77h, 77j, and 77s(a).
U.S.C. 78c, 78l, 78m, 78n, 78o, 78o–3, 78o–
10, 78q, 78q–1, 78s, 78w, 78dd and 78ll.
915 15 U.S.C. 77sss.
916 15 U.S.C. 80a–8, 80a–29, 80a–30, and 80a–37.
917 15 U.S.C. 8341.
914 15

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
In accordance with the foregoing, title
17, chapter II of the Code of Federal
Regulations is amended as follows:
PART 202—INFORMAL AND OTHER
PROCEDURES
1. The general authority citation for
part 202 continues to read as follows:

■

Authority: 15 U.S.C. 77s, 77t, 77sss, 77uuu,
78d–1, 78u, 78w, 78ll(d), 80a–37, 80a–41,
80b–9, 80b–11, 7201 et seq., unless otherwise
noted.

*

*
*
*
*
2. Amend § 202.3 by revising and
republishing paragraphs (b)(2) and (3) to
read as follows:

■

§ 202.3

Processing of filings.

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*
*
*
*
(b) * * *
(2) Applications for registration as
national securities exchanges, or
exemption from registration as
exchanges by reason of such exchanges’
limited volume of transactions filed
with the Commission are routed to the
Division of Trading and Markets, which
examines these applications to
determine whether all necessary
information has been supplied and
whether all required financial
statements and other documents have
been furnished in proper form.
Defective applications may be returned.
The files of the Commission and other
sources of information are considered to
determine whether any person
connected with the applicant appears to
have engaged in activities which would
warrant commencement of proceedings
on the question of denial of registration.
The staff confers with applicants and
makes suggestions in appropriate cases
for amendments and supplemental
information. Where it appears
appropriate in the public interest and
where a basis therefore exists, denial
proceedings may be instituted. Within
90 days of the date of publication of a
notice of the filing of an application for
registration as a national securities
exchange, or exemption from
registration by reason of such
exchanges’ limited volume of
transactions (or within such longer
period as to which the applicant
consents), the Commission shall by
order grant registration, or institute
proceedings to determine whether
registration should be denied as
provided in § 240.19(a)(1) of this
chapter.
(3) Notice forms for registration as
national securities exchanges pursuant
to section 6(g)(1) of the Securities
Exchange Act of 1934 (15 U.S.C.
78f(g)(1)) filed with the Commission are
routed to the Division of Trading and

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PART 232—REGULATION S-T—
GENERAL RULES AND REGULATIONS
FOR ELECTRONIC FILINGS
3. The general authority citation for
part 232 continues to read as follows:

■

Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j,
77s(a), 77z–3, 77sss(a), 78c(b), 78l, 78m, 78n,
78n–1, 78o(d), 78w(a), 78ll, 80a–6(c), 80a–8,
80a–29, 80a–30, 80a–37, 7201 et seq.; and 18
U.S.C. 1350, unless otherwise noted.

4. Amend § 232.100 by revising
paragraph (c) to read as follows:

■

*

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Markets, which examines these notices
to determine whether all necessary
information has been supplied and
whether all other required documents
have been furnished in proper form.
Defective notices may be returned.

Jkt 265001

§ 232.100 Persons and entities subject to
mandated electronic filing.

*

*
*
*
*
(c) Persons or entities whose filings
are subject to review by the Division of
Trading and Markets; and
*
*
*
*
*
■ 5. Amend § 232.101 by:
■ a. Adding new paragraphs
(a)(1)(xxxii), (xxxiii), (xxxiv), (xxxv),
(xxxvi), (xxxvii), and (xxxviii);
■ b. Revising paragraph (c)(9); and
■ c. Revising paragraph (d).
The revisions and additions read as
follows:
§ 232.101 Mandated electronic
submissions and exceptions.

(a) * * *
(1) * * *
(xxxii)(A) The annual reports filed
with the Commission under § 240.17a–
5(d) of this chapter, the supplemental
reports and statements filed with the
Commission under § 240.17a–5(k) of
this chapter, the annual reports filed
with the Commission under § 240.17a–
12(b) of this chapter, the accountant’s
reports filed with the Commission
under § 240.17a–12(k), (l), and (m) of
this chapter, the reports filed with the
Commission under § 240.17a–19 of this
chapter, and the annual reports filed
with the Commission under § 240.18a–
7(c) of this chapter. The submissions
must be made on EDGAR in the
electronic format required by the
EDGAR Filer Manual, as defined in
§ 232.11 (Rule 11 of Regulation S–T)
and must be filed in accordance with
the requirements of this part 232
(Regulation S–T);
(B) The reports filed and furnished, as
applicable, with the Commission under
§ 240.17h–2T of this chapter. The
submissions must be made on EDGAR
in the electronic format required by the
EDGAR filer Manual, as defined in Rule

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7359

11 of Regulation S–T, and must be filed
in accordance with the requirements of
Regulation S–T;
(xxxiii) Notices (and withdrawals of
notices) filed with the Commission
pursuant to § 240.3a71–3(d)(1)(vi) of
this chapter (Rule 3a71–3(d)(1)(vi));
(xxxiv) Notices (and amendments,
including notices of dispute
termination) provided to the
Commission pursuant to § 240.15fi–3(c)
of this chapter (Rule 15fi–3(c));
(xxxv) Compliance reports submitted
with the Commission pursuant to
§ 240.15fk–1(c)(2)(ii)(A) of this chapter
(Rule 15fk–1(c)(2)(ii)(A));
(xxxvi) Form 1 (§ 249.1 of this
chapter);
(xxxvii) Form 1–N (§ 249.10 of this
chapter); and
(xxxviii) Form 15A (§ 249.801 of this
chapter).
*
*
*
*
*
(c) * * *
(9) Exchange Act filings submitted to
the Division of Trading and Markets
other than those that are submitted in
electronic format as mandated or
permitted electronic submissions under
paragraphs (a) and (b) of this section or
that are submitted electronically in a
filing system other than EDGAR;
*
*
*
*
*
(d) The following must be filed or
submitted, as applicable, in electronic
format:
(1) All documents, including any
information with respect to which
confidential treatment is requested, filed
pursuant to section 13(n) (15 U.S.C.
78m(n)) and section 13(f) (15 U.S.C.
78m(f)) of the Exchange Act and the
rules and regulations thereunder and
the instructions to Form N–PX
(§§ 249.326 and 274.129 of this
chapter);
(2) All documents, including any
information with respect to which
confidential treatment is requested, filed
pursuant to §§ 240.17a–5(d), 240.17a–
5(k), 240.17a–12(b), 240.17a–12(k)
through (m), 240.17a–19, 240.17h–2T,
or 240.18a–7(c) of this chapter;
(3) All notices (and amendments,
including notices of dispute
termination), including any information
with respect to which confidential
treatment is requested, provided to the
Commission pursuant to § 240.15fi–3(c)
of this chapter; and
(4) All compliance reports, including
any information with respect to which
confidential treatment is requested,
submitted to the Commission pursuant
to § 240.15fk–1(c)(2)(ii)(A) of this
chapter.
■ 6. Amend § 232.201 by revising
paragraph (a) introductory text to read
as follows:

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§ 232.201

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
Temporary hardship exemption.

(a) If an electronic filer experiences
unanticipated technical difficulties
preventing the timely preparation and
submission of an electronic filing, other
than a Form 3 (§ 249.103 of this
chapter), a Form 4 (§ 249.104 of this
chapter), a Form 5 (§ 249.105 of this
chapter), a Form ID (§§ 239.63, 249.446,
269.7 and 274.402 of this chapter), a
Form TA–1 (§ 249.100 of this chapter),
a Form TA–2 (§ 249.102 of this chapter),
a Form TA–W (§ 249.101 of this
chapter), a Form D (§ 239.500 of this
chapter), an application for an order
under any section of the Investment
Company Act of 1940 (15 U.S.C. 80a–1
et seq.), an application for an order
under any section of the Investment
Advisers Act of 1940 (15 U.S.C. 80b–1
et seq.), a notice or withdrawal of a
notice filed with the Commission
pursuant to Rule 3a71–3(d)(1)(vi)
(§ 240.3a71–3(d)(1)(vi) of this chapter)
under the Exchange Act (15 U.S.C. 78a
et seq.), an Interactive Data File (as
defined in § 232.11), an Asset Data File
(as defined in § 232.11), or a Schedule
13D or Schedule 13G (§§ 240.13d–101
and 240.13d–102 of this chapter), the
electronic filer may file the subject
filing, under cover of Form TH
(§§ 239.65, 249.447, 269.10 and 274.404
of this chapter), in paper format no later
than one business day after the date on
which the filing was to be made.
*
*
*
*
*
■ 7. Amend § 232.202 by revising
paragraph (a) introductory text to read
as follows:

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§ 232.202

Continuing hardship exemption.

(a) An electronic filer may apply in
writing for a continuing hardship
exemption if all or part of a filing, group
of filings or submission, other than a
Form ID (§§ 239.63, 249.446, 269.7, and
274.402 of this chapter), a Form D
(§ 239.500 of this chapter), a notice or
withdrawal of a notice filed with the
Commission pursuant to § 240.3a71–
3(d)(1)(vi) of this chapter (Rule 3a71–
3(d)(1)(vi)) under the Exchange Act (15
U.S.C. 78a et seq.), or an Asset Data File
(§ 232.11), otherwise to be filed or
submitted in electronic format cannot be
so filed or submitted, as applicable,
without undue burden or expense. Such
written application shall be made at
least ten business days before the
required due date of the filing(s) or
submission(s) or the proposed filing or
submission date, as appropriate, or
within such shorter period as may be
permitted. The written application shall
contain the information set forth in
paragraph (b) of this section.
*
*
*
*
*

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8. Amend § 232.405 by:
a. Revising the introductory text;
b. Revising and republishing
paragraph (a);
■ c. Revising paragraphs (b)(1)
introductory text, (b)(5), and Note 1 to
§ 232.405.
The revisions and additions read as
follows:
■
■
■

§ 232.405 Interactive Data File
submissions.

This section applies to electronic
filers that submit Interactive Data Files.
Section 229.601(b)(101) of this chapter
(Item 601(b)(101) of Regulation S–K),
General Instruction F of § 249.311 (Form
11–K), §§ 240.15fk–1(c)(2)(ii)(A),
240.17a–5(d)(6)(i), 240.17a–5(k)(2),
240.17a–12(b)(6), 240.17a–12(k),
240.17a–12(l), 240.17a–12(m), 240.17h–
2T(a)(2), and 240.18a–7(c)(6) of this
chapter (Rules 15fk–1(c)(2)(ii)(A), 17a–
5(d)(6)(i), 17a–5(k)(2), 17a–12(b)(6),
17a–12(k), 17a–12(l), 17a–12(m), 17h–
2T(a)(2), and 18a–7(c)(6) under the
Exchange Act), paragraph (101) of Part
II—Information Not Required to be
Delivered to Offerees or Purchasers of
§ 239.40 of this chapter (Form F–10),
paragraph 101 of the Instructions as to
Exhibits of § 249.220f of this chapter
(Form 20–F), paragraph B.(15) of the
General Instructions to § 249.240f of this
chapter (Form 40–F), paragraph C.(6) of
the General Instructions to § 249.306 of
this chapter (Form 6–K), § 240.17ad–
27(d) of this chapter (Rule 17ad–27(d)
under the Exchange Act), Note D.5 of
§ 240.14a–101 of this chapter (Rule 14a–
101 under the Exchange Act), Item 1 of
§ 240.14c–101 of this chapter (Rule 14c–
101 under the Exchange Act), General
Instruction L of § 240.14d–100 of this
chapter (Rule 14d–100 under the
Exchange Act), General Instruction I of
§ 249.333 of this chapter (Form F–SR),
General Instruction C.3.(g) of §§ 239.15A
and 274.11A of this chapter (Form N–
1A), General Instruction I of §§ 239.14
and 274.11a–1 of this chapter (Form N–
2), General Instruction C.3.(h) of
§§ 239.17a and 274.11b of this chapter
(Form N–3), General Instruction C.3.(h)
of §§ 239.17b and 274.11c of this
chapter (Form N–4), General Instruction
C.3.(h) of §§ 239.17c and 274.11d of this
chapter (Form N–6), General Instruction
2.(l) of § 274.12 of this chapter (Form N–
8B–2), General Instruction 5 of § 239.16
of this chapter (Form S–6), General
Instruction C.4 of §§ 249.331 and
274.128 of this chapter (Form N–CSR),
General Instruction A of § 249.1 of this
chapter (Form 1), General Instruction A
of § 249b.200 of this chapter (Form CA–
1), §§ 242.829 and 831 of this chapter
(Rules 829 and 831 of Regulation SE),
and the Registration Instructions to

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Form SBSEF (§ 249.1701 of this chapter)
specify when electronic filers are
required or permitted to submit an
Interactive Data File (§ 232.11), as
further described in note 1 to this
section. This section imposes content,
format and submission requirements for
an Interactive Data File, but does not
change the substantive content
requirements for the financial and other
disclosures in the Related Official Filing
(§ 232.11).
(a) Content, format, and submission
requirements—General. An Interactive
Data File must:
(1) Comply with the content, format,
and submission requirements of this
section;
(2) Be submitted only by an electronic
filer either required or permitted to
submit an Interactive Data File as
specified by § 229.601(b)(101) of this
chapter (Item 601(b)(101) of Regulation
S–K), General Instruction F of § 249.311
(Form 11–K), §§ 240.15fk–1(c)(2)(ii)(A),
240.17a–5(d)(6)(i), 240.17a–5(k)(2),
240.17a–12(b)(6), 240.17a–12(k),
240.17a–12(l), 240.17a–12(m), 240.17h–
2T(a)(2), and 240.18a–7(c)(6) of this
chapter (Rules 15fk–1(c)(2)(ii)(A), 17a–
5(d)(6)(i), 17a–5(k)(2), 17a–12(b)(6),
17a–12(k), 17a–12(l), 17a–12(m), 17h–
2T(a)(2), and 18a–7(c)(6) under the
Exchange Act), paragraph (101) of Part
II—Information Not Required to be
Delivered to Offerees or Purchasers of
§ 239.40 of this chapter (Form F–10),
paragraph 101 of the Instructions as to
Exhibits of § 249.220f of this chapter
(Form 20–F), paragraph B.(15) of the
General Instructions to § 249.240f of this
chapter (Form 40–F), paragraph C.(6) of
the General Instructions to § 249.306 of
this chapter (Form 6–K), § 240.17ad–
27(d) of this chapter (Rule 17ad–27(d)
under the Exchange Act), Note D.5 of
§ 240.14a–101 of this chapter (Rule 14a–
101 under the Exchange Act), Item 1 of
§ 240.14c–101 of this chapter (Rule 14c–
101 under the Exchange Act), General
Instruction L of § 240.14d–100 of this
chapter (Rule 14d–100 under the
Exchange Act), General Instruction
C.3.(g) of §§ 239.15A and 274.11A of
this chapter (Form N–1A), General
Instruction I of §§ 239.14 and 274.11a–
1 of this chapter (Form N–2), General
Instruction C.3.(h) of §§ 239.17a and
274.11b of this chapter (Form N–3),
General Instruction C.3.(h) of §§ 239.17b
and 274.11c of this chapter (Form N–4),
General Instruction C.3.(h) of §§ 239.17c
and 274.11d of this chapter (Form N–6),
General Instruction 2.(l) of § 274.12 of
this chapter (Form N–8B–2), General
Instruction 5 of § 239.16 of this chapter
(Form S–6), General Instruction C.4 of
§§ 249.331 and 274.128 of this chapter
(Form N–CSR), General Instruction A of

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§ 249.1 of this chapter (Form 1), General
Instruction A of § 249b.200 of this
chapter (Form CA–1), §§ 242.829 and
242.831 of this chapter (Rules 829 and
831 of Regulation SE), and the
Registration Instructions to Form SBSEF
(§ 249.1701 of this chapter), as
applicable;
(3) Be submitted using Inline XBRL:
(i) If the electronic filer is not a
management investment company
registered under the Investment
Company Act of 1940 (15 U.S.C. 80a et
seq.), a separate account as defined in
Section 2(a)(14) of the Securities Act (15
U.S.C. 77b(a)(14)) registered under the
Investment Company Act of 1940, a
registered non-variable annuity issuer as
defined in Rule 405 under the Securities
Act (17 CFR 230.405), a business
development company as defined in
Section 2(a)(48) of the Investment
Company Act of 1940 (15 U.S.C. 80a–
2(a)(48)), a unit investment trust as
defined in Section 4(2) of the
Investment Company Act of 1940 (15
U.S.C. 80a–4), an entity subject to
§§ 240.15fk–1, 240.17a–5, 240.17a–12,
240.17h–2T, or 240.18a–7 of this
chapter (Rule 15fk–1, 17a–5, 17a–12,
17h–2T, or 18a–7 under the Exchange
Act), an exchange as defined in 15
U.S.C. 78c(a)(1) (Section 3(a)(1) of the
Exchange Act), or a clearing agency as
defined in 15 U.S.C. 78c(a)(23)(A)
(Section 3(a)(23)(A) of the Exchange
Act), or subject to §§ 242.800 through
242.835 (Regulation SE), and is not
within one of the categories specified in
paragraph (f)(1)(i) of this section, as
partly embedded into a filing with the
remainder simultaneously submitted as
an exhibit to:
(A) A filing that contains the
disclosure this section requires to be
tagged; or
(B) An amendment to a filing that
contains the disclosure this section
requires to be tagged if the amendment
is filed no more than 30 days after the
earlier of the due date or filing date of
the filing and the Interactive Data File
is the first Interactive Data File the
electronic filer submits; or
(ii) If the electronic filer is a
management investment company
registered under the Investment
Company Act of 1940 (15 U.S.C. 80a et
seq.), a separate account (as defined in
Section 2(a)(14) of the Securities Act (15
U.S.C. 77b(a)(14)) registered under the
Investment Company Act of 1940, a
registered non-variable annuity issuer as
defined in Rule 405 under the Securities
Act (17 CFR 230.405), a business
development company as defined in
Section 2(a)(48) of the Investment
Company Act of 1940 (15 U.S.C. 80a–
2(a)(48)), a unit investment trust as

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defined in Section 4(2) of the
Investment Company Act of 1940 (15
U.S.C. 80a–4), an entity subject to
§§ 240.15fk–1, 240.17a–5, 240.17a–12,
240.17h–2T, or 240.18a–7 of this
chapter (Rule 15fk–1, 17a–5, 17a–12,
17h–2T, or 18a–7 under the Exchange
Act), an exchange as defined in 15
U.S.C. 78c(a)(1) (Section 3(a)(1) of the
Exchange Act), or a clearing agency as
defined in 15 U.S.C. 78c(a)(23)(A)
(Section 3(a)(23)(A) of the Exchange
Act), or is subject to §§ 242.800 through
242.835 (Regulation SE), and is not
within one of the categories specified in
paragraph (f)(1)(ii) of this section, as
partly embedded into a filing with the
remainder simultaneously submitted as
an exhibit to a filing that contains the
disclosure this section requires to be
tagged; and
(4) Be submitted in accordance with
the EDGAR Filer Manual and, as
applicable, § 229.601(b)(101) of this
chapter (Item 601(b)(101) of Regulation
S–K), General Instruction F of § 249.311
of this chapter (Form 11–K),
§§ 240.15fk–1(c)(2)(ii)(A), 240.17a–
5(d)(6)(i), 240.17a–5(k)(2), 240.17a–
12(b)(6), 240.17a–12(k), 240.17a–12(l),
240.17a–12(m), 240.17h–2T(a)(2), and
240.18a–7(c)(6) of this chapter (Rules
15fk–1(c)(2)(ii)(A), 17a–5(d)(6)(i), 17a–
5(k)(2), 17a–12(b)(6), 17a–12(k), 17a–
12(l), 17a–12(m), 17h–2T(a)(2), and 18a–
7(c)(6) under the Exchange Act),
paragraph (101) of Part II—Information
Not Required to be Delivered to Offerees
or Purchasers of § 239.40 of this chapter
(Form F–10), § 240.13a–21 of this
chapter (Rule 13a–21 under the
Exchange Act), paragraph 101 of the
Instructions as to Exhibits of § 249.220f
of this chapter (Form 20–F), paragraph
B.(15) of the General Instructions to
§ 249.240f of this chapter (Form 40–F),
paragraph C.(6) of the General
Instructions to § 249.306 of this chapter
(Form 6–K), § 240.17ad–27(d) of this
chapter (Rule 17ad–27(d) under the
Exchange Act), Note D.5 of § 240.14a–
101 of this chapter (Rule 14a–101 under
the Exchange Act), Item 1 of § 240.14c–
101 of this chapter (Rule 14c–101 under
the Exchange Act), General Instruction L
of § 240.14d–100 of this chapter (Rule
14d–100 under the Exchange Act),
General Instruction I to § 249.333 of this
chapter (Form F–SR), General
Instruction C.3.(g) of §§ 239.15A and
274.11A of this chapter (Form N–1A),
General Instruction I of §§ 239.14 and
274.11a–1 of this chapter (Form N–2),
General Instruction C.3.(h) of §§ 239.17a
and 274.11b of this chapter (Form N–3),
General Instruction C.3.(h) of §§ 239.17b
and 274.11c of this chapter (Form N–4),
General Instruction C.3.(h) of §§ 239.17c

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and 274.11d of this chapter (Form N–6);
General Instruction 2.(l) of § 274.12 of
this chapter (Form N–8B–2); General
Instruction 5 of § 239.16 of this chapter
(Form S–6); General Instruction C.4 of
§§ 249.331 and 274.128 of this chapter
(Form N–CSR); General Instruction A of
§ 249.1 of this chapter (Form 1); General
Instruction A of § 249b.200 of this
chapter (Form CA–1); §§ 242.829 and
831 of this chapter (Rules 829 and 831
of Regulation SE); or the Registration
Instructions to Form SBSEF (§ 249.1701
of this chapter), as applicable.
(b) * * *
(1) If the electronic filer is not a
management investment company
registered under 15 U.S.C. 80a et seq.
(the Investment Company Act of 1940),
a separate account as defined in 15
U.S.C. 77b(a)(14) (Section 2(a)(14) of the
Securities Act) registered under the
Investment Company Act of 1940, a
registered non-variable annuity issuer as
defined in Rule 405 under the Securities
Act (17 CFR 230.405), a business
development company as defined in
Section 2(a)(48) of the Investment
Company Act of 1940 (15 U.S.C. 80a–
2(a)(48)), a unit investment trust as
defined in Section 4(2) of the
Investment Company Act of 1940 (15
U.S.C. 80a–4), an entity subject to
§§ 240.15fk–1, 240.17a–5, 240.17a–12,
240.17h–2T, or 240.18a–7 of this
chapter (Rule 15fk–1, 17a–5, 17a–12,
17h–2T, or 18a–7 under the Exchange
Act), an exchange as defined in 15
U.S.C. 78c(a)(1) (Section 3(a)(1) of the
Exchange Act), or a clearing agency as
defined in 15 U.S.C. 78c(a)(23)(A)
(Section 3(a)(23) of the Exchange Act),
an Interactive Data File must consist of
only a complete set of information for
all periods required to be presented in
the corresponding data in the Related
Official Filing, no more and no less,
from all of the following categories:
*
*
*
*
*
(5) If an electronic filer is an entity
subject to §§ 240.15fk–1, 240.17a–5,
240.17a–12, 240.17h–2T, or 240.18a–7
of this chapter (Rule 15fk–1, 17a–5,
17a–12, 17h–2T, or 18a–7 under the
Exchange Act), an exchange as defined
in 15 U.S.C. 78c(a)(1) (Section 3(a)(1) of
the Exchange Act), a clearing agency as
defined in 15 U.S.C. 78c(a)(23)(A)
(Section 3(a)(23)(A) of the Exchange
Act), or is subject to §§ 242.800 through
242.835 (Regulation SE), an Interactive
Data File must consist of only a
complete set of information for all
periods required to be presented in the
corresponding data in the Related
Official Filing, no more and no less,
from all of the following categories, as
applicable:

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(i) For electronic filers of § 249.617 of
this chapter (Part III of Form X–17A–5):
the disclosures required by Items (a)
through (y) of that Form.
(ii) The disclosure provided pursuant
to Item 4 of § 249.328T of this chapter
(Form 17–H).
(iii) The report provided pursuant to
§ 240.15fk–1(c)(2)(ii)(A) of this chapter
(Rule 15fk–1(c)(2)(ii)(A) under the
Exchange Act).
(iv) The exhibits specified by General
Instruction A to § 249.1 of this chapter
(Form 1).
(v) The disclosure provided pursuant
to Schedule A and Exhibits C, F, H, J,
K, L, M, O, R, and S to § 249b.200 of this
chapter (Form CA–1).
(vi) The information provided
pursuant to § 240.17ad–27 of this
chapter (Rule 17ad–27 under the
Exchange Act).
(vii) For electronic filers subject to
Regulation SE, the content of documents
required to be filed electronically under
§§ 242.829 and 242.831 of this chapter
(Rules 829 and 831 of Regulation SE);
and the Registration Instructions to
§ 249.1701 of this chapter (Form
SBSEF), as applicable.
*
*
*
*
*
Note 1 to § 232.405: Section
229.601(b)(101) of this chapter (Item
601(b)(101) of Regulation S–K) specifies the
circumstances under which an Interactive
Data File must be submitted and the
circumstances under which it is permitted to
be submitted, with respect to §§ 239.11 of
this chapter (Form S–1), 239.13 of this
chapter (Form S–3), 239.25 of this chapter
(Form S–4), 239.18 of this chapter (Form S–
11), 239.31 of this chapter (Form F–1), 239.33
of this chapter (Form F–3), 239.34 of this
chapter (Form F–4), 249.310 of this chapter
(Form 10–K), 249.308a of this chapter (Form
10–Q), and 249.308 of this chapter (Form 8–
K). General Instruction F of § 249.311 of this
chapter (Form 11–K) specifies the
circumstances under which an Interactive
Data File must be submitted, and the
circumstances under which it is permitted to
be submitted, with respect to Form 11–K.
Paragraph (101) of Part II—Information not
Required to be Delivered to Offerees or
Purchasers of § 239.40 of this chapter (Form
F–10) specifies the circumstances under
which an Interactive Data File must be
submitted and the circumstances under
which it is permitted to be submitted, with
respect to Form F–10. Paragraph 101 of the
Instructions as to Exhibits of § 249.220f of
this chapter (Form 20–F) specifies the
circumstances under which an Interactive
Data File must be submitted and the
circumstances under which it is permitted to
be submitted, with respect to Form 20–F.
Paragraph B.(15) of the General Instructions
to § 249.240f of this chapter (Form 40–F) and
Paragraph C.(6) of the General Instructions to
§ 249.306 of this chapter (Form 6–K) specify
the circumstances under which an Interactive
Data File must be submitted and the

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circumstances under which it is permitted to
be submitted, with respect to §§ 249.240f
(Form 40–F) and 249.306 (Form 6–K) of this
chapter. Note D.5 of § 240.14a–101 of this
chapter (Schedule 14A) and Item 1 of
§ 240.14c–101 of this chapter (Schedule 14C)
specify the circumstances under which an
Interactive Data File must be submitted with
respect to Schedules 14A and 14C. General
Instruction L of § 240.14d–100 of this chapter
(Schedule TO) specifies the circumstances
under which an Interactive Data File must be
submitted with respect to Schedule TO.
Section 240.13a–21 of this chapter (Rule 13a–
21 under the Exchange Act) and General
Instruction I to § 249.333 of this chapter
(Form F–SR) specify the circumstances under
which an Interactive Data File must be
submitted, with respect to Form F–SR.
§§ 242.829 and 242.831 of this chapter (Rules
829 and 831 of Regulation SE) and the
Registration Instructions to § 249.1701 of this
chapter (Form SBSEF), as applicable, specify
the circumstances under which an Interactive
Data File must be submitted with respect to
filings made under Regulation SE. Item
601(b)(101) of Regulation S–K, paragraph
(101) of Part II—Information not Required to
be Delivered to Offerees or Purchasers of
Form F–10, paragraph 101 of the Instructions
as to Exhibits of Form 20–F, paragraph B.(15)
of the General Instructions to Form 40–F, and
paragraph C.(6) of the General Instructions to
Form 6–K all prohibit submission of an
Interactive Data File by an issuer that
prepares its financial statements in
accordance with 17 CFR 210.6–01 through
210.6–10 (Article 6 of Regulation S–X). For
an issuer that is a management investment
company or separate account registered
under the Investment Company Act of 1940
(15 U.S.C. 80a et seq.), a registered nonvariable annuity issuer as defined in Rule
405 under the Securities Act (17 CFR
230.405), a business development company
as defined in Section 2(a)(48) of the
Investment Company Act of 1940 (15 U.S.C.
80a–2(a)(48)), or a unit investment trust as
defined in Section 4(2) of the Investment
Company Act of 1940 (15 U.S.C. 80a–4),
General Instruction C.3.(g) of Form N–1A
(§§ 239.15A and 274.11A of this chapter),
General Instruction I of Form N–2 (§§ 239.14
and 274.11a–1 of this chapter), General
Instruction C.3.(h) of Form N–3 (§§ 239.17a
and 274.11b of this chapter), General
Instruction C.3.(h) of Form N–4 (§§ 239.17b
and 274.11c of this chapter), General
Instruction C.3.(h) of Form N–6 (§§ 239.17c
and 274.11d of this chapter), General
Instruction 2.(l) of Form N–8B–2 (§ 274.12 of
this chapter), General Instruction 5 of
§ 239.16 of this chapter (Form S–6), and
General Instruction C.4 of Form N–CSR
(§§ 249.331 and 274.128 of this chapter), as
applicable, specifies the circumstances under
which an Interactive Data File must be
submitted. For entities subject to
§§ 240.15fk–1, 240.17a–5, 240.17a–12,
240.17h–2T, or 240.18a–7 of this chapter
(Rule 15fk–1, 17a–5, 17a–12, 17h–2T, or 18a–
7 under the Exchange Act), §§ 240.15fk–
1(c)(2)(ii)(A), 240.17a–5(d)(6)(i), 240.17a–
5(k)(2), 240.17a–12(b)(6), 240.17a–12(k),
240.17a–12(l), 240.17a–12(m), 240.17h–
2T(a)(2), and 240.18a–7(c)(6) of this chapter

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(Rules 15fk–1(c)(2)(ii)(A), 17a–5(d)(6)(i), 17a–
5(k)(2), 17a–12(b)(6), 17a–12(k), 17a–12(l),
17a–12(m), 17h–2T(a)(2), and 18a–7(c)(6)
under the Exchange Act), as applicable,
specify the circumstances under which an
Interactive Data File must be submitted. For
an exchange as defined in 15 U.S.C. 78c(a)(1)
(Section 3(a)(1) of the Exchange Act), General
Instruction A of § 249.1 of this chapter (Form
1) specifies the circumstances under which
an Interactive Data File must be submitted.
For a clearing agency as defined in 15 U.S.C.
78c(a)(23)(A) (Section 3(a)(23)(A) of the
Exchange Act), General Instruction A of
§ 249.200b of this chapter (Form CA–1)
specifies the circumstances under which an
Interactive Data File must be submitted with
respect to § 249.200b of this chapter (Form
CA–1), and § 240.17ad–27(d) of this chapter
(Rule 17ad–27(d) under the Exchange Act)
specify the circumstances under which an
Interactive Data File must be submitted with
respect to the reports required under
§ 249.200b of this chapter (Form CA–1) and
§ 240.17ad–27 of this chapter (Rule 17ad–27
under the Exchange Act).

PART 240—GENERAL RULES AND
REGULATIONS, SECURITIES
EXCHANGE ACT OF 1934
9. Amend the authority citation for
part 240 by:
■ a. Removing the authority citation for
§§ 240.15Fh–1 through 240.15Fh–6 and
240.15Fk–1; and
■ b. Adding an authority citation for
§§ 240.15Fh–1 through 240.15Fh–6 and
240.15fk–1 in numerical order.
The addition reads as follows:
■

Authority: 15 U.S.C. 77c, 77d, 77g, 77j,
77s, 77z–2, 77z–3, 77eee, 77ggg, 77nnn,
77sss, 77ttt, 78c, 78c–3, 78c–5, 78d, 78e, 78f,
78g, 78i, 78j, 78j–1, 78j–4, 78k, 78k–1, 78l,
78m, 78n, 78n–1, 78o, 78o–4, 78o–10, 78p,
78q, 78q–1, 78s, 78u–5, 78w, 78x, 78dd, 78ll,
78mm, 80a–20, 80a–23, 80a–29, 80a–37, 80b–
3, 80b–4, 80b–11, 1681w(a)(1), 6801–6809,
6825, 7201 et seq., and 8302; 7 U.S.C.
2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C.
1350; Pub. L. 111–203, 939A, 124 Stat. 1376
(2010); and Pub. L. 112–106, sec. 503 and
602, 126 Stat. 326 (2012), unless otherwise
noted.

*

*

*

*

*

Sections 240.3a67–10, 240.3a71–3,
240.3a71–4, and 240.3a71–5 are also issued
under Pub. L. 111–203, section 761(b), 124
Stat. 1754 (2010), and 15 U.S.C. 78dd(c).
Sections 240.3a71–3 and 240.3a71–5 are
also issued under Pub. L. 111–203, sec.
761(b), 124 Stat. 1754 (2010), and 15 U.S.C.
78dd(c).

*

*

*

*

*

Sections 240.15Fh–1 through 240.15Fh–6
and 240.15fk–1 are also issued under sec.
943, Pub. L. 111–203, 124 Stat. 1376.

*

*

*

*

*

Section 240.19b–4 is also issued under 12
U.S.C. 5465(e).

*

*
*
*
*
10. Amend § 240.3a71–3 by revising
paragraph (d)(1)(vi) to read as follows:

■

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
§ 240.3a71–3 Cross-border security-based
swap dealing activity.

*

*
*
*
*
(d) * * *
(1) * * *
(vi) Notices and withdrawals of
notices by registered entity. Before an
associated person of the registered
entity described in paragraph (d)(1)(i) of
this section commences the activity
described in paragraph (d)(1)(i) of this
section, such registered entity shall have
filed a notice with the Commission (that
has not been withdrawn) that its
associated persons may conduct such
activity. Such registered entity shall file
this notice electronically on EDGAR in
accordance with the EDGAR Filer
Manual, as defined in 17 CFR 232.11
(Rule 11 of Regulation S–T), and in
accordance with the requirements of 17
CFR part 232 (Regulation S–T). A
registered entity whose associated
persons will no longer conduct the
activity described in paragraph (d)(1)(i)
of this section may withdraw, and an
entity that no longer is described in
paragraph (d)(1) of this section shall
promptly withdraw, its previously filed
notice by filing a withdrawal
electronically on EDGAR in accordance
with the EDGAR Filer Manual, as
defined in Rule 11 of Regulation S–T,
and in accordance with the
requirements of Regulation S–T. Such
notices and withdrawals shall be
publicly disseminated through the
Commission’s EDGAR system.
*
*
*
*
*
■ 11. Amend § 240.6a–1 by adding
paragraph (e) to read as follows:
§ 240.6a–1 Application for registration as a
national securities exchange or exemption
from registration based on limited volume.

ddrumheller on DSK120RN23PROD with RULES2

*

*
*
*
*
(e) Filings on Form 1 (§ 249.1 of this
chapter) submitted pursuant to this
chapter shall be filed electronically on
EDGAR in accordance with the
requirements of 17 CFR part 232
(Regulation S–T). Except as otherwise
specified on Form 1, the disclosure
required to be included in Exhibits D, E,
and I must be provided as an Interactive
Data File in accordance with § 232.405
of this chapter (Rule 405 of Regulation
S–T).
■ 12. Amend § 240.6a–2 by revising and
republishing paragraphs (a), through (d)
to read as follows:
§ 240.6a–2

Amendments to application.

(a) A national securities exchange, or
an exchange exempted from such
registration based on limited volume,
shall electronically file an amendment
to Form 1 (§ 249.1 of this chapter), in
accordance with § 240.6a–1(e), which

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shall set forth the nature and effective
date of the action taken and shall
provide any new information and
correct any information rendered
inaccurate, on Form 1 (§ 249.1 of this
chapter), within 10 days after any action
is taken that renders inaccurate, or that
causes to be incomplete, any of the
following:
(1) Information filed on Sections I and
II of Form 1, or amendment thereto; or
(2) Information filed as part of
Exhibits C, F, G, H, J, K or M, or any
amendments thereto.
(b) On or before June 30 of each year,
a national securities exchange, or an
exchange exempted from such
registration based on limited volume,
shall electronically file, as an
amendment to Form 1, in accordance
with § 240.6a–1(e), the following:
(1) Exhibits D and I as of the end of
the latest fiscal year of the exchange;
and
(2) Exhibits K, M, and N, which shall
be up to date as of the latest date
practicable within 3 months of the date
the amendment is filed.
(c) On or before June 30, 2025, and
every three years thereafter, a national
securities exchange, or an exchange
exempted from such registration based
on limited volume, shall electronically
file, as an amendment to Form 1, in
accordance with § 240.6a–1(e), complete
Exhibits A, B, C, and J. The information
filed under this paragraph (c) shall be
current as of the latest practicable date,
but shall, at a minimum, be up to date
within 3 months as of the date the
amendment is filed.
(d)(1) If an exchange, on an annual or
more frequent basis, publishes, or
cooperates in the publication of, any of
the information required to be filed by
paragraphs (b)(2) and (c) of this section,
in lieu of filing such information, an
exchange may:
(i) Identify on Form 1 the publication
in which such information is available,
the name, address, and telephone
number of the person from whom such
publication may be obtained, and the
price of such publication; and
(ii) Certify on Form 1 to the accuracy
of such information as of its publication
date.
(2) If an exchange keeps the
information required under paragraphs
(b)(2) and (c) of this section up to date
and makes it available to the
Commission and the public upon
request, in lieu of filing such
information, an exchange may certify on
Form 1 that the information is kept up
to date and is available to the
Commission and the public upon
request.

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7363

(3) If the information required to be
filed under paragraphs (b)(2) and (c) of
this section is available continuously on
an internet website controlled by an
exchange, in lieu of filing such
information with the Commission, such
exchange may:
(i) Provide on Form 1 the Uniform
Resource Locator(s) (URL(s)) of the
location(s) on the internet website
where such information may be found;
and
(ii) Certify on Form 1 that the
information available at such location(s)
is accurate as of its date and is free and
accessible (without any encumbrances
or restrictions) by the general public.
*
*
*
*
*
■ 13. Amend § 240.6a–3 by revising and
republishing paragraph (a) and revising
paragraph (b) introductory text to read
as follows:
§ 240.6a–3 Supplemental material to be
filed by exchanges.

(a)(1) A national securities exchange,
or an exchange exempted from such
registration based on limited volume,
shall file with the Commission any
material (including notices, circulars,
bulletins, lists, and periodicals) issued
or made generally available to members
of, or participants or subscribers to, the
exchange. Such material shall be
electronically filed with the
Commission on Form 1 (§ 249.1 of this
chapter), in accordance with § 240.6a–
1(e), within 10 days after issuing or
making such material available to
members, participants or subscribers.
(2) If the information required to be
filed under paragraph (a)(1) of this
section is available continuously on an
internet website controlled by an
exchange, in lieu of filing such
information with the Commission, such
exchange may:
(i) Provide on Form 1 the Uniform
Resource Locator(s) (URL(s)) of the
location(s) on the internet website
where such information may be found;
and
(ii) Certify on Form 1 that the
information available at such location(s)
is accurate as of its date and is free and
accessible (without any encumbrances
or restrictions) by the general public.
(b) Within 15 days after the end of
each calendar month, a national
securities exchange or an exchange
exempted from such registration based
on limited volume, shall electronically
file on Form 1 (§ 249.1 of this chapter),
in accordance with § 240.6a–1(e), a
report concerning the securities sold on
such exchange during the calendar
month. Such report shall set forth:
*
*
*
*
*

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

14. Revise and republish § 240.6a–4 to
read as follows:

■

ddrumheller on DSK120RN23PROD with RULES2

§ 240.6a–4 Notice of registration under
Section 6(g) of the Act, amendment to such
notice, and supplemental materials to be
filed by exchanges registered under Section
6(g) of the Act.

(a) Notice of registration. (1) An
exchange may register as a national
securities exchange solely for the
purposes of trading security futures
products by filing Form 1–N (§ 249.10 of
this chapter) (‘‘notice of registration’’),
in accordance with the instructions
contained therein, if:
(i) The exchange is a board of trade,
as that term is defined in the
Commodity Exchange Act (7 U.S.C.
1a(6)), that:
(A) Has been designated a contract
market by the Commodity Futures
Trading Commission and such
designation is not suspended by order of
the Commodity Futures Trading
Commission; or
(B) Is registered as a derivative
transaction execution facility under
Section 6(a) of the Commodity Exchange
Act (7 U.S.C. 8(a)) and such registration
is not suspended by the Commodity
Futures Trading Commission; and
(ii) Such exchange does not serve as
a marketplace for transactions in
securities other than:
(A) Security futures products; or
(B) Futures on exempted securities or
on groups or indexes of securities or
options thereon that have been
authorized under Section 2(a)(1)(C) of
the Commodity Exchange Act (7 U.S.C.
2(a)(1)(C)).
(2) Promptly after the discovery that
any information filed on Form 1–N
(§ 249.10 of this chapter) was inaccurate
when filed, the exchange shall file with
the Commission an amendment
correcting such inaccuracy.
(b) Amendment to notice of
registration. (1) A national securities
exchange registered pursuant to Section
6(g)(1) of the Act (15 U.S.C. 78f(g)(1))
(‘‘Security Futures Product Exchange’’)
shall file an amendment to Form 1–N
(§ 249.10 of this chapter), which shall
set forth the nature and effective date of
the action taken and shall provide any
new information and correct any
information rendered inaccurate, on
Form 1–N (§ 249.10 of this chapter),
within:
(i) Ten days after any action is taken
that renders inaccurate, or that causes to
be incomplete, any information filed on
Sections I through III of Form 1–N
(§ 249.10 of this chapter), or amendment
thereto; or
(ii) 30 days after any action is taken
that renders inaccurate, or that causes to

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be incomplete, any information filed as
part of Exhibit F to Form 1–N (§ 249.10
of this chapter), or any amendments
thereto.
(2) A Security Futures Product
Exchange shall maintain records
relating to changes in information
required in Exhibits C and E to Form 1–
N (§ 249.10 of this chapter) which shall
be current of as of the latest practicable
date, but shall, at a minimum, be up-todate within 30 days. A Security Futures
Product Exchange shall make such
records available to the Commission and
the public upon request.
(3) On or before June 30, 2023, and by
June 30 every year thereafter, a Security
Futures Product Exchange shall file, as
an amendment to Form 1–N (§ 249.10 of
this chapter), Exhibits F, H, and I, which
shall be current as of the latest
practicable date, but shall, at a
minimum, be up to date within three
months as of the date the amendment is
filed.
(4) On or before June 30, 2025, and by
June 30 every three years thereafter, a
Security Futures Product Exchange shall
file, as an amendment to Form 1–N
(§ 249.10 of this chapter), complete
Exhibits A, B, C, and E, which shall be
current as of the latest practicable date,
but shall, at a minimum, be up to date
within three months as of the date the
amendment is filed.
(5)(i) If a Security Futures Product
Exchange, on an annual or more
frequent basis, publishes, or cooperates
in the publication of, any of the
information required to be filed by
paragraphs (b)(3) and (4) of this section,
in lieu of filing such information, a
Security Futures Product Exchange may:
(A) Identify on Form 1–N the
publication in which such information
is available, the name, address, and
telephone number of the person from
whom such publication may be
obtained, and the price of such
publication; and
(B) Certify on Form 1–N to the
accuracy of such information as of its
publication date.
(ii) If a Security Futures Product
Exchange keeps the information
required under paragraphs (b)(3) and (4)
of this section up to date and makes it
available to the Commission and the
public upon request, in lieu of filing
such information, a Security Futures
Product Exchange may certify on Form
1–N that the information is kept up to
date and is available to the Commission
and the public upon request.
(iii) If the information required to be
filed under paragraphs (b)(3) and (4) of
this section is available continuously on
an internet website controlled by a
Security Futures Product Exchange, in

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lieu of filing such information with the
Commission, such Security Futures
Product Exchange may:
(A) Provide on Form 1–N the Uniform
Resource Locator(s) (URL(s)) of the
location(s) of the internet website where
such information may be found; and
(B) Certify on Form 1–N that the
information available at such location(s)
is accurate as of its date and is free and
accessible (without any encumbrances
or restrictions) by the general public.
(6)(i) The Commission may exempt a
Security Futures Product Exchange from
filing the amendment required by this
section for any affiliate or subsidiary
listed in Exhibit C to Form 1–N
(§ 249.10 of this chapter), as amended,
that either:
(A) Is listed in Exhibit C to Form 1
(§ 249.1 of this chapter) or to Form 1–
N (§ 249.10 of this chapter), as amended,
of one or more other national securities
exchanges; or
(B) Was an inactive affiliate or
subsidiary throughout the affiliate’s or
subsidiary’s latest fiscal year.
(ii) Any such exemption may be
granted upon terms and conditions the
Commission deems necessary or
appropriate in the public interest or for
the protection of investors, provided
however, that at least one national
securities exchange shall be required to
file the amendments required by this
section for an affiliate or subsidiary
described in paragraph (b)(6)(i) of this
section.
(7) If a Security Futures Product
Exchange has filed documents with the
Commodity Futures Trading
Commission, to the extent that such
documents contain information
satisfying the Commission’s
informational requirements, copies of
such documents may be filed with the
Commission in lieu of the required
written notice.
(c) Supplemental material to be filed
by Security Futures Product Exchanges.
(1)(i) A Security Futures Product
Exchange shall file with the
Commission any material related to the
trading of security futures products
(including notices, circulars, bulletins,
lists, and periodicals) issued or made
generally available to members of,
participants in, or subscribers to, the
exchange. Such material shall be filed
with the Commission within ten days
after issuing or making such material
available to members, participants, or
subscribers.
(ii) If the information required to be
filed under paragraph (c)(1)(i) of this
section is available continuously on an
internet website controlled by an
exchange, in lieu of filing such

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
information with the Commission, such
exchange may:
(A) Provide on Form 1–N the Uniform
Resource Locator(s) (URL(s)) of the
location(s) of the internet website where
such information may be found; and
(B) Certify on Form 1–N that the
information available at such location(s)
is accurate as of its date and is free and
accessible (without any encumbrances
or restrictions) by the general public.
(2) Within 15 days after the end of
each calendar month, a Security Futures
Product Exchange shall file a report
concerning the security futures products
traded on such exchange during the
previous calendar month. Such a report
shall state:
(i) For each contract of sale for future
delivery of a single security, the number
of contracts traded on such exchange
during the relevant calendar month and
the total number of shares underlying
such contracts traded; and
(ii) For each contract of sale for future
delivery of a narrow-based security
index, the number of contracts traded
on such exchange during the relevant
calendar month and the total number of
shares represented by the index
underlying such contracts traded.
(d) Filings on Form 1–N (§ 249.10 of
this chapter) submitted pursuant to this
section shall be filed electronically on
EDGAR in accordance with the
requirements of 17 CFR part 232
(Regulation S–T).
■ 15. Redesignate § 240.15Aa–1 as
§ 240.15aa–1 and revise newly
redesignated § 240.15aa–1 to read as
follows:
§ 240.15aa–1 Registration of a national or
an affiliated securities association.

Any application for registration of an
association as a national, or as an
affiliated, securities association shall be
submitted on Form 15A. Filings on
Form 15A (§ 249.801 of this chapter)
submitted pursuant to this section shall
be filed electronically on EDGAR in
accordance with the requirements of 17
CFR part 232 (Regulation S–T).
■ 16. Redesignate § 240.15Aj–1 as
§ 240.15aa–2 and revise and republish
newly redesignated § 240.15aa–2 to read
as follows.

ddrumheller on DSK120RN23PROD with RULES2

§ 240.15aa–2 Amendments and
supplements to registration statements of
securities associations.

Every association applying for
registration or registered as a national
securities association or as an affiliated
securities association shall keep its
registration statement up-to-date in the
manner prescribed below:
(a) Amendments. Promptly after the
discovery of any inaccuracy in the

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registration statement or in any
amendment or supplement thereto the
association shall file with the
Commission an amendment correcting
such inaccuracy.
(b) Current supplements. Promptly
after any change which renders no
longer accurate any information
contained or incorporated in the
registration statement or in any
amendment or supplement thereto the
association shall file with the
Commission a current supplement
setting forth such change, except that:
(1) No current supplements need be
filed with respect to changes in the
information called for in Exhibit B.
(2) Supplements setting forth changes
in the information called for in Exhibit
C need not be filed until 10 days after
the calendar month in which the
changes occur.
(3) If changes in the information
called for in Items (1) and (2) of Exhibit
C are reported in any record which is
published at least once a month by the
association and promptly filed with the
Commission, no current supplement
need be filed with respect thereto.
(c) Annual supplements. (1) Promptly
after March 1 of each year, the
association shall file with the
Commission an annual consolidated
supplement as of such date on Form
15A (§ 249.801 of this chapter) except
that:
(i) If the securities association
publishes or cooperates in the
publication of the information required
in Items 6(a) and 6(b) of Form 15A on
an annual or more frequent basis, in lieu
of filing such an item the securities
association may:
(A) Identify on Form 15A the
publication in which such information
is available, the name, address, and
telephone number of the person from
whom such publication may be
obtained, and the price thereof; and
(B) Certify on Form 15A to the
accuracy of such information as of its
date.
(ii) Promptly after March 1, 2025, and
every three years thereafter each
association shall file complete Exhibit A
to Form 15A. The information contained
in this exhibit shall be up-to-date as of
the latest practicable date within 3
months of the date on which these
exhibits are filed. If the association
publishes or cooperates in the
publication of the information required
in this exhibit on an annual or more
frequent basis, in lieu of filing such
exhibit the association may:
(A) Identify on Form 15A the
publication in which such information
is available, the name, address, and
telephone number of the person from

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7365

whom such publication may be
obtained, and the price thereof; and
(B) Certify on Form 15A to the
accuracy of such information as of its
date. If a securities association keeps the
information required in the exhibit upto-date and makes it available to the
Commission and the public upon
request, in lieu of filing such an exhibit
a securities association may certify on
Form 15A that the information is kept
up-to-date and is available to the
Commission and the public upon
request.
(2) Promptly after the close of each
fiscal year of the association, it shall file
with the Commission a supplement
setting forth its balance sheet as of the
close of such year and its income and
expense statement for such year.
(d) Filing, dating, etc. (1) Each
amendment or supplement, including
the annual consolidated supplement,
shall be submitted electronically on
Form 15A in a manner prescribed in
§ 240.15aa–1 (Rule 15aa–1).
(2) One amendment or supplement
may include any number of changes. In
addition to the formal filing of
amendments and supplements above
described, each association shall
electronically file with the Commission
copies of any notices, reports, circulars,
loose-leaf insertions, riders, new
additions, lists or other records of
changes covered by amendments or
supplements when, as and if such
records are made available to members
of the association.
■ 17. Redesignate § 240.15Fi–3 as
§ 240.15fi–3 and amend newly
redesignated § 240.15fi–3 by revising
paragraph (c) to read as follows:
§ 240.15fi–3 Security-based swap portfolio
reconciliation.

*

*
*
*
*
(c) Reporting of security-based swap
valuation disputes—(1) Notice
requirement. Each security-based swap
dealer and major security-based swap
participant shall promptly notify the
Commission, electronically through the
Commission’s EDGAR system, in
accordance with the EDGAR Filer
Manual, as defined in § 232.11 of this
chapter (Rule 11 of Regulation S–T), and
in accordance with the requirements of
17 CFR part 232 (Regulation S–T), and
any applicable prudential regulator, in a
form and manner acceptable to such
applicable prudential regulator, of any
security-based swap valuation dispute
in excess of $20,000,000 (or its
equivalent in any other currency), at
either the transaction or portfolio level,
if not resolved within:
(i) Three business days, if the dispute
is with a counterparty that is a security-

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based swap dealer or major securitybased swap participant; or
(ii) Five business days, if the dispute
is with a counterparty that is not a
security-based swap dealer or major
security-based swap participant.
(2) Amendments. Each security-based
swap dealer and major security-based
swap participant shall notify the
Commission, electronically through the
Commission’s EDGAR system, in
accordance with the EDGAR Filer
Manual, as defined in Rule 11 of
Regulation S–T, and in accordance with
the requirements of Regulation S–T, and
any applicable prudential regulator, in a
form and manner acceptable to such
applicable prudential regulator, if the
amount of any security-based swap
valuation dispute that was the subject of
a previous notice made pursuant to
paragraph (c)(1) of this section increases
or decreases by more than $20,000,000
(or its equivalent in any other currency),
at either the transaction or portfolio
level. Such amended notice shall be
provided to the Commission and any
applicable prudential regulator no later
than the last business day of the
calendar month in which the applicable
security-based swap valuation dispute
increases or decreases by the applicable
dispute amount.
*
*
*
*
*
■ 18. Redesignate § 240.15Fk–1 as
§ 240.15fk–1 and amend newly
redesignated § 240.15fk–1 by revising
paragraph (c)(2)(ii)(A) to read as follows:
§ 240.15fk–1 Designation of chief
compliance officer for security-based swap
dealers and major security-based swap
participants.

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*

*
*
*
*
(c) * * *
(2) * * *
(ii) * * *
(A) Be submitted to the Commission
electronically through the EDGAR
system as an Interactive Data File in
accordance with 17 CFR 232.405 (Rule
405 of Regulation S–T) within 30 days
following the deadline for filing the
security-based swap dealer’s or major
security-based swap participant’s
annual financial report with the
Commission pursuant to section 15F of
the Act and rules and regulations
thereunder;
*
*
*
*
*
■ 19. Amend § 240.17a–5 by:
■ a. Revising paragraphs (a)(2) and
(d)(6);
■ b. Adding new paragraph (e)(2)(iii);
■ c. Revising paragraphs (e)(3),
(f)(3)(v)(B), (i)(1)(ii), and (k);
■ d. Removing paragraph (o);
■ e. Redesignating paragraph (p) as
paragraph (o); and

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f. Adding new paragraph (p).
The revisions and additions read as
follows:

■

§ 240.17a–5 Reports to be made by certain
brokers and dealers.

*

*
*
*
*
(a) * * *
(2) The reports provided for in this
paragraph (a) that must be filed with the
Commission will be considered filed
when received at the Commission’s
principal office in Washington, DC, and
the regional office of the Commission
for the region in which the broker or
dealer has its principal place of
business. All reports filed pursuant to
this paragraph (a) will be deemed
confidential for the purposes of section
24(b) of the Act.
*
*
*
*
*
(d) * * *
(6)(i) Filing with the Commission. The
annual reports must be filed with the
Commission electronically on EDGAR
in accordance with the EDGAR Filer
Manual, as defined in 17 CFR 232.11
(Rule 11 of Regulation S–T) and must be
filed in accordance with the
requirements of 17 CFR part 232
(Regulation S–T). The annual reports
must be provided as an Interactive Data
File in accordance with 17 CFR 232.405
(Rule 405 of Regulation S–T).
(ii) Filing with other organizations.
The annual reports also must be filed
with the designated examining authority
for the broker or dealer and with the
Securities Investor Protection
Corporation (‘‘SIPC’’) if the broker or
dealer is a member of SIPC. Copies of
the reports must be provided to all selfregulatory organizations of which the
broker or dealer is a member, unless the
self-regulatory organization by rule
waives this requirement.
(e) * * *
(2) * * *
(iii) The broker or dealer must keep
the original oath or affirmation for a
period of not less than six years, the first
two years in an easily accessible place
and in accordance with the
requirements of § 240.17a–4 of this
chapter (Rule 17a–4) under the
Exchange Act.
(3) The annual reports filed under
paragraph (d) of this section may be
filed as:
(i) One public document; or
(ii) Two documents:
(A) A document consisting of the
Statement of Financial Condition, the
notes to the Statement of Financial
Condition, and the report of the
independent public accountant covering
the Statement of Financial Condition,
which is not confidential; and

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(B) A document containing the
balance of the annual reports for which
confidential treatment may be requested
and which will be deemed confidential
for the purposes of section 24(b) of the
Act. However, the annual reports,
including the confidential portions, will
be available for official use by any
official or employee of the U.S. or any
State, by national securities exchanges
and registered national securities
associations of which the broker or
dealer filing such a report is a member,
by the Public Company Accounting
Oversight Board, and by any other
person if the Commission authorizes
disclosure of the annual reports to that
person. Nothing contained in this
paragraph (e)(3) may be construed to be
in derogation of the rules of any
registered national securities association
or national securities exchange that give
to customers of a broker or dealer the
right, upon request to the broker or
dealer, to obtain information relative to
its financial condition.
(f) * * *
(3) * * *
(v) * * *
(B) The details of any issues arising
during the 24 months (or the period of
the engagement, if less than 24 months)
preceding the termination or new
engagement relating to any matter of
accounting principles or practices,
financial statement disclosure, auditing
scope or procedure, or compliance with
applicable rules of the Commission,
which issues, if not resolved to the
satisfaction of the former independent
public accountant, would have caused
the independent public accountant to
make reference to them in the report of
the independent public accountant. The
issues required to be reported include
both those resolved to the former
independent public accountant’s
satisfaction and those not resolved to
the former accountant’s satisfaction.
Issues contemplated by this section are
those that occur at the decision-making
level—that is, between principal
financial officers of the broker or dealer
and personnel of the accounting firm
responsible for rendering its report. The
notice must also state whether the
accountant’s report filed under
paragraph (d)(1)(i)(C) of this section for
any of the past two fiscal years
contained an adverse opinion or a
disclaimer of opinion or was qualified
as to uncertainties, audit scope, or
accounting principles, and must
describe the nature of each such adverse
opinion, disclaimer of opinion, or
qualification. The broker or dealer must
also request the former independent
public accountant to furnish the broker
or dealer with a letter addressed to the

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
Commission stating whether the
independent public accountant agrees
with the statements contained in the
notice of the broker or dealer and, if not,
stating the respects in which the
independent public accountant does not
agree. The broker or dealer must file
three copies of the notice and the
accountant’s letter, one copy of which
must be signed by the sole proprietor, a
general partner, or a duly authorized
corporate, limited liability company, or
limited liability partnership officer or
member, as appropriate, and by the
independent public accountant,
respectively.
*
*
*
*
*
(i) * * *
(1) * * *
(ii) Be signed;
*
*
*
*
*
(k) Supplemental reports. (1) Each
broker or dealer that computes certain of
its capital charges in accordance with
§ 240.15c3–1e shall file concurrently
with the annual reports a supplemental
report on management controls, which
must be prepared by a registered public
accounting firm (as that term is defined
in section 2(a)(12) of the Sarbanes-Oxley
Act of 2002 (15 U.S.C. 7201 et seq.)).
The supplemental report must indicate
the results of the accountant’s review of
the internal risk management control
system established and documented by
the broker or dealer in accordance with
§ 240.15c3–4. This review shall be
conducted in accordance with
procedures agreed upon by the broker or
dealer and the registered public
accounting firm conducting the review.
The agreed upon procedures are to be
performed and the report is to be
prepared in accordance with the rules
promulgated by the Public Company
Accounting Oversight Board. The
purpose of the review is to confirm that
the broker or dealer has established,
documented, and is in compliance with
the internal risk management controls
established in accordance with
§ 240.15c3–4. Before commencement of
the review and no later than December
10 of each year, the broker or dealer
must file a statement with the
Commission that includes:
(i) A description of the agreed-upon
procedures agreed to by the broker or
dealer and the registered public
accounting firm; and
(ii) A notice describing changes in
those agreed-upon procedures, if any. If
there are no changes, the broker or
dealer should so indicate.
(2) The supplemental report and
statement to be filed under paragraph
(k)(1) of this section must be filed with
the Commission electronically on

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EDGAR in the manner described by the
EDGAR Filer Manual, as defined in 17
CFR 232.11 (Rule 11 of Regulation S–T),
and must be filed in accordance with
the requirements of 17 CFR part 232
(Regulation S–T). The supplemental
report and statement must be provided
as an Interactive Data File in accordance
with 17 CFR 232.405 (Rule 405 of
Regulation S–T).
*
*
*
*
*
(p) Signatures. Any signature required
by this section may be a manual or
electronic signature. The signing
process for an electronic signature must,
at a minimum:
(1) Require the signatory to present a
physical, logical, or digital credential
that authenticates the signatory’s
individual identity;
(2) Reasonably provide for nonrepudiation of the signature;
(3) Provide that the signature be
attached, affixed, or otherwise logically
associated with the signature page or
document being signed; and
(4) Include a timestamp to record the
date and time of the signature.
■ 20. Amend § 240.17a–12 by:
■ a. Revising paragraphs (a)(2), (b)(6);
■ b. Revising and republishing
paragraph (c);
■ c. Revising paragraphs (g)(2), (j)(1),
(k), (l)(1), (m)(1), and (p); and
■ d. Adding paragraph (q).
The revisions and addition read as
follows:
§ 240.17a–12 Reports to be made by
certain OTC derivatives dealers.

(a) * * *
(2) The reports provided for in this
paragraph (a) must be filed with the
Commission electronically on the SEC
eFOCUS system. All reports filed
pursuant to paragraph (a) of this section
shall be deemed to be confidential for
the purposes of section 24(b) of the Act.
*
*
*
*
*
(b) * * *
(6) The annual audit report shall be
filed with the Commission
electronically on EDGAR in the manner
described by the EDGAR Filer Manual,
as defined in 17 CFR 232.11 (Rule 11 of
Regulation S–T), and must be filed in
accordance with the requirements of 17
CFR part 232 (Regulation S–T). The
annual audit report must be provided as
an Interactive Data File in accordance
with 17 CFR 232.405 (Rule 405 of
Regulation S–T).
(c) Nature and form of reports. The
financial statements filed pursuant to
paragraph (b) of this section shall be
prepared and filed in accordance with
the following requirements:
(1) An audit shall be conducted by a
certified public accountant who shall be

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7367

in fact independent as defined in
paragraph (f) of this section, and it shall
give an opinion covering the statements
filed pursuant to paragraph (b) of this
section.
(2) Attached to the report shall be an
oath or affirmation that, to the best
knowledge and belief of the person
making such oath or affirmation, the
financial statements and schedules are
true and correct and neither the OTC
derivatives dealer, nor any partner,
officer, or director, as the case may be,
has any significant interest in any
counterparty or in any account
classified solely as that of a
counterparty. The oath or affirmation
shall be made before a person duly
authorized to administer such oaths or
affirmations. If the OTC derivatives
dealer is a sole proprietorship, the oath
or affirmation shall be made by the
proprietor; if a partnership, by a general
partner; or if a corporation, by a duly
authorized officer.
(3) The OTC derivatives dealer must
keep the original oath or affirmation for
a period of not less than six years, the
first two years in an easily accessible
place and in accordance with the
requirements of § 240.17a–4 (Rule 17a–
4 under the Exchange Act).
(4) An OTC derivatives dealer may
request confidential treatment for all of
the statements filed pursuant to
paragraph (b) of this section and such
statements will be deemed confidential
for the purposes of section 24(b) of the
Act. However, such statements shall be
available for use by any official or
employee of the United States or by any
other person if the Commission
authorizes disclosure of such
information to that person.
*
*
*
*
*
(g) * * *
(2) Such notice shall state the date of
notification of the termination of the
engagement of the former certified
public accountant or the engagement of
the new certified public accountant, as
applicable, and the details of any
disagreements existing during the 24
months (or the period of the
engagement, if less) preceding such
termination or new engagement relating
to any matter of accounting principles
or practices, financial statement
disclosure, auditing scope or procedure,
or compliance with applicable rules of
the Commission, which disagreements,
if not resolved to the satisfaction of the
former certified public accountant,
would have caused the former certified
public accountant to make reference to
them in connection with the report on
the subject matter of the disagreements.
The disagreements required to be

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

reported in response to the preceding
sentence include both those resolved to
the former certified public accountant’s
satisfaction and those not resolved to
the former certified public accountant’s
satisfaction. Disagreements
contemplated by this section are those
that occur at the decision-making level
(i.e., between principal financial officers
of the OTC derivatives dealer and
personnel of the certified public
accounting firm responsible for
rendering its report). The notice shall
also state whether the certified public
accountant’s report on the financial
statements for any of the past two years
contained an adverse opinion or a
disclaimer of opinion or was qualified
as to uncertainties, audit scope, or
accounting principles, and describe the
nature of each such adverse opinion,
disclaimer of opinion, or qualification.
The OTC derivatives dealer shall also
request the former certified public
accountant to furnish the OTC
derivatives dealer with a letter
addressed to the Commission stating
whether the former certified public
accountant agrees with the statements
contained in the notice of the OTC
derivatives dealer and, if not, stating the
respects in which the former certified
public accountant does not agree. The
OTC derivatives dealer shall file three
copies of the notice and the
accountant’s letter, one copy of which
shall be signed by the sole proprietor, a
general partner, or a duly authorized
corporate, limited liability company, or
limited liability partnership officer or
member, as appropriate, and by the
independent public accountant,
respectively.
*
*
*
*
*
(j) * * *
(1) Technical requirements. The
certified public accountant’s report shall
be dated; be signed; indicate the city
and State where issued; and identify
without detailed enumeration the
financial statements and schedules
covered by the report.
*
*
*
*
*
(k) Accountant’s report on material
inadequacies and reportable conditions.
The OTC derivatives dealer shall file
concurrently with the annual audit
report a supplemental report by the
certified public accountant describing
any material inadequacies or any matter
that would be deemed to be a reportable
condition under U.S. Generally
Accepted Auditing Standards that are
unresolved as of the date of the certified
public accountant’s report. The report
shall also describe any material
inadequacies found to have existed
since the date of the previous audit. The

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supplemental report shall indicate any
corrective action taken or proposed by
the OTC derivatives dealer with regard
to any identified material inadequacies
or reportable conditions. If the audit did
not disclose any material inadequacies
or reportable conditions, the
supplemental report shall so state. This
supplemental report shall be filed with
the Commission electronically on
EDGAR in the manner described by the
EDGAR Filer Manual, as defined in 17
CFR 232.11 (Rule 11 of Regulation S–T),
and must be filed in accordance with
the requirements of 17 CFR part 232
(Regulation S–T). This supplemental
report must be provided as an
Interactive Data File in accordance with
17 CFR 232.405 (Rule 405 of Regulation
S–T).
(l) * * *
(1) The OTC derivatives dealer shall
file concurrently with the annual audit
report a supplemental report by the
certified public accountant indicating
the results of the certified public
accountant’s review of the OTC
derivatives dealer’s internal risk
management control system with
respect to the requirements of
§ 240.15c3–4. This review shall be
conducted in accordance with
procedures agreed to by the OTC
derivatives dealer and the certified
public accountant conducting the
review. The purpose of the review is to
confirm that the OTC derivatives dealer
has established, documented, and
maintained an internal risk management
control system in accordance with
§ 240.15c3–4, and is in compliance with
that internal risk management control
system. This supplemental report shall
be filed with the Commission
electronically on EDGAR in the manner
described by the EDGAR Filer Manual,
as defined in 17 CFR 232.11 (Rule 11 of
Regulation S–T) and must be filed in
accordance with the requirements of 17
CFR part 232 (Regulation S–T). This
supplemental report must be provided
as an Interactive Data File in accordance
with 17 CFR 232.405 (Rule 405 of
Regulation S–T).
*
*
*
*
*
(m) * * *
(1) The OTC derivatives dealer shall
file concurrently with the annual audit
report a supplemental report by the
certified public accountant indicating
the results of the certified public
accountant’s review of the broker’s or
dealer’s inventory pricing and modeling
procedures. This review shall be
conducted in accordance with
procedures agreed to by the OTC
derivatives dealer and by the certified
public accountant conducting the

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review. The purpose of the review is to
confirm that the pricing and modeling
procedures relied upon by the OTC
derivatives dealer conform to the
procedures submitted to the
Commission as part of its OTC
derivatives dealer application, and that
the procedures comply with the
qualitative and quantitative standards
set forth in § 240.15c3–1f. This
supplemental report shall be filed with
the Commission electronically on
EDGAR in the manner described by the
EDGAR Filer Manual, as defined in 17
CFR 232.11 (Rule 11 of Regulation S–T),
and must be filed in accordance with
the requirements of 17 CFR part 232
(Regulation S–T). This supplemental
report must be provided as an
Interactive Data File in accordance with
17 CFR 232.405 (Rule 405 of Regulation
S–T).
*
*
*
*
*
(p) Unless otherwise stated in this
rule, for purposes of filing requirements
as described in § 240.17a–12, these
filings shall be deemed to have been
accomplished upon receipt at the
Commission’s principal office in
Washington, DC.
(q) Any signature required by this
section may be a manual or electronic
signature. The signing process for an
electronic signature must, at a
minimum:
(1) Require the signatory to present a
physical, logical, or digital credential
that authenticates the signatory’s
individual identity;
(2) Reasonably provide for nonrepudiation of the signature;
(3) Provide that the signature be
attached, affixed, or otherwise logically
associated with the signature page or
document being signed; and
(4) Include a timestamp to record the
date and time of the signature.
■ 21. Revise § 240.17a–19 to read as
follows:
§ 240.17a–19 Form X–17A–19 Report by
national securities exchanges and
registered national securities associations
of changes in the membership status of any
of their members.

Every national securities exchange
and every registered national securities
association must file with the
Commission and with the Securities
Investor Protection Corporation such
information as is required by § 249.635
of this chapter on Form X–17A–19
within five business days of the
occurrence of the initiation of the
membership of any person or the
suspension or termination of the
membership of any member. Form X–
17A–19 must be filed with the
Commission electronically on EDGAR

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in accordance with the EDGAR Filer
Manual, as defined in 17 CFR 232.11
(Rule 11 of Regulation S–T), and must
be filed in accordance with the
requirements of Regulation S–T.
Nothing in this section shall be deemed
to relieve a national securities exchange
or a registered national securities
association of its responsibilities under
§ 240.17a–5(b)(5) except that, to the
extent a national securities exchange or
a registered national securities
association promptly files a report on
Form X–17A–19 including therewith,
inter alia, information sufficient to
satisfy the requirements of § 240.17a–
5(b)(5), it shall not be required to file a
report pursuant to § 240.17a–5(b). Upon
the occurrence of the events described
in this paragraph, every national
securities exchange and every registered
national securities association shall
notify in writing such member of its
responsibilities under § 240.17a–5(b).
■ 22. Revise § 240.17a–22 to read as
follows:
§ 240.17a–22 Supplemental material of
registered clearing agencies.

Within two business days after
issuing, or making generally available,
to its participants or to other entities
with whom it has a significant
relationship, any material (including,
for example, manuals, notices, circulars,
bulletins, lists or periodicals) that are
not otherwise required to be posted on
its internet website pursuant to any
requirement under Section 19(b) of the
Exchange Act or any rule under
§ 240.19b–4, a registered clearing agency
shall prominently post such material on
its internet website.
■ 23. Amend § 240.17h–2T by revising
paragraph (a) to read as follows:

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§ 240.17h–2T Risk assessment reporting
requirements for brokers and dealers.

(a) Reporting requirements of risk
assessment information required to be
maintained by section 240.17h–1T. (1)
Every broker or dealer registered with
the Commission pursuant to section 15
of the Act, and every municipal
securities dealer registered pursuant to
section 15B of the Act for which the
Commission is the appropriate
regulatory agency, unless exempt
pursuant to paragraph (b) of this section,
shall file a Form 17–H within 60
calendar days after the end of each fiscal
quarter. The Form 17–H for the fourth
fiscal quarter shall be filed within 60
calendar days of the end of the fiscal
year. The cumulative year-end financial
statements required by section 240.17h–
1T may be filed separately within 105
calendar days of the end of the fiscal
year.

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(2) The reports required to be filed
pursuant to paragraph (a)(1) of this
section must be filed with the
Commission electronically on EDGAR
in accordance with the EDGAR Filer
Manual, as defined in 17 CFR 232.11
(Rule 11 of Regulation S–T), and must
be filed in accordance with the
requirements of 17 CFR part 232
(Regulation S–T). The filings must be
provided as Interactive Data Files in
accordance with 17 CFR 232.405 (Rule
405 of Regulation S–T).
(3) For purposes of this section, the
term Material Associated Person shall
have the meaning used in § 240.17h–1T.
*
*
*
*
*
■ 24. Redesignate § 240.17Ab2–1 as
§ 240.17ab2–1 and revise newly
redesignated § 240.17ab2–1 to read as
follows:
§ 240.17ab2–1
agencies.

Registration of clearing

(a) An application for registration or
for exemption from registration as a
clearing agency, as defined in section
3(a)(23) of the Act, or an amendment to
any such application shall be filed
electronically with the Commission on
Form CA–1, in accordance with the
instructions thereto and paragraph (g)
below.
(b) Any applicant for registration or
for exemption from registration as a
clearing agency whose application is
filed with the Commission on or before
November 24, 1975, on and in
accordance with the instructions to
Form CA–1, with respect to the clearing
agency activities described in the
application shall, during the period
from December 1, 1975, until the
Commission grants registration, denies
registration or grants an exemption from
registration, be exempt from the
registration provisions of section 17A(b)
of the Act and the rules and regulations
thereunder and, unless the Commission
shall otherwise provide by rule or by
order, the provisions of the Act and the
rules and regulations thereunder which
would be applicable to clearing agencies
as a result of registration under the Act.
(c)(1) The Commission, upon the
request of a clearing agency, may grant
registration of the clearing agency in
accordance with sections 17A(b) and
19(a)(1) of the Act but exempt the
registrant from one or more of the
requirements as to which the
Commission is directed to make a
determination pursuant to paragraphs
(A) through (I) of section 17A(b)(3) of
the Act, provided that any such
registration shall be effective only for
eighteen months from the date the
registration is made effective (or such

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7369

longer period as the Commission may
provide by order).
(2) In the case of any clearing agency
registered in accordance with paragraph
(c)(1) of this section, not later than nine
months from the date such registration
is made effective the Commission either
will grant registration in accordance
with sections 17A(b) and 19(a)(1) of the
Act, without exempting the registrant
from one or more of the requirements as
to which the Commission is directed to
make a determination pursuant to
subparagraphs (A) through (I) of section
17A(b)(3) of the Act, or will institute
proceedings in accordance with section
19(a)(1)(B) of the Act to determine
whether registration should be denied at
the expiration of the registration granted
in accordance with paragraph (c)(1) of
this section.
(d) The electronic filing of an
amendment to an application for
registration or for exemption from
registration as a clearing agency, which
registration or exemption has not been
granted, or the electronic filing of
additional information or documents
prior to the granting of registration or an
exemption from registration shall
extend to ninety days from the date
such electronic filing is made (or to
such longer period as to which the
applicant consents) the period within
which the Commission shall grant
registration, institute proceedings to
determine whether such registration
shall be denied, or conditionally or
unconditionally exempt registrant from
the registration and other provisions of
section 17A of the Act or the rules or
regulations thereunder.
(e) If any information reported at
Items 1–3 of Form CA–1 is or becomes
inaccurate, misleading or incomplete for
any reason, whether before or after
registration or an exemption from
registration has been granted, the
registrant shall electronically file
promptly an amendment on Form CA–
1 correcting the inaccurate, misleading
or incomplete information.
(f) Every application for registration or
for exemption from registration as a
clearing agency or amendment to, or
additional information or document
electronically filed in connection with,
any such application shall constitute a
‘‘report’’ or ‘‘application’’ within the
meaning of sections 17, 17A, 19, and
32(a) of the Act.
(g)(1) Filings on Form CA–1 made
pursuant to this section shall be made
electronically and shall contain an
electronic signature.
(2) For the purposes of this section,
the term electronic signature means an
electronic entry in the form of a
magnetic impulse or other form of

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computer data compilation of any letter
or series of letters or characters
composed of a name, executed, adopted
or authorized as a signature.
(3) If the conditions of this section
and Form CA–1 are otherwise satisfied,
all filings submitted electronically on or
before 5:30 p.m. eastern standard time
or eastern daylight saving time,
whichever is currently in effect, on a
business day, shall be deemed filed on
that business day, and all filings
submitted after 5:30 p.m. eastern
standard time or eastern daylight saving
time, whichever is currently in effect,
shall be deemed filed on the next
business day. A filing would be deemed
timely filed if it is required to be filed
on a day that is not a business day and
it is filed on the next available business
day.
(4) For purposes of this section, the
term business day means any day other
than a Saturday, Sunday, Federal
holiday, a day that the Office of
Personnel Management has announced
that Federal agencies in the Washington,
DC, area, are closed to the public, a day
on which the Commission is subject to
a Federal Government shutdown, or a
day on which the Commission’s
Washington, DC, office is otherwise not
open for regular business.
■ 25. Amend § 240.18a–7 by revising
paragraphs (c)(6), (d), (e)(3)(v)(B),
(h)(1)(ii), and (j) to read as follows:
§ 240.18a–7 Reports to be made by certain
security-based swap dealers and major
security-based swap participants.

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*

*
*
*
*
(c) * * *
(6) Filing with the Commission. The
annual reports must be filed with the
Commission electronically on EDGAR
in accordance with the EDGAR Filer
Manual, as defined in 17 CFR 232.11
(Rule 11 of Regulation S–T), and must
be filed in accordance with the
requirements of 17 CFR part 232
(Regulation S–T). The annual reports
must be provided as an Interactive Data
File in accordance with 17 CFR 232.405
(Rule 405 of Regulation S–T).
(d) Nature and form of reports. The
annual reports filed pursuant to
paragraph (c) of this section must be
prepared and filed in accordance with
the following requirements:
(1)(i) Oath or affirmation. The
security-based swap dealer or major
security-based swap participant must
attach to the annual reports an oath or
affirmation that, to the best knowledge
and belief of the person making the oath
or affirmation:
(A) The financial report is true and
correct; and

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(B) Neither the registrant, nor any
partner, officer, director, or equivalent
person, as the case may be, has any
proprietary interest in any account
classified solely as that of a customer.
(ii) The oath or affirmation must be
made before a person duly authorized to
administer such oaths or affirmations. If
the security-based swap dealer or major
security-based swap participant is a sole
proprietorship, the oath or affirmation
must be made by the proprietor; if a
partnership, by a general partner; if a
corporation, by a duly authorized
officer; or if a limited liability company
or limited liability partnership, by the
chief executive officer, chief financial
officer, manager, managing member, or
those members vested with management
authority for the limited liability
company or limited liability
partnership.
(iii) The security-based swap dealer or
major security-based swap participant
must keep the original oath or
affirmation for a period of not less than
six years, the first two years in an easily
accessible place in accordance with the
requirements of § 240.18a-6 of this
chapter (Rule 18a-6 under the Exchange
Act).
(2) Confidentiality. The annual reports
filed under paragraph (c) of this section
may be filed as:
(i) One public document; or
(ii) Two documents:
(A) A document consisting of the
Statement of Financial Condition, the
notes to the Statement of Financial
Condition, and the report of the
independent public accountant covering
the Statement of Financial Condition,
which is not confidential; and
(B) A document containing the
balance of the annual reports for which
confidential treatment may be requested
and which will be deemed confidential
for the purposes of section 24(b) of the
Act. However, the annual reports,
including the confidential portions, will
be available for official use by any
official or employee of the U.S. or any
State, and by any other person if the
Commission authorizes disclosure of the
annual reports to that person. Nothing
contained in paragraph (d)(2) of this
section may be construed to be in
derogation of the rights of customers of
a security-based-swap dealer or major
security-based swap participant, upon
request to the security-based swap
dealer or major security-based swap
participant, to obtain information
relative to its financial condition.
(e) * * *
(3) * * *
(v) * * *
(B) The details of any issues arising
during the 24 months (or the period of

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the engagement, if less than 24 months)
preceding the termination or new
engagement relating to any matter of
accounting principles or practices,
financial statement disclosure, auditing
scope or procedure, or compliance with
applicable rules of the Commission,
which issues, if not resolved to the
satisfaction of the former independent
public accountant, would have caused
the independent public accountant to
make reference to them in the report of
the independent public accountant. The
issues required to be reported include
both those resolved to the former
independent public accountant’s
satisfaction and those not resolved to
the former accountant’s satisfaction.
Issues contemplated by this section are
those which occur at the decisionmaking level—that is, between principal
financial officers of the security-based
swap dealer or major security-based
swap participant and personnel of the
accounting firm responsible for
rendering its report. The notice must
also state whether the accountant’s
report filed under paragraph (c)(1)(i)(C)
of this section for any of the past two
fiscal years contained an adverse
opinion or a disclaimer of opinion or
was qualified as to uncertainties, audit
scope, or accounting principles, and
must describe the nature of each such
adverse opinion, disclaimer of opinion,
or qualification. The security-based
swap dealer or major security-based
swap participant must also request the
former independent public accountant
to furnish the security-based swap
dealer or .major security-based swap
participant with a letter addressed to the
Commission stating whether the
independent public accountant agrees
with the statements contained in the
notice of the security-based swap dealer
or major security-based swap
participant and, if not, stating the
respects in which the independent
public accountant does not agree. The
security-based swap dealer or major
security-based swap participant must
file three copies of the notice and the
accountant’s letter, one copy of which
must be signed by the sole proprietor, or
a general partner or a duly authorized
corporate, limited liability company, or
limited liability partnership officer or
member, as appropriate, and by the
independent public accountant,
respectively.
*
*
*
*
*
(h) * * *
(1) * * *
(ii) Be signed;
*
*
*
*
*
(j) Signatures. Any signature required
by this section may be a manual or

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
electronic signature. The signing
process for an electronic signature must,
at a minimum:
(1) Require the signatory to present a
physical, logical, or digital credential
that authenticates the signatory’s
individual identity;
(2) Reasonably provide for nonrepudiation of the signature;
(3) Provide that the signature be
attached, affixed, or otherwise logically
associated with the signature page or
document being signed; and
(4) Include a timestamp to record the
date and time of the signature.
■ 26. Amend § 240.19b–4 by revising
paragraphs (e)(2)(ii) and (j) to read as
follows:
§ 240.19b–4 Filings with respect to
proposed rule changes by self-regulatory
organizations.

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*

*
*
*
*
(e) * * *
(2) * * *
(ii) When relying on paragraph (e) of
this section, a self-regulatory
organization shall post the following
information, using the most recent
versions of the XML schema and the
associated PDF renderer as published on
the Commission’s website for all reports
required by this section, on its publicly
available internet website within five
business days after commencement of
trading a new derivative securities
product:
(A) Type of issuer of new derivative
securities product;
(B) Class of new derivative securities
product;
(C) Name of underlying instrument;
(D) If the underlying instrument is an
index, identify whether it is broad-based
or narrow-based;
(E) Ticker symbol(s) of new derivative
securities product;
(F) Market(s) upon which securities
composing the underlying instrument
trade;
(G) Settlement methodology of new
derivative securities product; and
(H) Position limits of new derivative
securities product (if applicable).
*
*
*
*
*
(j) Filings by a self-regulatory
organization submitted under 17 CFR
249.819 on Form 19b–4 electronically
shall contain an electronic signature.
For the purposes of this section, the
term electronic signature means an
electronic entry in the form of a
magnetic impulse or other form of
computer data compilation of any letter
or series of letters or characters
composing a name, executed, adopted
or authorized as a signature.
*
*
*
*
*

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27. Amend § 240.24b–2 by:
a. Revising and republishing
paragraph (b) introductory text; and
■ b. Adding paragraphs (j) and (k).
The revisions and additions read as
follows:
■
■

§ 240.24b–2 Nondisclosure of information
filed with the Commission and with any
exchange.

*

*
*
*
*
(b) Except as otherwise provided in
paragraphs (g), (h), (i), (j), and (k) of this
section, the person shall omit from
material filed the portion thereof which
it desires to keep undisclosed
(hereinafter called the confidential
portion). In lieu thereof, it shall indicate
at the appropriate place in the material
filed that the confidential portion has
been so omitted and filed separately
with the Commission. The person shall
file with the copies of the material filed
with the Commission:
*
*
*
*
*
(j)(1) A broker or dealer shall not omit
the confidential portion from the
material filed in electronic format
pursuant to §§ 240.17a–5(d), 240.17a–
5(k), 240.17a–12, or 240.17h–2T of this
chapter. In lieu of the procedures
described in paragraph (b) of this
section, a broker or dealer shall request
confidential treatment electronically for
any material filed in electronic format
pursuant to pursuant to §§ 240.17a–5(d),
240.17a–5(k), 240.17a–12, or 240.17h–
2T, of this chapter.
(2) A security-based swap dealer shall
not omit the confidential portion from
the material filed in electronic format
pursuant to § 240.18a–7(c) of this
chapter. In lieu of the procedures
described in paragraph (b) of this
section, a security–based swap dealer
shall request confidential treatment
electronically for any material filed in
electronic format pursuant to § 240.18a–
7(c) of this chapter.
(k) An entity shall not omit the
confidential portion from the material
filed in electronic format on Form CA–
1 pursuant to § 240.17ab2–1, and, in
lieu of the procedures described in
paragraph (b) of this section, may
request confidential treatment of
information provided on Form CA–1 by
completing Section X of Form CA–1.
PART 249–FORMS, SECURITIES
EXCHANGE ACT OF 1934
28. The authority citation for part 249
continues to read, in part, as follows:

■

Authority: 15 U.S.C. 78a et seq. and 7201
et seq.; 12 U.S.C. 5461 et seq.; 18 U.S.C. 1350;
Sec. 953(b) Pub. L. 111–203, 124 Stat. 1904;
Sec. 102(a)(3) Pub. L. 112–106, 126 Stat. 309
(2012), Sec. 107 Pub. L. 112–106, 126 Stat.

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7371

313 (2012), Sec. 72001 Pub. L. 114–94, 129
Stat. 1312 (2015), and secs. 2 and 3 Pub. L.
116–222, 134 Stat. 1063 (2020), unless
otherwise noted.

*

*

*

*

*

Section 249.617 is also issued under Pub.
L. 111–203, 939, 939A, 124. Stat. 1376 (2010)
(15 U.S.C. 78c, 15 U.S.C. 78o–7 note).

*

*
*
*
*
29. Revise Form 1 (referenced in
§ 249.1).

■

Note: Form 1 is attached as Appendix 1 to
this document. Form 1 will not appear in the
Code of Federal Regulations.

30. Revise Form 1–N (referenced in
§ 249.10).

■

Note: Form 1–N is attached as Appendix 2
to this document. Form 1–N will not appear
in the Code of Federal Regulations.

31. Amend Form X–17A–5
(referenced in § 249.617) by.
■ a. In Part II:
■ (i) In the Cover Page section of the
instructions, adding the following text
after ‘‘The cover page must be
completed in its entirety. If a line does
not apply, the firm should write ‘‘None’’
or ‘‘N/A’’ on the line, as applicable.’’:
‘‘The cover page of the FOCUS Report
includes signature lines for the
principal executive officer or
comparable officer, principal financial
officer or comparable officer, and
principal operations officer or
comparable officer. The firm must
obtain manual or electronic signatures
from at least the firm’s principal
executive officer or principal financial
officer (or the comparable officer). The
signing process for an electronic
signature must, at a minimum: (1)
Require the signatory to present a
physical, logical, or digital credential
that authenticates the signatory’s
individual identity; (2) Reasonably
provide for non-repudiation of the
signature; (3) Provide that the signature
be attached, affixed, or otherwise
logically associated with the signature
page or document being signed; and (4)
Include a timestamp to record the date
and time of the signature.’’;
■ (ii) Revising the Computation of
Minimum Regulatory Capital
Requirements section, Line 1 in the
Statement of Income (Loss) or Statement
of Comprehensive Income, As
Applicable section, the Computation for
Determination of Customer Reserve
Requirements section, the Computation
for Determination of PAB Requirements
section, and the Computation of CFTC
Minimum Capital Requirements section;
■ (iii) Removing the following
instruction from the Computation of
Minimum Regulatory Capital
Requirements (Broker-Dealer) section:
■

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

3870 Ratio requirement—2% of
aggregate debit items. FCMs must report
here the greater of:
• 2% of aggregate debit items, or
• 8% of funds required to be
segregated pursuant to the Commodity
Exchange Act.

(iv) Replacing the instructions for the
Computation of CFTC Minimum Capital
Requirements section;
■ b. In Part IIA:
■ (i) On the cover page, removing the
words ‘‘Manual signatures of:’’ and
adding in their place ‘‘Signatures of:’’;

(ii) In lines 11 and 15 of the
‘‘Computation of Net Capital
Requirement’’ section, removing the
words ‘‘line 19’’ and adding in their
place ‘‘line 18’’.

■

(iii) In the "Computation of Alternate Net Capital Requirement" section,
adding new line 26 after line 25.A. that reads as follows: "26. Percentage of debt to debt-equity
total computed in accordance with Rule 15c3-l(d) ........................ %_ _ _ _ __
13860~".

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includes signature lines for the
principal executive officer or
comparable officer, principal financial
officer or comparable officer, and
principal operations officer or
comparable officer. The firm must
obtain manual or electronic signatures
from at least the firm’s principal
executive officer or principal financial
officer (or the comparable officer). The
signing process for an electronic
signature must, at a minimum: (1)
Require the signatory to present a
physical, logical, or digital credential
that authenticates the signatory’s
individual identity; (2) Reasonably
provide for non-repudiation of the
signature; (3) Provide that the signature
be attached, affixed, or otherwise
logically associated with the signature
page or document being signed; and (4)
Include a timestamp to record the date
and time of the signature.’’
■ d. In Part III removing the notary
public signature line.

■

Note: Form X–17A–5 is attached as
Appendix 3 to this document. Form X–17A–
5 will not appear in the Code of Federal
Regulations.

■

32. Amend Form X–17A–19
(referenced in § 249.635) by:
■ a. Revising lines 1, 4, and 5;
■ b. In General Instructions by:
■ i. Revising instructions 2 and 3;
■ ii. Removing instruction 4;
■ iii. Redesignating instructions 5
through 8 as instructions 4 through 7;
and
■ iv. Revising newly redesignated
instruction 6.

Note: Form 19b–4 is attached as Appendix
6 to this document. Form 19b–4 will not
appear in the Code of Federal Regulations.

Note: Form X–17A–19 is attached as
Appendix 4 to this document. Form X–17A–
19 will not appear in the Code of Federal
Regulations.

*

■

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33. Revise and republish § 249.801 to
read as follows:

§ 249.801 Form 15A, for application for
registration as a national securities
association or affiliated securities
association.

This form shall be filed as an
application for registration as a national
securities association or as an affiliated
securities association pursuant to
§ 240.15aa–1 of this chapter (Rule 15aa–
1).
■ 34. Redesignate Form X–15AA–1
(referenced in § 249.801) as Form 15A
and revise newly redesignated Form
15A.
Note: Form 15A is attached as Appendix 5
to this document. Form 15A will not appear
in the Code of Federal Regulations.
§ 249.802
■

[Removed and Reserved]

35. Remove and reserve § 249.802.

§ 249.803

[Removed and Reserved]

36. Remove and reserve § 249.803.
■ 37. Amend Form 19b–4 (referenced in
§ 249.819) by revising General
Instructions section F.

PART 249b—FURTHER FORMS,
SECURITIES EXCHANGE ACT OF 1934
38. The general authority citation for
part 249b continues to read as follows:

■

Authority: 15 U.S.C. 78a et seq., unless
otherwise noted;

*
*
*
*
39. Revise Form CA–1 (referenced in
§ 249b.200).

■

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ER21JA25.224

(iv) In the instructions, adding the
following text in the ‘‘Filing
Requirements for Part IIA’’ section as a
second new paragraph after ‘‘Part IIA
shall be filed monthly by such of these
firms which receive written notice
pursuant to Rule 17a–5(a)(2)(iv) that
they have exceeded parameters set by
the self-regulators.’’: ‘‘The cover page of
the FOCUS Report includes signature
lines for the principal executive officer
or managing partner, principal financial
officer or partner, and principal
operations officer or partner. The firm
must obtain manual or electronic
signatures from at least the firm’s
principal executive officer or principal
financial officer (or the comparable
officer). The signing process for an
electronic signature must, at a
minimum: (1) Require the signatory to
present a physical, logical, or digital
credential that authenticates the
signatory’s individual identity; (2)
Reasonably provide for non-repudiation
of the signature; (3) Provide that the
signature be attached, affixed, or
otherwise logically associated with the
signature page or document being
signed; and (4) Include a timestamp to
record the date and time of the
signature.’’
■ c. In Part IIC:
■ (i) Revising the Balance Sheet,
Regulatory Capital, and Income
Statement sections; and
■ (ii) Amend the instructions to the
Cover Page section of Part IIC of Form
X–17A–5 (referenced in § 249.617 of
this chapter) by adding the following
text after ‘‘The cover page must be
completed in its entirety. If a line does
not apply, the firm should write ‘‘None’’
or ‘‘N/A’’ on the line, as applicable.’’:
‘‘The cover page of the FOCUS Report
■

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
Note: Form CA–1 is attached as Appendix
7 to this document. Form CA–1 will not
appear in the Code of Federal Regulations.

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By the Commission.

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Dated: December 16, 2024.
Sherry R. Haywood,
Assistant Secretary.

Appendix 1—Form 1
BILLING CODE 8011–P

Note: The following appendices will not
appear in the Code of Federal Regulations.

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

United States Securities and Exchange Commission
Washington, DC 20549
Form 1 Application for, and Amendments to Application for, Registration as a National
Securities Exchange or Exemption from Registration, and Supplemental Materials and
Reports

WARNING: Failure to keep this form current and to file accurate supplementary information on
a timely basis, or the failure to keep accurate books and records or otherwise comply with the
provisions oflaw applying to the conduct of the exchange would violate the Federal securities
laws and may result in disciplinary, administrative, or criminal action.
INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACTS MAY CONSTITUTE
CRIMINAL VIOLATIONS.

{Name of entity} is making this filing pursuant to the following Rule: (select one)
□

Rule 6a-1 Application
□

□

Initial (select type of application)
□

National Securities Exchange

□

Exemption from registration based on limited volume

□

Rule 6a-1 (b),(c) or (d) Amendment to Application - Amendment ####

□

Consent to Extension of Time
■
Date Extension Expires: mm/dd/yyyy

□

Withdrawal of Application

Rule 6a-2(a) Amendment to Registration
□

Effective date of action taken: mm/dd/yyyy

□

Rule 6a-2(b) Annual Filing

□

Rule 6a-2(c) Triennial Filing for Year: YYYY

□

Rule 6a-3(a) Supplemental Materials

□

Rule 6a-3(b) Report of securities sold during calendar month

Section I: - Entity Contact Information
□

Check Box if there is a change in information previously filed.

1. Primary Street Address (Do not use a P.O. Box)

City_ _ _ _ _ _ _ _ _ _ , State_ _ _ Zip Code_ _ __
2. Mailing Address:

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□

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Street: - - - - - - - - - - - - - - -

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

7375

Street: - - - - - - - - - - - - City_ _ _ _ _ _ _ _ _ , State_ _ _ Zip Code_ _ __
3. Business Telephone (
4. Facsimile (if any) (

) __-_ __
) __-_ __

5. Fiscal Year End: mm/dd
6. Legal Status (select one)
□ Sole Proprietorship
□ Corporation
□ Partnership
□ Limited Liability Company
□ Other (Specify): _ _ _ _ _ _ _ _ __
If other than a sole proprietor, please provide the following:
a) Date exchange obtained legal status (~ date of incorporation):

mm/dd/yyyy

b) State/Country of formation:
c) Statute under which exchange was organized: _ _ _ _ _ _ _ _ __
Section II: - Name and address of Counsel for (Entity Name)

Name of Firm:
First Name:
Last Name:
Title:
Street: - - - - - - - - - - - - City_ _ _ _ _ _ _ _ _ _ , State_ _ _ Zip Code_ _ _ __
Email:
Section III- Rule 6a-3(a) (select one)
□

Provide all supplemental materials required under Rule 6a-3(a)(l) (including notices,
circulars, bulletins, lists and periodicals) issued or made generally available to members of,
or participants or subscribers to, the exchange. Such material shall be filed with the
Commission within 10 days after issuing or making such material available to members,
participants or subscribers.

□

Section IV - Rule 6a-3(b)

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In lieu of filing the supplemental material required under Rule 6a-3(a)(l) the {entity}
certifies that such information is available continuously at the internet website indicated
below and is free and accessible (without any encumbrances or restrictions) by the general
public, and further certifies that the site is controlled by the exchange and the information is
accurate as of the date of this filing.
Please enter URL(s): _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

7376

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Rule 6a-3(b) requires that within 15 days after the end of each calendar month, a national
securities exchange or an exchange exempted from such registration based on limited volume,
shall file a report concerning the securities sold on such exchange during the calendar month.
The report shall set forth:
(1) The number of shares of stock sold and the aggregate dollar amount of such stock sold;
(2) The principal amount of bonds sold and the aggregate dollar amount of such bonds sold;
and
(3) The number ofrights and warrants sold and the aggregate dollar amount of such rights
and warrants sold.
Report of securities sold during calendar month ended mm/dd/yyyy
Section V - Exhibits

Exhibit A:
A copy of the
constitution, articles of
incorporation or
association with all
subsequent
amendments, and of
existing bylaws or
corresponding rules or
instruments, whatever
the name, of the
exchange.

□
In lieu of
filing {entity}
certifies that
the information
maybe
obtained below
and is accurate
as of the
publication
date:

Name of
Publication:
Name
Address
Telephone#
Price of
Publication
$-

□
In lieu of
filing
{entity}
certifies that
the
information
requested
under this
exhibit is
kept up to
date and is
available to
the
Commission
and the
public upon
request.

□ In lieu of filing {entity}
certifies that the information
requested under this exhibit
is continuously available at
the internet website below,
which is controlled by
{entity}, and the information
is accurate as of the date of
this filing and is free and
accessible (without any
encumbrances or
restrictions) by the general
public

□
In lieu of
filing
{entity}
certifies that
the
information

□ In lieu of filing {entity}
certifies that the information
requested under this exhibit
is continuously available at
the internet website below,
which is controlled b

URL(s):

Exhibit B:
A copy of all written
rulings, settled
practices having the
effect of rules, and
interpretations of the

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□
In lieu of
filing {entity}
certifies that
the information
maybe
obtained below

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Date of
Publication:
mm/dd/

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Governing Board or
other committee of the
exchange in respect of
any provisions of the
constitution, bylaws,
rules, or trading
practices of the
exchange which are
not included in Exhibit
A.

and is accurate
as of the
publication
date:
Name of
Publication:
Name
Address
Telephone#
Price of
Publication
$

requested
under this
exhibit is
kept up to
date and is
available to
the
Commission
and the
public upon
request.

{entity}, and the information
is accurate as of the date of
this filing and is free and
accessible (without any
encumbrances or
restrictions) by the general
public

□

□

7377

URL(s):

Date of
Publication:
mm/dd/
□

For each subsidiary or
affiliate of the exchange,
and for any entity with
whom the exchange has
a contractual or other
agreement relating to
the operation of an
electronic trading
system to be used to
effect transactions on
the exchange
("System"), provide the
following information:
1. Name and address of
organization.
2. Form of organization
~ ' association,
corporation,
partnership, etc.).
3. Name of state and
statute citation under
which organized.
Date of incorporation
in resent form.

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In lieu of
filing {entity}
certifies that
the information
maybe
obtained below
and is accurate
as of the
publication
date:
Name of
Publication:
Name
Address
Telephone#
Price of
Publication
$

In lieu of
filing
{entity}
certifies that
the
information
requested
under this
exhibit is
kept up to
date and is
available to
the
Commission
and the
public upon
request.

In lieu of filing {entity}
certifies that the information
requested under this exhibit
is continuously available at
the internet website below,
which is controlled by
{entity}, and the information
is accurate as of the date of
this filing and is free and
accessible (without any
encumbrances or
restrictions) by the general
public
URL(s):

Date of
Publication:
mm/dd/yyyy

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Exhibit C:

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

4. Brief description of
nature and extent of
affiliation.
5. Brief description of
business or functions.
Description should
include
responsibilities with
respect to operation
of the System and/or
execution, reporting,
clearance, or
settlement of
transactions in
connection with
operation of the
System.
6. A copy of the
constitution.
7. A copy of the articles
of incorporation or
association including
all amendments.
8. A copy of existing
bylaws or
corresponding rules
or instruments.
9. The name and title of
the present officers,
governors,members
of all standing
committees, or
persons performing
similar functions.
10. An indication of
whether such
business or
organization ceased
to be associated with
the exchange during
the previous year,
and a brief statement
of the reasons for

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ddrumheller on DSK120RN23PROD with RULES2

7378

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

7379

Exhibit D:

Not Applicable

Not
Applicable

Not Applicable

Not Applicable

Not
Applicable

Not Applicable

For each subsidiary or
affiliate of the exchange,
provide unconsolidated
financial statements for
the latest fiscal year.
Such financial
statements shall consist,
at a minimum, of a
balance sheet and an
income statement with
such footnotes and other
disclosures as are
necessary to avoid
rendering the financial
statements misleading.
If any affiliate or
subsidiary is required
by another Commission
rule to submit annual
financial statements, a
statement to that effect,
with a citation to the
other Commission rule,
may be provided in lieu
of the financial
statements required
here.

ddrumheller on DSK120RN23PROD with RULES2

Exhibit E:
Describe the manner of
operation of the System.
This description should
include the following:
1. The means of access
to the System.
2. Procedures
governing the entry
and dis la of

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21JAR2

ER21JA25.040

termination of the
association.

7380

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

4.
5.

6.

7.
8.

ddrumheller on DSK120RN23PROD with RULES2

Exhibit F:

Not Applicable

A complete set of all
forms pertaining to:
1. Application for
membership,
artici ation, or

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Not
Applicable

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Not Applicable

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21JAR2

ER21JA25.041

3.

quotations and
orders in the System.
Procedures
governing the
execution, reporting,
clearance and
settlement of
transactions in
connection with the
System.
Proposed fees.
Procedures for
ensuring compliance
with System usage
guidelines.
The hours of
operation of the
System, and the date
on which exchange
intends to commence
operation of the
System.
Attach a copy of the
users' manual.
If exchange proposes
to hold funds or
securities on a
regular basis,
describe the controls
that will be
implemented to
ensure safety of those
funds or securities.

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

7381

subscription to the
entity.
2. Application for
approval as a
person associated
with a member,
participant, or
subscriber of the
entity.
3. Any other similar
materials.
Exhibit G:
A complete set of all
forms of financial
statements, reports, or
questionnaires required
of members, participants,
subscribers, or any other
users relating to financial
responsibility or
minimum capital
requirements for such
members, participants,
or any other users.
Provide a table of
contents listing the forms
included in this Exhibit

Not Applicable

Not
Applicable

Not Applicable

Not Applicable

Not
Applicable

Not Applicable

Exhibit H:
A complete set of
documents composing
the exchange's listing
applications, including
any agreements required
to be executed in
connection with listing
and a schedule of listing
fees. If the exchange
does not list securities,

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ER21JA25.042

ddrumheller on DSK120RN23PROD with RULES2

G.

7382

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Exhibit I:

Not Applicable

For the latest fiscal year
of the exchange, audited
financial statements
which are prepared in
accordance with, or in
the case of a foreign
exchange, reconciled
with, United States
generally accepted
accounting principles,
and are covered by a
report prepared by an
independent public
accountant. If an
exchange has no
consolidated subsidiaries,
it shall file audited
financial statements
under Exhibit I alone
and need not file a
separate unaudited
financial statement for
the exchange under
Exhibit D.

ddrumheller on DSK120RN23PROD with RULES2

Exhibit J:
A list of the officers,
governors, members of
all standing committees,
or persons performing
similar functions, who

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□ In lieu of
filing {entity}
certifies that
the information
maybe
obtained below

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Not
Applicable

Not Applicable

□ In lieu of
filing
{entity}
certifies that
the
information

□ In lieu of filing {entity}
certifies that the information
requested under this exhibit
is continuously available at
the internet website below,
which is controlled by

Sfmt 4725

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21JAR2

ER21JA25.043

provide a brief
description of the criteria
used to determine what
securities may be traded
on the exchange. Provide
a table of contents listing
the forms included in this
Exhibit H.

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

ddrumheller on DSK120RN23PROD with RULES2

Exhibit K:
This Exhibit is applicable
only to exchanges that
have one or more
owners, shareholders, or
partners that are not also
members of the
exchange.If the exchange
is a corporation, please
provide a list of each
shareholder that directly
owns 5% or more of a
class of a voting security
of the exchange. If the
exchange is a
partnership, please
provide a list of all
general partners and
those limited and special
partners that have the
right to receive upon
dissolution, or have
contributed, 5% or more
of the artnershi 's

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and is accurate
as of the
publication
date:
Name of
Publication:
Name
Address
Telephone#
Price of
Publication
$

requested
under this
exhibit is
kept up to
date and is
available to
the
Commission
and the
public upon
request.

{entity}, and the information
is accurate as of the date of
this filing and is free and
accessible (without any
encumbrances or
restrictions) by the general
public

□ In lieu of
filing
{entity}
certifies that
the
information
requested
under this
exhibit is
kept up to
date and is
available to
the
Commission
and the
public upon
request.

□ In lieu of filing {entity}
certifies that the information
requested under this exhibit
is continuously available at
the internet website below,
which is controlled by
{entity}, and the information
is accurate as of the date of
this filing and is free and
accessible (without any
encumbrances or
restrictions) by the general
public

URL(s):

Date of
Publication:
mm/dd/yyyy

□ In lieu of
filing {entity}
certifies that
the information
maybe
obtained below
and is accurate
as of the
publication
date:

Name of
Publication:
Name
Address
Telephone#
Price of
Publication
$

URL(s):

Date of
Publication:
mm/dd/yyyy

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21JAR2

ER21JA25.044

presently hold or have
held their offices or
positions during the
previous year, indicating
the following for each:
1. Name.
2. Title.
3. Dates of
commencement and
termination of term
of office or position.
4. Type of business in
which each is
primarily engaged
~ ' floor broker,
specialist, odd lot
dealer, etc.).

7383

7384

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Exhibit L:

Not Applicable

Not
Applicable

Not Applicable

□
In lieu of
filing {entity}
certifies that
the information
maybe
obtained below
and is accurate
as of the

□
In lieu of
filing
{entity}
certifies that
the
information
requested
under this

□ In lieu of filing {entity}
certifies that the information
requested under this exhibit
is continuously available at
the internet website below,
which is controlled by
{entity}, and the information
is accurate as of the date of

Describe the exchange's
criteria for membership
in the exchange.
Describe conditions
under which members
may be subject to
suspension or
termination with regard
to the exchange.
Describe procedures
that will be involved in
the suspension or
termination of a
member.

ddrumheller on DSK120RN23PROD with RULES2

Exhibit M:
Provide an alphabetical
list of all members,
participants, subscribers
or other users, including
the following
information:
1. Name;

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21JAR2

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capital. For each of the
persons listed in the
Exhibit K, please provide
the following:
1. Full legal name;
2. Title or Status;
3. Date title or status
was acquired;
4. Approximate
ownership interest;
and
5. Whether the person
has control, a term
that is defined in the
instructions to this
Form.

2. Date of election to
membership or
acceptance as a
participant,
subscriber or other
user;
3. Principal business
address and
telephone number;
4. Ifmember,
participant,
subscriber or other
user is an individual,
the name of the entity
with which such
individual is
associated and the
relationship of such
individual to the
entity(£:.& partner,
officer, director,
employee, etc.);
5. Describe the type of
activities primarily
engaged in by the
member, participant,
subscriber, or other
user (£:.& floor
broker, specialist,
odd lot dealer, other
market maker,
proprietary trader,
non-broker dealer,
inactive or other
functions). A person
shall be "primarily
engaged" in an
activity or function
for purposes of this
item when that
activity or function is
the one in which that

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publication
date:
Name of
Publication:
Name
Address
Telephone#
Price of
Publication
$_

exhibit is
kept up to
date and is
available to
the
Commission
and the
public upon
request.

7385

this filing and is free and
accessible (without any
encumbrances or
restrictions) by the general
public
URL(s):

Date of
Publication:
mm/dd/yyyy

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21JAR2

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

7386

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

the majority of their
time. When more
than one type of
person at an entity
engages in any of the
six types of activities
or functions
enumerated in this
item, identify each
type~
proprietary, trader,
Registered
Competitive Trader
and Registered
Competitive Market
Maker) and state the
number of members,
participants,
subscribers, or other
users in each; and
6. The class of
membership,
participation or
subscription or other
access.

Provide a schedule for
each of the following:
1. The securities listed
in the exchange,
indicating for each
the name of the
issuer and a
description of the
security;
2. The securities
admitted to unlisted
trading privileges,
indicating for each
the name of the
issuer and a

VerDate Sep<11>2014

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In lieu of
filing {entity}
certifies that
the information
maybe
obtained below
and is accurate
as of the
publication
date:
□

Jkt 265001

PO 00000

Name of
Publication:
Name
Address

In lieu of
filing
{entity}
certifies that
the
information
requested
under this
exhibit is
kept up to
date and is
available to
the
Commission
and the
□

□

In lieu of filing {entity}
certifies that the information
requested under this exhibit
is continuously available at
the internet website below,
which is controlled by
{entity}, and the information
is accurate as of the date of
this filing and is free and
accessible (without any
encumbrances or
restrictions) by the general
public
URL(s):

Telephone#

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Exhibit N:

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

description of the
security;
3. The unregistered
securities admitted to
trading on the
exchange which are
exempt from
registration under
Section 12(a) of the
Act. For each
security listed,
provide the name of
the issuer and a
description of the
security, and the
statutory exemption
claimed ~Rule
12a-6); and
4. Other securities
traded on the
exchange, including
for each the name of
the issuer and a
description of the
security.

Section VI—Contact Employee Information
Provide the following information of the
person at {entity name} prepared to respond
to questions for this submission:
First name:
Last name:
Title:
Email:
Telephone:

ddrumheller on DSK120RN23PROD with RULES2

Section VII—Consent to Service and
Attestation
b By checking this box, {Name of Entity}
consents that service of any civil action
brought by, or notice of any proceeding
before, the Securities and Exchange
Commission in connection with the
exchange’s activities may be given to the
contact employee by registered or certified
mail at the main address, or mailing address
if different, given in Section I above; and
represents that the information and
statements contained herein, including
exhibits, schedules, or other documents
attached hereto, and other information filed

VerDate Sep<11>2014

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Jkt 265001

public upon
request.

Date of
Publication:
mm/dd/yyyy

herewith, all of which are made a part hereof,
are current, true, and complete.
Form 1 General Instructions
A. Use of the Form
Form 1 is the form used by: (a) an
applicant for registration as a national
securities exchange under Section 6 of the
Securities Exchange Act of 1934 (‘‘Exchange
Act’’) or for an exemption from registration
pursuant to Section 5 of the Exchange Act by
reason of the limited volume of transactions
effected on such exchange (‘‘applicant’’) to
provide to the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
specific items of information about the
applicant and its operations, or to amend
such application, as required under Rule 6a–
1; and (b) a national securities exchange
(‘‘registered exchange’’) or an exchange
exempted from such registration by reason of
the limited volume of transactions effected
on such exchange (‘‘exempt exchange’’) uses
to provide the information required by Rule
6a–2 and Rule 6a–3.

PO 00000

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Filings on Form 1 submitted pursuant to
Rule 6a–1, Rule 6a–2 or Rule 6a–3 of the
Exchange Act shall be filed in an electronic
format on the Commission’s Electronic Data
Gathering, Analysis, and Retrieval system
(EDGAR) in accordance with EDGAR rules
set forth in Regulation S–T (17 CFR part 232).
All pages of an electronically filed Form 1,
including exhibits, shall be numbered
consecutively, consistent with Rule 0–3
under the Exchange Act (17 CFR 240.0–3).
For assistance with EDGAR issues, please
consult the EDGAR—Information for Filers
web page on SEC.gov.
The disclosure required to be included in
the following exhibits to Form 1 must be
provided as an Interactive Data File in
accordance with Rule 405 of Regulation S–
T. This requirement does not extend to
copies of existing documents:
(1) Exhibit D;
(2) Exhibit E, except for the copy of the
users’ manual; and
(3) Exhibit I.

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ER21JA25.048

BILLING CODE 8011–C

Price of
Publication
$

7387

7388

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

ddrumheller on DSK120RN23PROD with RULES2

B. Need for Careful Preparation of the
Completed Form, Including Exhibits
Applicants and registered and exempt
exchanges must provide all the information
required by the form, including the exhibits,
and must present the information in a clear
and comprehensible manner. A filing that is
incomplete or similarly deficient may be
returned to the applicant or registered or
exempt exchange. Any filing so returned
shall for all purposes be deemed not to have
been filed with the Commission. See also
Rule 0–3 under the Exchange Act (17 CFR
240.0–3). If any exhibit required is
inapplicable, a statement to that effect shall
be furnished in lieu of such exhibit.
C. When To Use the Form 1
Form 1 is composed of 6 types of
submissions to the Commission pursuant to
Rules 6a–1, 6a–2 and 6a–3 under the
Exchange Act. In completing Form 1, an
applicant or exchange shall select the type of
filing and provide all information required by
the relevant rules. The types of submissions
are:
(1) ‘‘Rule 6a–1 Application’’ submissions
are applications for registration as a national
securities exchange or for exemption from
such registration based on limited volume.
The applicant must select the type of
application during the initial filing. An
exchange that is filing Form 1 as an
application may not satisfy the requirements
to provide certain information by means of
an internet website. All materials must be
filed with the Commission as part of the
Form 1 application. Amendments to
applications as required by Rules 6a–1(b), (c)
or (d) must be filed as amending the Rule 6a–
1 application type, and marked to number
the amendments consecutively. An applicant
may withdraw a Rule 6a–1 application
submission type prior to Commission action
to issue any order granting registration, or
institute proceedings to determine whether
registration should be denied.
(2) ‘‘Rule 6a–2(a) Amendment to
Registration’’ submissions are for
amendments to the Form 1 by registered
exchanges and exempt exchanges. The
amendments shall set forth the nature and
effective date of the action taken and shall
provide any new information and correct any
information rendered inaccurate within 10
days after any action that is taken renders
inaccurate, or that causes to be incomplete,
any of the following:
(i) Information in Section I-Entity Contact
Information, or any amendments thereto; or
(ii) Information filed as part of Exhibits C,
F, G, H, J, K or M, or any amendments
thereto.
(3) ‘‘Rule 6a–2(b) Annual Filing’’
submission shall be filed on or before June
30 of each year and include the following:
(i) Exhibits D and I as of the end of the
latest fiscal year of the exchange; and
(ii) Exhibits K, M, and N, which shall be
up to date as of the latest date practicable
within three (3) months of the date the
amendment is filed.
(4) ‘‘Rule 6a–2(c) Triennial Filing’’
submission shall be filed on or before June
30, 2025, and every three years thereafter and
shall include complete Exhibits A, B, C and

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J. The information filed under this
submission type shall, at a minimum, be up
to date within three (3) months as of the date
the amendment is filed.
(5) ‘‘Rule 6a–3(a) Supplemental Material’’
submission shall be filed with the
Commission within 10 days after issuing or
making any materials (including notices,
circulars, bulletins, lists and periodicals)
issued or made generally available to
members of, or participants or subscribers to,
the exchange.
(6) ‘‘Rule 6a–3(b) Report of securities sold’’
submission type shall be filed within 15 days
after the end of each calendar month and
shall include a report concerning the
securities sold on such exchange during the
calendar month. The report shall set forth:
(i) The number of shares of stock sold and
the aggregate dollar amount of such stock
sold;
(ii) The principal amount of bonds sold
and the aggregate dollar amount of such
bonds sold; and
(iii) The number of rights and warrants
sold and the aggregate dollar amount of such
rights and warrants sold.
D. Documents Composing the Completed
Form
The completed form filed with the
Commission shall consist of Form 1,
responses to all applicable items, and any
exhibits required in connection with the
filing.
E. Contact Information and Filing of
Completed Form
Each time an applicant or exchange
submits a filing to the Commission on Form
1, the applicant or exchange must provide
the contact information required by Section
II of Form 1. The contact employee must be
authorized to receive all contact information,
communications and mailings and must be
responsible for disseminating that
information within the applicant or
exchange’s organization.
For assistance with EDGAR issues, please
consult the EDGAR—Information for Filers
web page on SEC.gov.
F. Recordkeeping
A copy of this Form 1 must be retained by
the exchange and made available for
inspection upon request of the SEC.
G. Paperwork Reduction Act Disclosure
Form 1 requires an applicant seeking to
register as a national securities exchange or
seeking an exemption from registration as a
national securities exchange pursuant to
Section 5 of the Exchange Act to provide the
SEC with certain information regarding the
operation of the exchange. Form 1 also
requires national securities exchanges or
exchanges exempt from registration based on
limited volume to update certain information
on a periodic basis and to provide
supplemental material as required.
An agency may not conduct or sponsor,
and a person is not required to respond to,
a collection of information unless it displays
a currently valid control number. Sections
3(a)(1), 5, 6(a) and 23(a) authorize the
Commission to collect information on this

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Form 1 from exchanges. See 15 U.S.C.
78c(a)(1), 78e, 78f(a) and 78w(a).
Any member of the public may direct to
the Commission any comments concerning
the accuracy of the burden estimate on the
facing page of Form 1 and any suggestions for
reducing this burden.
Form 1 is designed to enable the
Commission to determine whether an
exchange applying for registration is in
compliance with the provisions of Sections 6
and 19 of the Exchange Act. Form 1 is also
designed to enable the Commission to
determine whether a national securities
exchange or exchange exempt from
registration based on limited volume is
operating in compliance with the Exchange
Act.
It is estimated that an exchange will spend
approximately 901 hours completing the
initial application on Form 1 pursuant to
Rule 6a–1. It is also estimated that each
exchange will spend approximately 26 hours
to prepare each periodic amendment to Form
1 pursuant to Rules 6a–2(a) and 6a–2(c), and
approximately 40 hours to prepare each
annual amendment to Form 1 pursuant to
Rule 6a–2(b). It is also estimated that each
exchange will spend approximately 0.5 hours
to prepare each submission pursuant to Rule
6a–3.
It is mandatory that an exchange seeking to
operate as a national securities exchange or
as an exchange exempt from registration
based on limited volume file Form 1 with the
Commission. It is also mandatory that
national securities exchanges or exchanges
exempt from registration based on limited
volume file amendments to Form 1 under
Rule 6a–2. It is further mandatory that
national securities exchanges or exchanges
exempt from registration based on limited
volume file supplemental information and
monthly reports under Rule 6a–3.
No assurance of confidentiality is given by
the Commission with respect to the
responses made in Form 1. The public has
access to the information contained in Form
1.
This collection of information has been
reviewed by the Office of Management and
Budget (‘‘OMB’’) in accordance with the
clearance requirements of 44 U.S.C. 3507.
The Commission has determined that the
information collection does not constitute a
system of record for purposes of the Privacy
Act.
H. Explanation of Terms
Affiliate—Any person that, directly or
indirectly, controls, is under common control
with, or is controlled by, the national
securities exchange or exchange exempt from
registration based on the limited volume of
transactions effected on such exchange,
including any employees.
Control—The power, directly or indirectly,
to direct the management or policies of a
company, whether through ownership of
securities, by contract, or otherwise. Any
person that (i) is a director, general partner
or officer exercising executive responsibility
(or having similar status or functions); (ii)
directly or indirectly has the right to vote
25% or more of a class of voting securities
or has the power to sell or direct the sale of

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25% or more of a class of voting securities;
or (iii) in the case of a partnership, has the
right to receive, upon dissolution, or has
contributed, 25% or more of the capital, is
presumed to control that entity.
Direct Owners—Any person that owns,
beneficially owns, has the right to vote, or
has the power to sell or direct the sale of, 5%
or more of a class of a voting security of the
applicant. For purposes of this Form 1, a
person beneficially owns any securities (i)

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owned by his/her child, stepchild,
grandchild, parent, stepparent, grandparent,
spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law,
sister-in-law, sharing the same residence; or
(ii) that he/she has the right to acquire,
within 60 days, through the exercise of any
option, warrant or right to purchase the
security.
Member—Shall have the same meaning as
under Exchange Act Section 3(a)(3).

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7389

National Securities Exchange—Shall mean
any exchange registered pursuant to Section
6 of the Exchange Act.
Person Associated With a Member—Shall
have the same meaning as under Section
3(a)(21) of the Exchange Act.
Appendix 2—Form 1–N
BILLING CODE 8011–P

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7390

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
Securities and Exchange Commission
Washington, DC 20549
Form 1-N Form and Amendments for Notice of Registration as a National Securities Exchange for the Sole Purpose
of Trading Security Futures Products Pursuant to Section 6(g) of the Exchange Act
WARNING: Failure to keep this form current and to file accurate supplementary information on a timely basis, or
the failure to keep accurate books and records or otherwise comply with the provisions of law applying to the
conduct of the exchange would violate the Federal securities laws and may result in disciplinary, administrative, or
criminal action.
INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACTS MAY CONSTITUTE CRIMINAL
VIOLATIONS.
{Name of exchange} is making this filing pursuant to the following Rule: (select one)
□
Rule 6a-4 Initial Notice of Registration
□
Rule 6a-4(b) Amendment to Notice of Registration
□
Rule 6a-4(b )(3) Annual Filing for Year
□
Rule 6a-4(b )(4) Triennial Filing for Year: YYYY
□
Rule 6a-4(c)(l) Supplemental Materials
□
Rule 6a-4(c)(2) Report of securities futures products traded during prior calendar month
Section I- Security Futures Product Exchange's Contact Information
□
Check Box ifthere is a change in information previously filed.
1. Primary Street Address (Do not use a P.O. Box)
Street: - - - - - - - - - - - - - - City_ _ _ _ _ _ _ _ _ _, State_ _ _ Zip Code_ _ _ __
2. Mailing Address:
□ Same as above
Street: - - - - - - - - - - - City_ _ _ _ _ _ _ _ _ _, State_ _ _ Zip Code_ _ _ __
3.
4.
5.
6.

Business Telephone ( ) __-_ __
Facsimile (if any) ( ) _ -_ __
Fiscal Year End: mm/dd
Legal Status (select one)
□
Sole Proprietorship
□
Corporation
□
Partnership
D Limited Liability Company
□
Other (Specify): _ _ _ _ _ _ _ _ __
If other than a sole proprietor, please provide the following:
a) Date exchange obtained legal status (§.k date of Incorporation):
mm/dd/yyyy
b) State/Country of formation: {pick list}
c) Statute under which exchange was organized _ _ _ _ _ _ _ _ __
Name and address of Counsel for {Name of Exchange}

Name of Firm:
First Name:
Title:
Street:
City:
Email:

Last Name:

State

Zip Code

Section III- Rule 6a-4(c)(l) (select one)

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Section II:

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
□

□

7391

Provide all supplemental materials required under Rule 6a-4(c) related to the trading of security futures
products (including notices, circulars, bulletins, lists and periodicals) issued or made generally available to
members of, or participants or subscribers to, the exchange. Such material shall be filed within l Odays
after issuing or making such material available to members, participants or subscribers.
In lieu of filing the supplemental material required under Rule 6a-4( c)(l )(i) the {entity} certifies that the
information requested is available continuously at the internet website indicated below and is free and
accessible (without any encumbrances or restrictions) by the general public, and further certifies that the
site is controlled by the exchange and the information is accurate as of the date of this filing. Please enter
URL(s) below: _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

Section IV - Rule 6a-4(c)
Within 15 days after the end of each calendar month, file a report concerning the security futures products traded on
the exchange during the previous calendar month. Such report shall contain:
( 1) For each contract of sale for future delivery of a single security, the number of contracts traded on such
exchange during the relevant calendar month and the total number of shares underlying such contracts
traded;and
(2) For each contract of sale for future delivery of a narrow-based security index, the number of contracts
traded on such exchange during the relevant calendar month and the total number of shares represented
by the index underlying such contracts traded.
Report of security futures products traded during calendar month ended mm/dd/yyyy
Section V: Exhibits

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□
In lieu of
filing {entity}
certifies that the
information may
be obtained
below and is
accurate as of
the publication
date:
Name of
Publication:
Name
Address
Telephone#
Price of
Publication
$_
Date of
Publication:
mm/dd/yyyy

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□
In lieu of
filing {entity}
certifies that
the
information
requested
under this
exhibit is kept
up to date and
is available to
the
Commission
and the public
upon request.

Sfmt 4725

□ In lieu of
filing {entity}
certifies that
the
information
requested
under this
exhibit is
continuously
available at
the internet
website
below, which
is controlled
by {entity},
and is
accurate as of
the date of
this filing and
is free and
accessible
(without any
encumbrances
or
restrictions)
by the general
public
URL s:

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Exhibit A:
As of the latest date practicable
within one (1) month of the date
Form 1-N is filed, a copy of the
constitution, articles of
incorporation or association with
all subsequent amendments, and
existing bylaws or corresponding
rules or instruments, whatever the
name, of the filing exchange.

VerDate Sep<11>2014

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Exhibit B:
As of the latest date practicable
within one (1) month of the date
Form 1-N is filed, a copy of all
written rulings, settled practices
having the effect of rules, and
interpretations of the Governing
Board or other committee of the
exchange in respect of any
provisions of the constitution,
bylaws, rules, or trading practices
of the filing exchange which are not
included in Exhibit A.

□
In lieu of
filing {entity}
certifies that the
information may
be obtained
below and is
accurate as of
the publication
date:
Name of
Publication:
Name
Address
Telephone#
Price of
Publication
$Date of
Publication:
mm/dd/yyyy

□
In lieu of
filing {entity}
certifies that
the
information
requested
under this
exhibit is kept
up to date and
is available to
the
Commission
and the public
upon request.

Exhibit C:
As of the latest date practicable
within one (1) month of the date
Form 1-N is filed, for each
subsidiary or affiliate of the filing
exchange that will be involved in
the trading of security futures
products, and for any entity with
whom the exchange has a
contractual or other agreement
relating to the operation of an
electronic trading system to be used
to effect transactions in security
futures products on the exchange
("System"), provide the following
information:
1. Name and address of
organization.
2. Form of organization
(£.g,_, association,
corporation, partnership,
etc.).
3. Name of state and statute
citation under which
organized. Date of
incorporation in present
form.

□
In lieu of
filing {entity}
certifies that the
information may
be obtained
below and is
accurate as of
the publication
date:
Name of
Publication:
Name
Address
Telephone#
Price of
Publication
$
Date of
Publication:
mm/dd/yyyy

□
In lieu of
filing {entity}
certifies that
the
information
requested
under this
exhibit is kept
up to date and
is available to
the
Commission
and the public
upon request.

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□ In lieu of
filing {entity}
certifies that
the
information
requested
under this
exhibit is
available at
the internet
website
below and is
accurate as of
the date of
this filing and
is free and
accessible
(without any
encumbrances
or
restrictions)
by the general
public
URL(s:
□ In lieu of
filing {entity}
certifies that
the
information
requested
under this
exhibit is
available at
the internet
website
below and is
accurate as of
the date of
this filing and
is free and
accessible
(without any
encumbrances
or
restrictions)
by the general
public
URL(s):

21JAR2

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7392

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

7393

4.

Brief description of nature
and extent of affiliation.
5. Brief description of
business or functions.
Description should
include responsibilities
with respect to operation
of the System and/or
execution, reporting,
clearance (including the
controls that will be
implemented to ensure the
safety of held funds or
securities), or settlement
of transactions in
connection with operation
of the System.
6. A copy of the constitution.
7. A copy of the articles of
incorporation or
association including all
amendments.
8. A copy of existing bylaws
or corresponding rules or
instruments.
9. The name and title of the
present officers,
governors, members of all
standing committees, or
persons performing
similar functions.
10. An indication of whether
such business or
organization ceased to be
associated with the
Security Futures Product
Exchange during the
previous year, and a brief
statement of the reasons
for termination of the
association.
Not Applicable.

Not
Applicable

Not
Applicable

Describe the manner of operation
of the System involving trading of
security futures products. The
description should include the
following:
1. The means of access to the
S stem.

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ExhibitD:

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

2.

3.

4.
5.

6.

ddrumheller on DSK120RN23PROD with RULES2

7.

VerDate Sep<11>2014

Procedures governing
entry and display of
quotations and orders in
the System.
Procedures governing the
execution, reporting,
clearance, and settlement
of transactions in
connection with the
System.
Proposed fees.
Procedures for ensuring
compliance with System
usage guidelines.
The hours of operation of
the System, and the date
of which the exchange
intends to commence
operation of the System.
Attach a copy of the users'
manual.

Exhibit E:
A list of the officers, governors, or
persons performing similar
functions, who presently hold or
have held their offices or positions
during the previous year,
indicating the following for each:
1. Name.
2. Title.
3. Dates of commencement and
termination of term of office or
position.
4. Type of business in which each
is primarily engaged.

□ In lieu of
filing {entity}
certifies that the
information may
be obtained
below and is
accurate as of
the publication
date:
Name of
Publication:
Name
Address
Telephone#
Price of
Publication
$_
Date of
Publication:
mm/dd/yyyy

□
In lieu of
filing {entity}
certifies that
the
information
requested
under this
exhibit is kept
up to date and
is available to
the
Commission
and the public
upon request.

Exhibit F:
This Exhibit is applicable only to
filing exchanges that have one or
more owners, shareholders,
partners that are also not members
of the exchange and should be

□ In lieu of
filing {entity}
certifies that the
information may
be obtained
below and is

□
In lieu of
filing {entity}
certifies that
the
information
re uested

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□ In lieu of
filing {entity}
certifies that
the
information
requested
under this
exhibit is
available at
the internet
website
below and is
accurate as of
the date of
this filing and
is free and
accessible
(without any
encumbrances
or
restrictions)
by the general
public
URL s:
□ In lieu of
filing {entity}
certifies that
the
information
re uested

21JAR2

ER21JA25.053

7394

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

current as of the latest date
practicable within one month of the
date Form 1-N is filed. If the
exchange is a corporation, please
provide a list of each shareholder
that directly owns 5% or more of a
class of a voting security of the
Security Futures Product
Exchange. If the exchange is a
partnership, please provide a list of
all general partners and those
limited and special partners that
have the right to receive upon
dissolution, or have contributed,
5% or more of the partnership's
capital. For each person listed in
the Exhibit F, please provide the
following:
1. Full legal name.
2. Title of Status.
3. Date of title or status acquired.
4. Approximate ownership
interest.
5. Whether the person has control,
a term that is defined in the
instructions to this Form.

accurate as of
the publication
date:
Name of
Publication:
Name
Address
Telephone#
Price of
Publication
$_
Date of
Publication:
mm/dd/yyyy

under this
exhibit is kept
up to date and
is available to
the
Commission
and the public
upon request.

under this
exhibit is
available at
the internet
website
below and is
accurate as of
the date of
this filing and
is free and
accessible
(without any
encumbrances
or
restrictions)
by the general
public
URL(s):

□
In lieu of
filing {entity}
certifies that the
information may
be obtained
below and is
accurate as of

□
In lieu of
filing {entity}
certifies that
the
information
requested
under this

□ In lieu of
filing {entity}
certifies that
the
information
requested
under this

7395

ExhibitH:
As of the latest date practicable
within 1 month of the date Form 1N is filed, provide an alphabetical
list of all mem hers, participants,
subscribers, or other users,

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Exhibit G:
To the extent not covered in an
exchange's rules submitted under
Exhibit A, describe the Security
Futures Product Exchange's
criteria for membership. Describe
conditions under which members
may be subject to suspension or
termination for infractions relating
to the trading of security futures
products. Describe any procedures
that will be involved in the
suspension or termination of a
member for such infractions.

VerDate Sep<11>2014

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

including the following
information:
I. Name
2. If a member, participant,
subscriber, or other user is
an individual, the name of
the entity with which such
individual is associated
and the relationship of
such individual to the
entity ~ ' partner,
officer, director, employee,
etc.).
3. Brief description of the
type of activities primarily
engaged in by the member,
participant, subscriber, or
other user. A person shall
be "primarily engaged" in
an activity or function for
purposes of this item when
that activity or function is
the one in which that
person is engaged for the
majority of their time.
When more than one type
of person at an entity
engages in activities or
functions, identify each
type and state the number
of members, participants,
subscribers, or other users
in each.
4. The class of membership,
participation, subscription,
or other access.

the publication
date:
Name of
Publication:
Name
Address
Telephone#
Price of
Publication
$Date of
Publication:
mm/dd/yyyy

exhibit is kept
up to date and
is available to
the
Commission
and the public
upon request.

exhibit is
available at
the internet
website
below and is
accurate as of
the date of
this filing and
is free and
accessible
(without any
encumbrances
or
restrictions)
by the general
public
URL(s):

Exhibit I:
Provide a schedule of the security
futures products proposed to be
listed by the filing exchange, or for
amendments to the Form 1-N the
security futures products listed by
the exchange, indicating for each
the name of the issuer and a
description of the security.

□
In lieu of
filing {entity}
certifies that the
information may
be obtained
below and is
accurate as of
the publication
date:
Name of
Publication:
Name
Address
Telephone#

□
In lieu of
filing {entity}
certifies that
the
information
requested
under this
exhibit is kept
up to date and
is available to
the
Commission
and the public
upon request.

□ In lieu of
filing {entity}
certifies that
the
information
requested
under this
exhibit is
available at
the internet
website
below and is
accurate as of
the date of
this filin and

20:42 Jan 18, 2025

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7396

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

is free and
accessible
(without any
encumbrances
or
restrictions)
by the general
public
URL s:

Price of
Publication
$_
Date of
Publication:
mm/dd/yyyy

Section VI:

7397

Contact Employee Information

The individual listed herein as the Contact Employee for {name of exchange} must be authorized to receive all
contact information, communications, and mailings and is responsible for disseminating such information within the
Security Futures Product Exchange's organization.
First Name:
Last Name:
Title:
Email:
Telephone:

Section VII: Consent to Service and Attestation
■ By checking this box, {Name of Entity} consents that service of any civil action brought by, or notice of any
proceeding before, the Securities and Exchange Commission in connection with the exchange's activities may be
given by registered or certified mail to the contact employee at the main address, or mailing address if different,
given in Section I above; and represents that the information and statements contained herein, including exhibits,
schedules, or other documents attached hereto, and other information filed herewith, all of which are made a part
hereof, are current, true, and complete.
Form 1-N General Instructions:
A. Use of the Form
Form 1-N is the form used for: (a) notice ofregistration as a national securities exchange for the sole purpose of
trading security futures products ("Security Futures Product Exchange") under Section 6(g) of the Securities
Exchange Act of 1934 ("Exchange Act") to provide to the Securities and Exchange Commission ("SEC" or
"Commission") specific items of information about the Security Futures Product Exchange and its operations; (b)
the filing of annual and triennial updates to the information required by Form 1-N following notice ofregistration;
and (c) supplemental material and reports of security futures products traded. Filings on Form 1-N submitted
pursuant to Rule 6a-4 of the Exchange Act (17 CFR 240.6a-4) shall be filed in an electronic format on the
Commission's Electronic Data Gathering, Analysis, and Retrieval System (EDGAR) in accordance with EDGAR
rules set forth in Regulation S-T (17 CFR Part 232). For assistance with EDGAR issues, please consult the
EDGAR-Information for Filers web page on SEC.gov. All pages ofan electronically filed Form 1-N, including
exhibits, shall be numbered consecutively, consistent with Rule 0-3 under the Exchange Act (17 CFR 240.0-3).

Security Futures Product Exchanges must provide all the information required by the form, including the exhibits,
and must present the information in a clear and comprehensible manner. A filing that is incomplete or similarly
deficient may be returned to the Security Futures Product Exchange. Any filing so returned shall for all purposes be
deemed not to have been filed with the Commission. See also Rule 0-3 under the Exchange Act (17 CFR 240.0-3).
If any exhibit required is inapplicable, a statement to that effect shall be furnished in lieu of such exhibit. The first

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B. Need for Careful Preparation of the Completed Form, Including Exhibits

7398

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
filing on Form 1-N that a Security Futures Product Exchange submits through EDGAR must contain all items
required by Section I.
C. When to Use the Form 1-N
Form 1-N is composed of 6 types of submissions to the Commission pursuant to Rule 6a-4 under the Exchange Act.
In completing Form 1-N, a Security Futures Product Exchange shall select the type of filing and provide all
information required by the relevant rules. The types of submissions are:

(1) "Rule 6a-4 Initial Notice of Registration" submissions for notice of registration as a Security Futures
Product Exchange. An exchange that is filing Form 1-N may not satisfy the requirements to provide
certain information by means of an internet website. All materials must be filed with the Commission as
part of the Form 1-N notice of registration.
(2) "Rule 6a-4(b) Amendment to Notice of Registration" submissions for amendments to the Form 1-N, which
shall set forth the nature and effective date of the action taken and shall provide any new information and
correct any information rendered inaccurate within:
i) 10 days after any action that is taken renders inaccurate, or that causes to be incomplete, any
information in Sections I through IV, or any amendments thereto; or
ii) 30 days after any action is taken that renders inaccurate, or that causes to be incomplete, any
information filed as part of Exhibit F to Form 1-N, or any amendments thereto.
(3) "Rule 6a-4(b )(3) Annual Filing" submission, which shall be filed by June 30 of each year and include
Exhibits F, H, and I, which shall be current as of the latest date practicable within 3 months of the date the
amendment is filed.
(4) "Rule 6a-4(b)(4) Triennial Filing" submission, which shall be filed by June 30, 2025, and by June 30 every
three years thereafter, and shall include complete Exhibits A, B, C, and E. The information filed under this
submission type shall be current as of the latest practicable date, but shall at a minimum, be up to date
within 3 months as of the date the amendment is filed.
(5) "Rule 6a-4(c)(1) Supplemental Material" submission type, for submission of supplemental material within
10 days after issuing or making such material available to members, participants, or subscribers.
(6) "Rule 6a-4(c)(2) Report of security futures products traded" submission type shall be filed within 15 days
after the end of each calendar month. Such report shall contain: (i) For each contract of sale for future
delivery of a single security, the number of contracts traded on such exchange during the relevant calendar
month and the total number of share underlying such contracts traded; and (ii) For each contract of sale for
future delivery of a narrow-based security index, the number of contracts traded on such exchange during
the relevant calendar month and the total number of shares represented by the index underlying such
contracts traded.
D. Documents Composing the Completed Form
The completed form filed with the Commission shall consist of Form 1-N, responses to all applicable items, and any
exhibits required in connection with the filing.
E. Contact Information and Filing of Completed Form
Each time a Security Futures Product Exchange submits a filing to the Commission on Form 1-N, the Security
Futures Product Exchange must provide the contact information required by Section II of Form 1-N. The contact
employee must be authorized to receive all contact information, communications and mailings and must be
responsible for disseminating that information within the Security Futures Product Exchange.

F. Recordkeeping
A copy of this Form 1-N, as well as the forms filed with the SEC, must be retained by the Security Futures Product
Exchange and made available for inspection upon request of the SEC.

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For assistance with EDGAR issues, please consult the EDGAR-Information for Filers web page on SEC.gov.

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

7399

G. Paperwork Reduction Act Disclosure
Form 1-N requires an exchange seeking to register as a national securities exchange for the sole purpose of trading
security futures products, pursuant to Section 6(g) of the Exchange Act, to provide the Commission with certain
information regarding its operation. If documents containing information satisfying the Commission's information
requirements have been filed with the Commodity Futures Trading Commission, copies of such documents may be
filed with the Commission. Form 1-N also requires Security Futures Product Exchanges to update certain
information on a periodic basis.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless
it displays a currently valid control number. Sections 3(a)(l), 5, 6(a) and 23(a) authorize the Commission to collect
information on this Form 1-N from Security Futures Product Exchanges. See 15 U.S.C. 78c(a)(l), 78e, 78f(a) and
78w(a).
Form 1-N is designed to enable the Commission to determine whether a Security Futures Product Exchange is in
compliance with the Exchange Act.
It is estimated that a Security Futures Product Exchange will spend approximately 29 hours completing the initial
application on Form 1-N pursuant to Rule 6a-4. It is estimated that each Security Futures Product Exchange will
spend approximately 14 hours annually to prepare periodic amendments, 14 hours annually to prepare annual
amendments, 7 hours annually to prepare triennial amendments to Form 1-N and 6 hours annually for the required
supplemental information and monthly reports pursuant to Rule 6a-4.
Any member of the public may direct to the Commission any comments concerning the accuracy of this burden
estimate and any suggestions for reducing this burden.
It is mandatory that an exchange seeking to operate as a national securities exchange for the sole purpose of trading
security futures products file a Form 1-N with the Commission. It is also mandatory that Security Futures Product
Exchanges file amendments to Form 1-N under Rule 6a-4.
No assurance of confidentiality is given by the Commission with respect to the responses made in Form 1-N. The
public has access to the information contained in Form 1-N.
This collection of information has been reviewed by the Office of Management and Budget ("OMB") in accordance
with the clearance requirements of 44 U.S.C. 3507. The Commission has determined that the information collection
does not constitute a system ofrecord for purposes of the Privacy Act.
H. Explanation of Terms
AFFILIATE - Any person that, directly or indirectly, controls, is under common control with, or is controlled by, the
national securities exchange or exchange exempt from registration based on the limited volume of transactions
effected on such exchange, including any employees.
CONTROL - The power, directly or indirectly, to direct the management or policies of a company, whether through
ownership of securities, by contract, or otherwise. Any person that (i) is a director, general partner or officer
exercising executive responsibility (or having similar status or functions); (ii) directly or indirectly has the right to
vote 25% or more of a class of voting securities or has the power to sell or direct the sale of 25% or more of a class
of voting securities; or (iii) in the case of a partnership, has the right to receive, upon dissolution, or has contributed,
25% or more of the capital, is presumed to control that entity.

MEMBER - Shall have the same meaning as under Exchange Act Section 3(a)(3).
PERSON ASSOCIATED WITH A MEMBER- Shall have the same meaning as under Section 3(a)(21) of the
Exchange Act.
BILLING CODE 8011–C

Appendix 3—Form X–17A–5
BILLING CODE 8011–P

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DIRECT OWNERS - Any person that owns, beneficially owns, has the right to vote, or has the power to sell or
direct the sale of, 5% or more of a class of a voting security of the Security Futures Product Exchange. For purposes
of this Form 1-N, a person beneficially owns any securities (i) owned by his/her child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
sister-in-law, sharing the same residence; or (ii) that he/she has the right to acquire, within 60 days, through the
exercise of any option, warrant or right to purchase the security.

7400

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

*****
FOCUS
Report
Part II

COMPUTATION OF MINIMUM REGULATORY CAPITAL REQUIREMENTS
Items on this page to be reported by a:

stand-Alone Broker-Dealer
Broker-Dealer SBSD (other lhan OTC Derivatives Dealer)
Broker-Dealer MSBSP

Calculation of Excess Tentative Net Capital (If Applicable)
1. Tentative net capital .......................................................................................................................................................................................... $ _ _ _ _ _ _ _ _ ~
2. Minimum lenlali\le net capilal requirement........................................................................................................................................................ $

~

3. Excess tentative net capital (difference between Lines 1 and 2). ........................................... ...... ............ ...... ..... .............................................. $

~

4. Tenlalive net capital in exce5S of 120% of minimum lenlati11e net capital requirement reported on Line 2 ....................................................... $

~

Calculation of ,..mum Net Capital Requirement

5. Ratio minimum net capital raquiiemenl
A. &lo% of lolal aggregate indebledness (line Item 3840) ............................................................................................................................ $ _ _ _ _ _ _ _ _ ~
B. 2'll, of aggregate debit items as shown in the Formula for Reserve Requirements pursuant lo Rule 15c3-3 .............................................. $

~

C. Permitageof risk marginamountro~uted under 17CfR240.15c3-1(a)(7)(i)or(a)(10), if applicable ................................................... $

~

0. Minirrwm ratio net capital raquiremenl (lLine 5A or 5B, as appliable) plus Line 5C) .................... ...... ...... ................................................... $

~

6. Filled-dollar minimum net capital raquiiemenl. ........... ...... ...... ........... ........................................... ...... ...... ...... ........... ..................................... ... $

~

7. for broker-dealers engaged in reverse repurchase agieemenls, 10% ollhe OOlOOnls in 17 CFR 240.15c3-1(a)(9)(i)-{iij .............................. S

~

8. Minimum net capital requirement (line 7 plus gieater of Line 50 and Line 6) ............................. ...... ...... ...... ........... ........................................ $

~

9. Excess net capital (Item 3750 llinus Hem 3760).. ...... ...... ...... .................................................................. ...... ................................................... $

~

10. Net capital and tenlaliw net capital in relalion lo early warning lhresholds
A. Net capilal in eia:ess of 120% of minimum nel capital requinmienl reported on Line 8................................................................................ $ _ _ _ _ _ _ _ _ 1120611
B. Net capilal in eia:ess of 5% of combined aggregate debit items as shown in lhe f01111ula for Reseive Requirements
pursuant to Rule 15c3-3 ............................................................................................................................................................................... $ _ _ _ _ _ _ _ _ ~
Computation of Aggregate Indebtedness (If Applicable)

11. Total aggregate indebtedness liabilities from Slalemenloffinancial Con(ifion Qtem 1230) ........................................................................ $ _ _ _ _ _ _ _ _ ~

12 Ali!:
A. Orallsforimmedialecredit ........................................................................................................ $ _ _ _ _ _ _ _ _ ~
B. Markel value of securities borrowed for which no equivalent value is paid or credited ............. $ _ _ _ _ _ _ _ _ ~

C. Olher uniecorded amounts (list) ............................................................................................... $

~

13. Oeducl:Adjustmentbased on deposits in Special Resenie BankAcoounts (see Rule 15c3-1{c)(1)(\lii)) ........................................................ $ _ _ _ _ _ _ _ _ ~
14. Tolal aggregate indebtedness (sum of lme Items 3790 and 3830) .............. ...... .............................. ................. ....... ...... ................. ................ $

~

15. Percentage of aggregate indebtedness lo nel capital (Hem 3840 divided by Item 3750) ................................................................................. %

~

16. Percentage of aggregate indebtedness to nel capital Biler anticipated capital will,ctawals (llem 3840 divided by Item 3750
less Item 4880) ................................................................................................................................................................................................. % ' - - - - - - - - - ~
Calculation of other Ratios

17. Percentage of nel capital lo aggregate debits Qtem 3750 divided by Item 4470) ............................................................................................ %_ _ _ _ _ _ _ _ ~
18. Percentage of nel capital, !il!eranticipaled capilal withdrawals, to aggregate debils (llem 3750 less Item 4880,
divided by llem4470} ....................................................................................................................................................................................... $ _ _ _ _ _ _ _ _ ~

19. Percentage of debt lo debt--lo-equily lolal, computed in accordance with Rule 15c3-1{d) ............................................................................... %

~

*****

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20. Options deductions/net capital ratio (1000% test) lolal deductions exclusive of fiquideling equity under Rule 15c3-1 (a}(G)
and (c)(2)(x) divided by net capital ................................................................................................................................................................... $ _ _ _ _ _ _ _ _ ~

7401

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
REVENUE
1. Comrri8sions
.......... $ _ _ _ _ ~

A. Commissions on lransaclions in fisted equity securities executed on an excharge ..
8- Commissions on transactions in exchange listed equity 5ecuritie3 executed over-lhe-counler ...

.................. $

~

. .......... $

~

C. Commissions on listed option 1ransaclions.......

································ $ - - - - - - ~

D. All olher 5ecuritie3 oorrmissions..........................................................

E Total securitiescommissions(sumoflines 1A-1D) ............................................................................................................................................... $

1128411

F. Commissions on commodity lransoclions........................................

~

.........................

.....................

······-·· $

..... $ _ _ _ _ 11284~

G. All olher oorrmis5ions .............................................................
H. Total oommissions(sumoflines 1E, 1F. and 1G) ...........

.............. $

~

*****
FOCUS
Report
Part II

COMPUTATION FOR DETERMINATION OF CUSTOMER RESERVE REQUIREMENTS
Items on this page lo be reported by a:

Stand-Alone Broker-Dealer
Broker-Dealer SBSD
Broker-Dealer MSBSP

CREDIT BALANCES
1. Free credit balances and other credtt balances in customers' security accounts (see
NoleA) ................................................................................................................................. ·-···············•$ _ _ _ _ _ ~
2. Monies borrowed collaleralized by securities carried for 1he aooiunts of cuslomers (see Nole B) . ..... $

~

3. Monies payable against customers' securities loaned (see Nore C)..................

$

~

4. Customers' securities failed to receive {see Note DJ .............................................................................. $
.$

~
~

. ....

5. Credtt balances in finn accounts whicll are allribulable lo principal sales lo cus1omers..........
6. Martel value of stock dividends, 51D<:k splits and similar disbibulions receivable outstanding
over 30 calendar days.......
.......................

.$

~

7. "Markel value of short security count differences over 30 calendar days old...
..... $
8. "Markel value of short 5ecuritie3 and credtts (not to be offset by longs or by
debtts) in all slll!jlellse aooiunts over 30 calendar days
.....................
.$
9. Martel value of securities which are in transfer in excess of 40 calendar days and have not been
confinned to be in 1ransfer by 1he transfer ivint or 1he issuer during lhe 40 days.
.............. $

~

lill:g

10.0lher(list: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _~·······················$

I@

~

~

14. Failed lo deliver of customers' secllilies not older lhan 30 calendar days ............................................ $
15. Margin required and on deposit with lhe Options Clearing Corporation for all option conlracls
written or purchased in customer accounts (see Nole F) ..................................................................... $
16. Margin required and on deposit with a clearing agency regislered with the Commission under
sectiol1 17A of lhe Exchange Act (15 U.S.C. 78q-1) or a derivatives clearing organization regislered
with lhe Commodity Futures Trading Commission under seclion 5b of 1he Commodity Exchange
Act (7 U.S.C. 7a-1) related to lhe following types of positions written, purchased or sold in customer
accounts: (1) security futures products and (2) futures conlracls (and options !hereon) canied in a
.............. $_______
secllilies aooiunt pursuant lo an SRO portfolio margining rule (see Note G)..
17. Margin required and on depostt with a clearing agency registered wilh 1he Commission under
section 17Aof lhe Exchange Act (15 U.S.C. 78q-1) 11!51Jlting from lhefo!lowing lypesoflransaclions
in U.S. Treasury securities in customer accounts 1hat have been cleared, settled, and novated by 1he
clearing agency: (1) pun:hases and sales of U.S. Treasury securities; and (2) U.S. Treasury securities
repurchase and reverse repurchase agreements (see No1e H).
....... $ _ _ _ _ _ _ _

11284~

18.0lher(list: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ___, ...................... $

~

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11. TOTALCREDITS(sumoflines 1-10) ......................................................................................................... ····································· ····-············· $ _ _ _ _ _ __
DEBIT BALANCES
12. ~Debtt balances in customers' cash and margin accounts. exduding unsecured accounts and
accounts doubtful of collection (see No1e E) ..................................................................................... $_______ ~
13. Securities borrowed to effecluale shoo sales by customers and securities borrowed lo make
deliveiy on customers' securities failed to deliver.....
........................................... $
~

7402

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
19. -Aggregliedebililems{sumoflines12-18) ............................................................................................................................................................ S _ _ _ _ _ _ ~
20. "l.ess3%(forallemmive melliod only-see Rule 15c3-1(a)(1)(iij) (3%xline llem4470) ...................................................................................... $

~

21. "'TOTALDEBITS(Line 19 lessline 20} •••.•.•••.•••••••.••••.•••••.•••.•.••••••.•.••...••.•.•••••. ·-····································································································· S

~

RESERVE COMPUTATION
22.Excessoftolaldebilsovertctal cre2014

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14. Failed lo deliver of PAB securities not older than 30 calendar days .................................................. $ - - - - ~
15. Margin required and on deposit with Options Clearing Corporation for all option contracts
written or purchased in PAB acoounls (see Nole F}.
.. $ - - - - - ~

7403

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
19. TOTALPABDEBITS(sumoflines12-18) ....................................................................................................................................................... $ _ _ _ _ _ _ _ ~
RESERVE COMPUTATION
20. Excess of total PABdebilsO\ll!l'lotal PAB cre2014

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H. CFTC Adjusted Net Capilal ii excess of early warning level (Item 3750 minus Line G.i or Line G.ii, as applicable) ..................................

7404

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

FORM X-17A-5 PART II (FOCUS Report) GENERAL INSTRUCTIONS

*****
Computation of CFTC Minimum Capital Requirements
This section must be prepared by broker-dealers, nonbank SBSDs, and nonbank MSBSPs
registered with the CFTC as futures commission merchants ("FCMs"), swap dealers, and/or
introducing brokers pursuant to section 4f and 4s, as applicable, of the Commodity Exchange Act
and that elect to file a FOCUS Report in lieu of required CFTC financial reports. (Brokerdealers that notice register as FCMs with the CFTC for the sole purpose of soliciting order,
accepting orders, or executing orders for security futures products on behalf of others are not
subject to CFTC financial reporting requirements.)
This section should be prepared in accordance with the CFTC's Form 1-FR and other
guidance issued by the CFTC or CFTC staff ("CFTC Instructions").

*****
*****
FOCUS
Report
Part IIC

BALANCE SHEET (INFORMATION AS REPORTED ON FFIEC FORM 031 - SCHEDULE RC)
Items on this page lo be reported by a:

Bank SBSD
BankMSBSP

Totals
1. Cash and balances due from deposrtory institutions (from FFIEC Fonn 031's Schedule RC-A)
A Noninlerest-bearing balances and currency and ooin ........................................

$

lij081ij

8. Interest-bearing balances .................................................................................................................................................

$

~

A Held-to-maturity securities..................................................................................

$

~

B. Available-for-sale debt securities................ .................................

$

l1mij

C. Equity securities with readily determinable fair values not held for trading.

$

~

A Federal funds sold in domeslic offices .............................................................................................................................

$

!B987ij

8. Securities purchased under agreements to resell ...........................................................................

$

!B989ij

$

~369ij

$

!B529ij

2. Securities

3. Federal funds sold and securities purohased under agreements to resell

4. Loans and lease financing receivables (from FFIEC Form 031 's Schedule RC~)

A Loans and leases held for sale .........................................................................................................................................
B. Loans and leases held for inveslmenl

$ _ _ _ _ _ !B528ij

C. LESS: Allowance for loan and lease losses

$

$

~

6. Premises and fixed assets {including capitalized leases) ......................................................................................................

$

@145ij

7. other real eslale owned (from FFIEC Form 031's Schedule RC-M) .....................................................................................

$

~

8. Investments in unconsolidated subsidiaries and associated companies

$

@130ij

9. Direct and indirecl inveslments in real estate ventures .......

$

~

10. Intangible assets (from FFIEC Form 031's Schedule RC-M) ...............................................................................................

$

@143ij

11. other assets (from FFIEC Form 031's Schedule RC-F) ............................................................. .................... .

$

@1BOij

12. Total assets (sum of Lines 1 through 11) ..............................................................................................................................

$

@170ij

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D. Loans and leases held for investment net of allowance (Line 4B minus Line 4C) ........................................................
5. Trading assets (from FFIEC Form 031's Schedule RC-0) ...............................................

ER21JA25.064

!3123ij

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
FOCUS
Report
Part IIC

7405

BALANCE SHEET (INFORMATION AS REPORTED ON FFIEC FORM 031 -SCHEDULE RC)
Items on this page to be reported by a:

Bank SBSD
BankMSBSP

Liabilities
13. Deposits
$ _ _ _ _ _ ~200ij

A In domestic offices (sum ollolals of Columns A and C from FFIEC Fonn 031's Schedule RC-E, part I).

1. Noninterest-bearing

$ -----~631ij

2. lnleresl-bearing

$

~636ij

B. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from FFIEC Fonn 031's Schedule RC-E, part II) ........
1. Noninterest-bearing

$ _____~

2. Interest-bearing

$

$ _ _ _ _ _ j2200@

~

14. Federal funds purchased and SOOJrilies sold under agreements lo repurohase .....
A. Federal funds purchased in domeslic offices ....................................................................................................................

$ _ _ _ _ _ jB99aj

B. Securities sold under agreemenls lo repurchase .............................................................................................................

$

!B99@

15. Trading liabilities (from FFIEC Form 031's Schedule RC-0) .................................................................................................

$

j3548ij

16. Olher borrowed money (includes mortgage indebledness) {from FFIEC Form 031's Schedule RC-M) ...............................

$

j3190ij

17. Nol applicable........................................................................................................................................................................
18. Not applicable..................................
19. Subordinaled noles and debentures .....................................................................................................................................

$ _ _ _ _ _ j3200ij

20. Olher liabilities (from FFIEC Form 031's Schedule RC-G) ....................................................................................................

$

~930ij

21. Total liabilities (sum of Lines 131hrough 20) .........................................................................................................................

$

~948ij

23. Perpelual preferred s1ock and relalecl surplus ......................................................................................................................

$

j3838ij

24. Common stock ..................................................................................................................................................................

$

j3230ij

25. Surplus (exclude all surplus related lo preferred stock) .....................

$

j3839ij

26 A Retained earnings................................................................................... ...................................... .. ............................. ..

22. Nol applicable........................................................................................................................................................................

$

j3632ij

B. Accumulated other comprehensive income

$

j853oij

C. other equity capital components ......................................................................................................................................

$

~

$

j321oij

27A Total bank equity capital (sum of lines 23111rough 26.CJ........................................

ddrumheller on DSK120RN23PROD with RULES2

B. Non-all'l!rolling (minority) inlerests in consolidated subsidiaries

$

poooij

28. Total equity capital (sum of Lines 27A and 27B) ..

$

!G105ij

29. Total liabililies and equity capital (sum of Lines 21 and 28)

$

j3300ij

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Equity Capital

7406

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations
REGULATORY CAPITAL (INFORMATION AS REPORTED ON FFIEC FORM 031-SCHEDULE RC-R)

FOCUS

Report
Part IIC

Items on lhis page lo be reported by a:

Bank SBSD
BankMSBSP

~

Totala

1. Tolal bank equity capila! (from FFIEC Form 031's Schedule RC, Line 27A) ..

$ _____ ~

2. Tier 1 capital.. ···············-········· .......••.•............

$

~

3. Tier 2 capital

$

~

4. Tolalcapital...

$

~

5. Tolal risk-weighted assets...........

$

~

6. Total asselsforthe leverage ratio

$

~

Capital Ratios (Column A is lo be completed by all banks. Column B is lo be completed
by advanood approach instilutions lhal exit paralel run only.)

Column A

7. Leverage ratio ••••••••••••••• ·-··············································..·········································-····················

_ _ _ _ _% ~

8. Common equily tier 1 capital ratio

_ _ _ _ _% ~

_ _ _ _ _% ~

9. Tier 1 capital ratio

_ _ _ _ _% ~

_ _ _ _ _% ~

10. Total capilal ratio.

_ _ _ _ _% ~

_ _ _ _ _% [205b~

INCOME STATEMENT {INFORMATION AS REPORTED ON FFIEC FORM 031- SCHEDULE RI)

FOCUS

Report
Part IIC

ColumnB

Items on lhis page to be reported by a:

Bank SBSD
BankMSBSP
Talala

~
[@jl

1. Total interest income

$

2. Total interest expense ...·-····················································.........................................................................

$

3. Total noninrerest income ....................................................................................................................................................................................................

$

[Qffill

4. Total noninrerest expense ............................................. _..... ···················-·····················

$

li@il

5. Realized gains {loss86) on held.lo-maturity securities_····-···

$

~

6. Realized gains {lo6686) on availabl&-for-sala dell! securities

$

~

7. Income (loss) before applicable incoma laxes and discontinued operations

$

~

8. Net income Qoss) ..-itallle to bani<.

$

~

9. Trading revenue (from cash instruments and derivative instruments)

A. Interest rate ei,posures ·························-···········································································-··· ........................................................................................

$

~

B. Foreign ~ e exposures...........................................................................................................................................................................................

$

~

C. Equity security and index exposures ......

$

~

D. Cmnroodity and other exposures

$

E. Credit exposures

$

~
f@ij

Lines 9F and 9G are lo be complehod by banks with $11Ml billion or man, in mm! aaaela that are required lo complem linea 9A through 9E above.

F. lmpad on trading 18V9nue of manges in the oreditworlhiness oflhe bank's derivative counterparties on the banlrs derivative assets (year-lo.date
ohanges)
i. Gross credit valuation adjustment (CVA)

$ _ _ _ _ _ IFT361!

ii. CVAhedge

s

lmnl

G. Impact on lrading revenue of charges in the creditworthiness of the bank on the bank's derivative liabilities (year.fu..date changes)
i. Gross debit valuation adjustment (OVA) ................................................................................................................................·-···········

$ _ _ _ _ _ IFT3Bij

ii. DVAhedge .................................................................................................................................................................................................................

$ _____

lmgij

A. Net gaifls Oosses) on cred~ derivatives held for trading..................................................................................................................................................

$ _ _ _ _ _ IC1189~

B. Net gains (losses) on cred~ derivatives held for purposes olher than trading.................................................................................................................

$

IC890~

11. Creel~ losses on derivatives .................................................................................................................................................................................................

$

~

*****

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10. Net gains (losses) recognized in earnings on credil derivatives that economically hedge oredit exposures held oulside the lrading account

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

7407

*****
OATH OR AFFIRMATION

I, _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __, swear (or affirm) that, to the best of my knowledge and belief, the
financial report pertaining to the firm of - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~ as of
- - - - - - - - - - - - - ~ 2__, is true and correct. I further swear (or affirm) that neither the company nor any
partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely
as that of a customer.
Signature:
Title:

This filing** contains [check all applicable boxes):

*****
BILLING CODE 8011–C

Appendix 4—Form X–17A–19

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BILLING CODE 8011–P

7408

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

FORM X-17A-19

*****
1.

Identify the self-regulatory organization filing this report.

□ AMEX □ BSE □ CBOE □ CSE □ CHX

OISE

□ NASO □ NYSE □ PCX □ PHLX □

Other:- - - - - - -

OISE

□ NASO □ NYSE □ PCX □ PHLX □

Other:- - - - - - -

*****
4.

The subject is also a member of the:

□ AMEX □ BSE □ CBOE □ CSE □ CHX

5.

The examining authority and SIPC collection agent prior to this change in membership status is:

□ AMEX □ BSE □ CBOE □ CSE □ CHX

OISE

□ NASO □ NYSE □ PCX □ PHLX □

Other:- - - - - - -

*****

GENERAL INSTRUCTIONS
*****
2.

3.

Original:

File with the Commission electronically on
EDGAR in accordance with the EDGAR Filer
Manual, as defmed in Rule 11 of Regulation S-T
(§ 232.11) and in accordance with the
requirements ofRegulation S-T.

Copy No. 1 - Mail to:

Securities Investor Protection Corporation
1667 K St. N.W., Suite 1000
Washington, DC 20006-1620

Copy No. 2:

Retain for your files.

The original filed with the Securities and Exchange Commission and the copy filed with the Securities
Investor Protection Corporation shall be signed by a duly authorized official of the national securities
exchange or registered securities association (self-regulatory organization).

*****
6. Copies of this Form may be obtained on the Commission's website.

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*****

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

7409

Form 15A-Application for Registration as a National or Affiliated Securities Association
and Amendments and Supplements Thereto.
WARNING: Failure to keep this form current and to file accurate supplementary information on a timely basis, or
the failure to keep accurate books and records or otherwise comply with the provisions oflaw applying to the
conduct of the association would violate the Federal securities laws and may result in disciplinary, administrative, or
criminal action.
INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACTS MAY CONSTITUTE CRIMINAL
VIOLATIONS.
Note: The granting ofregistration is not to be deemed permanent approval of the association's rules and practices.

{Entity} is making this filing pursuant to the following Rule: (select one)
Submission type:
□

Rule 15aa-l -Application for Registration as a National Securities Association or an
Affiliated Securities Association
□ Initial (select type of application)
□ A National Securities Association
□ An Affiliated Securities Association
□ Amendment to Application - Amendment ######
□ Consent to Extension of Time
□ Date Extension Expires: MM/DD/YYYY
□ Withdrawal of Application

□

Rule 15aa-2(a)- Correcting Amendment

□

Rule 15aa-2(b) - Current Supplements to Registration
□

Does information being reported include a change in Exhibit C? Yes/No
o If Yes, provide the month in which changes to Exhibit C occurred: mm/yyyy

□

Rule 15aa-2(c) - Annual Supplement as of March 1, YYYY

□

Rule 15aa-2(c)(l)(ii)-Triennial Supplements for Year: YYYY

□

Rule 15aa-2(c)(2)-Annual Financial Supplement as ofmm/dd/yyyy

□

Rule 15aa-2(d)(2) - Materials

This space left intentionally blank
Section I: Organization
1)
Exact name of Association: {Entity}

VerDate Sep<11>2014

Addresses:
□
Check if information has changed since previous filing
a) Statutory office:
Street: - - - - - - - - - - - - - - - City_ _ _ _ _ _ _ _ _, State_ _ _ Zip Code_ _ __
b) Principal executive office:
□ Same as above
Street: - - - - - - - - - - - - - - - -

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2)

7410

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

City_ _ _ _ _ _ _ _ _ _, State_ _ _ Zip Code_ _ _ __
c) Branch or District Offices:
D Not Applicable
D A list of all branch or district offices, including the street, city, state, zip code, shall
be provided and marked as Schedule I.
3)
Name and address of each person authorized to receive service of process and notices on
behalf of the association from the Commission. Email address of each person authorized
to receive notices on behalf of the association from the Commission. If more than one
person, provide the information in Schedule II.
Name: - - - - - - - - - - - - - - - Title: - - - - - - - - - - - - - - - Street: - - - - - - - - - - - - - - - City: _ _ _ _ _ _ _ _ _ _ , State: _ _ _ Zip Code: _ _ _ __
Email: - - - - - - - - - - - - - - - - 4)
Name, address and email address of counsel to the association, if any:
Name: - - - - - - - - - - - - - - - Street: - - - - - - - - - - - - - - - City: _ _ _ _ _ _ _ _ _ , State: _ _ _ Zip Code: _ _ __
Email: - - - - - - - - - - - - - - - - 5)
Legal Status
D Form of organization of association (select one):
D Check if information has not changed since previous filing
□ Sole Proprietorship
□ Corporation
D Partnership
□ Limited Liability Company
D Other (Specify): _ _ _ _ __
D Date of organization in present form: mm/dd/yyyy
□ Name of state and reference to any statute thereof under which organized:
{State/Territory}
Statute: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
6)
Officers, Directors, Committee members, and other persons.
Provide the following information as Schedule III:
a) A listing of all officers, directors (or persons occupying similar status or performing
similar functions), the chairman of the national business conduct committee, and the
chairman of each regional business conduct committee. The listing shall include (1)
Name (last name, first name, middle name); (2) Title, (3) Name of firm with which such
person is associated, (4) Location (city and state) of the particular office of the firm with
which such person is connected, and (5) Periods during which the present incumbent has
held the same office or position.
b) A listing for each national and regional standing committee. The listing shall include (1)
Name of each member, (2) Name of firm with which such member is associated, and (3)
Location (city and state) of the particular office of the firm with which such person is
connected.
Rule 15aa-2(c)(l)(i)(A)-(B) In lieu of filing {entity} certifies that the information in Item 6 may be
obtained below and is accurate as of the publication date:
Name of Publication: _ _ _ _ _ _ _ _ _ _ Name: _ _ _ _ _ _ __
Address: _ _ _ _ _ _ _ _ _ _ _ _ _ Telephone#: _ _ _ _ __
Price of Publication $_ _ _ _ _ _ _ _ _ _ Date of Publication: mm/dd/yyyy

Exhibit A - Governing Documents

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□

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

7411

Provide copies of the association's constitution, charter, or articles of incorporation or association, with all
amendments thereto, and of its existing bylaws, and of any rules or instruments corresponding to the
foregoing, whatever the name.
□
Rule 15aa-2(c)(l )(ii)(A): In lieu of filing {entity} certifies that the information may be obtained below and
is accurate as of the publication date:
Name of Publication: _ _ _ _ _ _ _ _ _ _ _ Name: _ _ _ _ _ _ _ __
Address: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _Telephone#: _ _ _ _ _ __
Price of Publication $_ _ _ _ _ _ _ _ _ _ _Date of Publication: mm/dd/yyyy
□
Rule 15aa-2(c)(1 )(ii)(B): In lieu of filing {entity} certifies that the information requested under this exhibit
is kept up to date and is available to the Commission and the public upon request.

Exhibit B - Financial Statements
A balance sheet of the association as of a date within 30 days of the filing of this application, or promptly
after the close of each fiscal year if a supplement, together with an income and expense statement for the year
preceding such date or, if the association was organized during such year, for the period from the date of such
organization to the date of such balance sheet.

Exhibit C - Members
A list, as of latest practicable date, alphabetically arranged, of all members of the association indicating for
each: (1) the name (last name, first name, middle name), (2) the principal place of business, and (3) the date
of election to membership for each member elected to membership after December 31, 1994.
□
Rule 15aa-2(b)(3): Changes in the information called for in Items (1) and (2) of Exhibit Care reported in a
record which is published at least once a month by {entity} and promptly filed with the Commission. No
current supplement need be filed with respect thereto.

Exhibit D - Materials
Any notices, reports, circulars, loose-leaf insertions, riders, new additions, lists or other records of changes
when, as, and if such records are made available to members of the association.
□

Section II: Membership

Check if information has not changed since previous filing

7)

What rule or rules of the association deals with admissions to membership?

8)

What rule or rules of the association restricts membership therein
a) On a specified geographical basis?

c) On any basis other than those referred to in (a) or (b) hereof?

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b) On a specified basis relating to the type of business done by the member?

7412

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

9)
What rule or rules of the association prescribes the grounds upon which a broker or
dealer shall not be admitted to or continued in membership in such association in accordance
with Section 15A(b)(4) of the Act?

10)
What rule or rules of the association provides that, in any proceeding to determine
whether a broker or dealer shall be denied membership, such broker or dealer shall be notified of,
and be given an opportunity to be heard upon, the specific grounds for denial which are under
consideration, a record shall be kept, and the determination shall set forth the specific grounds
upon which the denial is based?

Section III: Representation of Membership

□

Check if information has not changed since

previous filing

11) What rule or rules of the association assures a fair representation of its members:
a) In the adoption of any rule of the association or amendment thereto:

b) In the selection of officers and directors of the association

c) In all phases of the administration of the affairs of the association other than those
referred to in (a) or (b) hereof

□ Check if information has not changed since previous

12)
What rule or rules of the association provides for the equitable allocation of dues among
its members to defray reasonable expenses of administration?

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Section IV: Dues and Expenses
filing

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Section V: Business Conduct and Protection of Members

□

7413

Check if information has

not changed since previous filing

13)
What rule or rules of the association is designed to prevent fraudulent and
manipulative acts and practices?

14)
What rule or rules of the association is designed to promote just and equitable
principles of trade?

15)
What rule or rules of the association is designed to provide safeguards against
unreasonable profits or unreasonable rates of commissions or other charges?

16)

Financial Statements
a) Does the association require financial statements from its members? Yes/No
If es, s ecif t es of members included in and excluded from such re uirement

If yes, provide answers to 16(b)-(d) below.
b) How frequently and with what notice does the association require such statements?

c) Must such statements be certified by independent certified or public accountants?
Yes/No

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d) What procedure does the association employ in checking the accuracy of such
statements?

7414

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

17)
Give reference to the rules of the association with respect to insolvency of members;
limitations on members' maximum indebtedness, or ratio of indebtedness to capital;
methods of financing "when, as and if issued" trading; other provisions concerning financial
responsibility of members.

18)
Give reference to the rules of the association with respect to hypothecation of securities
carried for customers' accounts; segregation in safekeeping of customers' free securities;
handling of customers' free credit balances; sending of regular monthly statements to customers
showing the amount of the customer's free credit balance, if any, and a list of fully paid
securities, if any, held in safekeeping; securities sold to customers on an installment plan;
lending of securities carried for customers' accounts; manner, method and place of soliciting
business including matters pertaining to securities salesmen.

19)
Give reference to the rules of the association with respect to keeping and preservation
of minimum specified books and records.

20)

Give reference to the rules of the association with respect to:

a) Fictitious quotations. ________________
b) Nominal quotations. _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
21)
Are any rules of the association substantially identical with any rules promulgated
by the Commission? Yes/No. If so, state which:

Give reference to the rules of the association with respect to discretionary accounts.

23)
What reports or special questionnaires, other than financial statements referred to in
Item 16 above, are or may be required of members either periodically or regularly? Also
provide information as to how frequently and with what notice such reports are required.

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22)

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Section VI: Disciplining of Members

7415

□ Check if information has not changed since previous filing.

What rule or rules of the association:
24)
Provides that its members shall be appropriately disciplined, by expulsion, suspension,
fine, censure, or any other fitting penalty, for any violation of its rules?

25)
Prescribes the procedure to be followed in any proceeding to determine whether a
member shall be disciplined in accordance with Section 15A(b)(7) of the Act?

Section VII: Affiliated Associations □ Check if information has not changed since previous filing.
26)
What rule or rules of the association, if any, provides for the admission of registered
affiliated securities associations?

Section VIII: Miscellaneous

□

Check if information has not changed since previous filing.

27)
What rule or rules of the association, if any, specifically regulates the dealings of a
member with any nonmember broker or dealer?

Section IX: Additional Information for Registration as an Affiliated Securities Association
□

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Check if information has not changed since previous filing

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28)
What rule or rules of the association provides a method for enforcing compliance on the
part of its members with the rules of the association?

7416

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

29)
Respond to this section only if application is made for registration as an affiliated
securities association:
a) To which registered national securities association will the applicant forthwith upon
registration apply for admission to affiliation?
b) State reasons for believing that such affiliations will be granted.

30) Estimate annual dollar volume of transactions effected by members of the applicant
association.
$_ _ _ _ _ _ _ _ _ __
SECTION X: Contact Information
Provide the following information of the contact employee at {association long name} prepared
to respond to questions for this submission:
First Name: - - - - - - - - - - - -

Last Name: - - - - - - - - - - - -

Title: - - - - - - - - - - - - - Email: - - - - - - - - - - - -

Telephone: _ _ _ _ _ _ _ _ _ _ __

SECTION XI: Consent to Service and Attestation
■

BILLING CODE 8011–C

permanent approval of the association’s rules
and practices.

Form 15A General Instructions

ddrumheller on DSK120RN23PROD with RULES2

A. General Instructions for Preparing and
Filing Form 15A
Form 15A is to be used by an entity for
registration with the Securities and Exchange
Commission (the ‘‘Commission’’) as a
national securities association or an affiliated
securities association, and for any
amendments or supplements to such
registration statement under Section 15A of
the Exchange Act. As used hereinafter, the
term ‘‘Form 15A’’ includes the form and any
required exhibits and schedules thereto.
Form 15A shall be filed in an electronic
format through the Commission’s Electronic
Data Gathering, Analysis, and Retrieval
System (EDGAR) in accordance with EDGAR
rules set forth in Regulation S–T (17 CFR Part
232).
Unless the context clearly indicates
otherwise, the terms used in Form 15A have
the meanings given in the Act. Note: The
granting of registration is not to be deemed

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B. Need for Careful Preparation of the
Completed Form, Including Schedules and
Exhibits
A Form 15A that is not prepared and
executed in compliance with applicable
requirements may be returned as not
acceptable for filing. Any filing so returned
shall for all purposes be deemed not to have
been filed with the Commission. See also
Rule 0–3 under the Act (17 CFR 240.0–3).
However, acceptance of Form 15A shall not
constitute a finding that it has been filed as
required or that the information submitted is
true, current or complete.
C. When To Use the Form 15A
Form 15A is composed of seven types of
submissions to the Commission pursuant to
Section 15A of the Act and Rules 15aa–1 and
15aa–2 thereunder. In completing the Form
15A, a registrant shall select the type of filing
and provide all information required by the
rules and instructions thereunder. In

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submitting this Form, its exhibits, and its
schedules, the person by whom it is executed
represents that all information contained
within is true, current and complete. The
types of submissions are:
(1) Rule 15aa–1 submissions are
applications for registration as a national
securities association or an affiliated
securities association. If Form 15A is being
filed as an application for registration as a
national securities association, all applicable
items are required to be answered in full,
except for items in Section IX. If Form 15A
is being filed as an application for
registration as an affiliated securities
association, all applicable items are required
to be answered in full. Note: The granting of
registration is not to be deemed permanent
approval of the association’s rules and
practices.
(2) Rule 15aa–2(a) submissions shall be
filed promptly after the discovery of any
inaccuracy in the registration statement or in
any amendment or supplement thereto. All
amended items are required to be answered
in full. All amended exhibits or schedules are

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By checking this box, {Name of Entity} consents that service of any civil action brought by,
or notice of any proceeding before, the Securities and Exchange Commission in connection with
the association's activities may be given by registered or certified mail to the contact employee
at the main address, or mailing address if different, given in Section I above; and represents that
the information and statements contained herein, including exhibits, schedules, or other
documents attached hereto, and other information filed herewith, all of which are made a part
hereof, are current, true, and complete.

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

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required to be provided completely. Any
item that is not being amended may be left
blank. If no item in a section is being
amended, the association may check the box
next to the applicable section heading
labeled ‘‘Check if information has not
changed since previous filing.’’
(3) Rule 15aa–2(b) submissions shall be
filed promptly after any change which
renders no longer accurate any information
contained or incorporated in the registration
statement or in any amendment or
supplement thereto, except that no current
supplements need be filed with respect to
changes in the information called for in
Exhibit B. All supplemented items are
required to be answered in full. All
supplemented exhibits or schedules are
required to be provided completely. Any
item that is not being amended may be left
blank. If no item in a section is being
supplemented, the association may check the
box next to the applicable section heading
labeled ‘‘Check if information has not
changed since previous filing.’’ Supplements
setting forth changes in the information
called for in Exhibit C need not be filed until
10 days after the calendar month in which
the changes occur. If the submission is being
filed solely to supplement changes in the
information called for in Exhibit C,
association should check the applicable box
and provide the month and year in which the
changes occurred. The association need not
provide a current supplement to Exhibit C if
it checks the box indicating it has complied
with the requirements of Rule 15aa–2(b)(3).
(4) Rule 15aa–2(c) submissions are annual
consolidated supplements to a registration
statement as a national securities association
or an affiliated securities association and
shall be filed promptly after March 1 of each
year. If the association is filing an annual
consolidated supplement to a registration
statement as a national securities association,
all applicable items are required to be
answered in full, except for items in Section
IX. If the association is filing an annual
consolidated supplement to a registration
statement as an affiliated securities
association, all applicable items are required
to be answered in full. The association need
not answer Item 6 if it checks the box
indicating it has complied with the
requirements of Rules 15aa–2(c)(1)(i)(A)–(B)
and provides the applicable information.
(5) Rule 15aa–2(c)(2) submissions shall be
filed promptly after the close of each fiscal

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year of the association. The association is
required to provide a complete Exhibit B.
(6) Rule 15aa–2(c)(1)(ii) submissions shall
be filed promptly by March 1, 2025, and
every three years thereafter. The association
is required either to provide a complete
Exhibit A or check the boxes indicating it has
complied with the requirements of Rules
15aa–2(c)(1)(ii)(A)–(B) and provide the
applicable information.
(7) Rule 15aa–2(d)(2) submissions require
the association to electronically file any
notices, reports, circulars, loose-leaf
insertions, riders, new additions, lists or
other records of changes when, as, and if
such records are made available to members
of the association.
D. Documents Composing the Completed
Form
The completed form filed with the
Commission shall consist of Form 15A,
responses to all applicable items, and any
exhibits and schedules required in
connection with the filing. Any item may be
answered by reference to the page, article,
section or paragraph of any document filed
as an exhibit herewith which contains the
information required. Unless the context
otherwise requires, the terms ‘‘rule of the
association,’’ as used in Form 15A shall
include any provision of the association’s
constitution, charter, articles of incorporation
or association and bylaws, and any rule of
the association or any of its committees and
any settled practice association or of any of
its committees having the effect of a rule.
E. Contact Information and Filing of
Completed Form
Each time an association submits a filing
to the Commission on Form 15A, the
association must provide the contact
information required by Section X of the
form. The contact employee must be
authorized to receive all contact information,
communications and mailings and must be
responsible for disseminating that
information within the association’s
organization.
Consult the EDGAR Filer Manual for
EDGAR filing instructions, including the
instructions for becoming an EDGAR Filer.

General Instructions for Form 19b–4

*

*

*

*

*

F. Signature and Filing of the Completed
Form
All proposed rule changes, amendments,
extensions, and withdrawals of proposed rule
changes shall be filed through the EFFS. All
security-based swap submissions, advance
notices, and amendments, extensions, and
withdrawals of security-based swap
submissions and advance notices shall be
filed to a dedicated email address established
by the Commission, SBSwapsSubmissions@
sec.gov for security-based swap submissions
and [email protected] for
advance notices. In order to file Form 19b–
4 through EFFS, self-regulatory organizations
must request access to the SEC’s External
Application Server by completing a request
for an external account user ID and
password. Initial requests will be received by
contacting the Trading and Markets
Administrator located on our website
(https://www.sec.gov). An email will be sent
to the requestor that will provide a link to a
secure website where basic profile
information will be requested.
A duly authorized officer of the selfregulatory organization shall electronically
sign the completed Form 19b–4 as indicated
on Page 1 of the Form. A registered clearing
agency for which the Commission is not the
appropriate regulatory agency also shall file
with its appropriate regulatory agency three
copies of the form, one of which shall be
manually signed, including exhibits. A
clearing agency that also is a designated
clearing agency shall file with the Board of
Governors of the Federal Reserve System
(‘‘Federal Reserve’’) three copies of any form
containing an advance notice, one of which
shall be manually signed, including exhibits;
provided, however, that this requirement
may be satisfied instead by providing the
copies to the Federal Reserve in an electronic
format as permitted by the Federal Reserve.
The Municipal Securities Rulemaking Board
also shall file copies of the form, including
exhibits, with the Federal Reserve, the
Comptroller of the Currency, and the Federal
Deposit Insurance Corporation.

*

*

*

*

*

Appendix 6—Form 19b–4

Appendix 7—Form CA–1

*

BILLING CODE 8011–P

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7418

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

United States Securities and Exchange Commission
Washington, DC 20549
Form CA-1: Application for registration or for exemption from registration as a clearing agency
and for amendment to registration pursuant to the Securities Exchange Act of 1934 ("the Act")
INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACTS MAY CONSTITUTE CRIMINAL VIOLATIONS
(See 18 U.S.C.1001 AND 15 U.S.C. 78ff(a))

Page 1 of __

File No.: CAl-[acronym]-YYYY-####

Form Filing Submission Types

{Name of registrant} is making this filing pursuant to: (select one)
□

Rule 17ab2-1 (a) - Application (select one)
□ Request for registration as a clearing agency
•

□

Does registrant request the Commission to consider granting registration in
accordance with paragraph (c)(l) of Rule 17ab2-1 under the Act? Yes/No
Request for exemption from registration as a clearing agency

□

Rule 17ab2-l(d) and (e) Amendment to Application-Amendment####

□

Consent to Extension of Time
□

□
□

□

Date Extension Expires: mm/dd/yyyy

Withdrawal of Application

Rule 17ab2-1 (e) Amendment to registration or exemption from registration as a clearing
agency
Sec. 17A(b )( 1) - Conditions, reports, notices or other submissions to the Commission
required as directed in any order approving applications for exemption from registration as a
clearing agency

Section I - Registrant Information

1) Name and Address Information
□

Check box if this filing makes a name change of the Registrant
a) Name of Registrant:
i) Previous name of registrant:
b) IRS Employee Identification Number:##-##########
Check box if this filing amends the name under which clearing agency activities are
conducted.
c) Name under which clearing agency activities are conducted, if different:

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□

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

7419

i) Previous name under which clearing agency activities are conducted:
d) Address of principal place of business (Do not use a P.O. Box):
Street: - - - - - - - - - - - - - - City_ _ _ _ _ _ _ _ _ _ , State_ _ _ Zip Code_ _ _ __
Business Telephone: (
) _ _ _ _ _ _ _ __
e) Mailing Address:
□ Same as above
Street: - - - - - - - - - - - - City_ _ _ _ _ _ _ _ _ , State_ _ _ Zip Code_ _ __
2) Information about the person in charge ofregistrant's clearing agency activities:
Name: (First, Middle, Last) _ _ _ _ _ _ _ _ _ __
Title: - - - - - - - - - - - - - - Street: _ _ _ _ _ _ _ _ _ _ _City_ _ _, State_ _ _ Zip Code_ _ __
Email:

Telephone: (

------------

) _ _ _ _ _ _ _ __

3) Legal Status of Registrant (select one):
□

Corporation
National Association
□ Partnership
□ Limited Liability Company
□ Other (Specify): _ _ _ _ _ _ _ _ __
Date oflncorporation or Organization: mm/dd/yyyy
□

Jurisdiction oflncorporation or Organization: {State/Territory}
Section II:

Contact Employee Information

Provide the following information of the person at {name of registrant} prepared to respond to
questions for this submission:

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Last Name:
Telephone:

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First Name:
Title:
Email:

7420

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Item 4:
Other
Arrangements

Does registrant have any arrangement with any other person under which,
with respect to registrant's clearing agency activities, such other person
processes, keeps, transmits or maintains any securities, funds, records or
accounts ofregistrant or registrant's participants relating to clearing agency
activities?

Yes/
No

If yes, furnish, as to each such arrangement, the full name and principal
business address of the other person and a brief summary of each such
arrangement.
Item 5:
Insurance
Information

a)

With respect to clearing agency activities, please provide the
following information regarding the type of insurance carried or
provided:

1. Blanket Bond

□

□

$

$

2. Fidelity

□

□

$

$

3. Errors and
Omissions

□

□

$

$

4. Mail Policy

□

□

$

$

5. Air Courier

□

□

$

$

6. Lost Instrument

□

□

$

$

7. Other (Specify):

□

□

$

$

b)

If any of registrant's clearing activities are not covered by insurance,
has provision been made for self-insurance?

Yes/
No

If yes, indicate the provisions made for self-insurance(~, accounting
reserve or funded reserve) and the amount thereof.
As a result of registrant's clearing agency activities, is registrant
exposed to loss if a participant fails to perform its obligations to the
clearing agency, any other participant or any other person?

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If yes, describe the operational, organizational or other rules, procedures or
practices (citing rules if applicable) which result in registrant's exposure to
loss.

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Yes/
No

ER21JA25.079

c)

7421

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

d)

Does the registrant maintain a clearing or participants' fund, mark to
the market open obligations involving the purchase or sale of
securities or otherwise require participants to protect registrant
against losses to which it may be exposed as a result of a
participant's failure to perform its obligations to the clearing agency,
any other participant or any other person?

Yes/
No

If yes, describe the operational, organizational or other rules, procedures or
practices (citing rules if applicable) which are designed to protect
registrant against any such losses.
Item 6:
Audit
Information

Item 7:
Policies and
Procedures
Item 8: Other

a)

Is registrant audited by an independent accountant?

b)

If registrant is audited by an independent accountant, does the audit
include a review of internal controls related to clearing agency
activities?

c)

Fiscal year-end of registrant: mm/yyyy

Yes/
No

Yes/
No

Describe the registrant's internal policies and procedures for reconciling
differences (including long and short stock record differences and dividend
differences) in its clearing agency activities?
a)

How many employees does registrant have engaged in clearing agency
activities?#####

b)

How many years has registrant performed clearing agency activities?
#####

Are registrant's clearing agency activities subject to regulation by any
Federal agency other than the Commission or by any state or political
subdivision?
If yes, specify the name of the agency, state or political subdivision:
a)

Have the registrant's clearing agency activities been the subject of
periodic examinations by any Federal agency other than the
Commission or by any state or political subdivision?
If yes, specify the name of the agency, state or political subdivision:

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b)

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Yes/
No

Yes/
No

ER21JA25.080

Item 9: Other
Regulatory

7422

Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Exhibit
A:

Exhibit
B:

List any person who either directly or indirectly, through agreement or
otherwise, may control or direct the management or policies of registrant. For
each person listed, provide the full name and address and attach a copy of each
written agreement or, if the agreements are unwritten, describe the agreement or
arrangement through which such person exercises or may exercise such control
or direction.
List the registrant's corporate officers, trust officers, managers or other persons
occupying a similar status or performing similar functions who supervise, or
are directly responsible for the conduct of, registrant's clearing agency
activities, indicating for each:
(a) Name;
(b) Title;
(c) Area ofresponsibility; and

Exhibit C:

Attach narrative and graphic descriptions ofregistrant's organizational
structure. If clearing agency activities are conducted primarily by a division,
subdivision, or other segregable entity within the registrant corporation or
organization, identify the relationship of such entity to the registrant's overall
organizational structure and limit the descriptions to the division, subdivision or
other segregable entity which performs clearing agency activities.

Exhibit D:

Attach a list of persons who directly or indirectly, through one or more
intermediaries, are controlled by, or are under common control with, the
clearing agency and indicate the nature of the control relationship.
Attach a copy of the currently effective constitution, articles of incorporation or
association, bylaws, rules, procedures and instruments corresponding thereto, of
the registrant and a complete list of all dues, fees and other charges imposed by
registrant for its clearing agency activities.

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Exhibit E:

Exhibit F:

Attach a brief description of any material pending legal proceeding, other than
ordinary and routine litigation incidental to the business, to which the registrant
or any of its subsidiaries is a party or to which any of its or their property is the
subject. Include the name of the court or agency in which the proceeding is
pending, the date instituted, and the principal parties thereto, a description of
the factual basis alleged to underlie the proceeding and the relief sought.
Include similar information as to any such proceeding known to be
contemplated by governmental agencies.

Exhibit G:

Attach copies of all contracts with any national securities exchange, national
securities association or clearing agency or securities market for which the
registrant acts as a clearing agency or performs clearing agency functions.

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ER21JA25.081

(d) A brief account of the business experience during the last five (5) years.

Exhibit H:

Attach a balance sheet and statement of income and expenses, and all notes or
schedules thereto of registrant, as of registrant's most recent fiscal year for
which such information is available, certified by an independent accountant. (If
certified financial information is not available, uncertified financial information
should be submitted).

Exhibit I:

Attach the addresses of all offices in which clearing agency activities are
performed by registrant, or for registrant by any person listed in response to
Item 4, and identify the nature of the clearing activities performed in each
office listed.

Exhibit J:

Attach narrative descriptions of each service or function performed by the
registrant.

Exhibit K:

Attach a description of the measures or procedures employed by registrant to
provide for the security of any system which performs the functions of a
clearing agency. Include a general description of any operational safeguards
designed to prevent unauthorized access to the system (including unauthorized
input or retrieval of information for which the primary record source is not hard
copy). Identify any instances within the past year in which the described
security measures or safeguards failed to prevent unauthorized access to the
system and describe any measures taken to prevent a recurrence of any such
incident. Describe also any measures used to verify the accuracy of
information received or disseminated by the system.

Exhibit L:

Attach a description of the measures or procedures employed by registrant to
provide for the safeguarding of securities and funds in its custody or control.
Identify any instances within the past year in which the described security
measures or safeguards failed to prevent any unauthorized access to securities
or funds in possession of registrant and any measures taken to prevent a
recurrence of any such incident.

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ER21JA25.082

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Federal Register / Vol. 90, No. 12 / Tuesday, January 21, 2025 / Rules and Regulations

Exhibit M:

If clearing agency functions are performed by automated facilities or systems,
attach a description of all backup systems or subsystems which are designed to
prevent interruptions in the performance of any function as a result of technical
or other malfunction. Include backups for input or output links to the system
and precautions with respect to malfunctions in any areas external to the
system.

Exhibit N:

Attach a list of the persons who currently participate, or who have applied for
participation, in registrant's clearing agency activities (if registrant performs
more than one activity, a columnar presentation may be utilized).

Exhibit 0:

Attach as a description of any specifications, qualifications, or other criteria
which limit, are interpreted to limit, or have the effect of limiting access to, or
use of, any clearing agency service furnished by the registrant and state the
reasons for imposing such specifications, qualifications, or other criteria.

Exhibit P:

Attach copies of any form of contracts governing the terms on which persons
may subscribe to clearing agency services provided by the registrant.

Exhibit Q:

Attach a schedule of any prices, rates or fees fixed by registrant for services
rendered by its participants.

Exhibit R:

Attach a schedule of any prohibitions or limitations imposed by the clearing
agency on access by any person to services offered by any participant.

BILLING CODE 8011–C

Section VIII: Application for Exemption
Exhibit S:
If this is an application for an exemption
from registration as a clearing agency, attach
a statement demonstrating why the granting
of an exemption from registration as a
clearing agency would be consistent with the
public interest, the protection of investors
and the purposes of Section 17A of the Act,
including the prompt and accurate clearance
and settlement of securities transactions and
the safeguarding of securities and funds.

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Section IX: Sec. 17A(b)(1) Documents
Exhibit T:
For any conditions, reports, notices or
other submissions to the Commission
required as directed in any order approving
applications for exemption from registration
as a clearing agency attach such document(s)
as Exhibit T.

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Section X: Request for Confidential
Treatment
The registrant is requesting confidential
treatment be accorded with respect to certain
of the information disclosed, and is
furnishing a statement requesting
confidential treatment, detailing the specific
responses, schedules and exhibits for which
confidential treatment is sought, and
specifying both the exemptive provision
under the Freedom of Information Act (5
U.S.C. 552(b)) on which the request is based
and the considerations which make the
exemptive provision applicable to the
information for which confidential treatment
is requested.
Section XI: Execution
{Name of Registrant} who is submitting
this Form, its schedules, its exhibits and its
attachments and the person by whom it is
executed represent hereby that all
information contained herein is true, current
and complete. Submission of any amendment
after registration has become effective
represents that Items 1–3 and any schedules,
exhibits and attachments related to Items 1–

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3 remain true, current and complete as
previously submitted.
{Name of Registrant} agrees and consents
that the notice of any proceedings under
Sections 17A or 19 of the Act involving
{name of registrant} may be given by sending
such notice by registered or certified mail, or
by whatever other means are allowed by law,
to the person named, and at the address
given, in response to Item 2.
Date {auto fill} {Name of Registrant}
By: ____[Digital Signature] ____
Title____
Form CA–1 General Instructions
A. General Instructions for Preparing and
Filing Form CA–1
Form CA–1 is to be used by clearing
agencies, as defined in Section 3(a)(23) of the
Securities Exchange Act of 1934 (‘‘the Act’’),
which perform the functions of a clearing
agency with respect to any security other
than an exempted security, as defined in
Section 3(a)(l2) of the Act, to apply for
registration or for exemption from
registration or to amend registration with the

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Securities and Exchange Commission (the
‘‘Commission’’). As used hereinafter, the
term ‘‘Form CA–1’’ includes the form and
any required schedules, exhibits or
attachments thereto. A response is required
for every exhibit. For any exhibit that is
inapplicable, a statement to that effect shall
be furnished in lieu of such exhibit.
Form CA–1 shall be filed in an electronic
format through the Commission’s Electronic
Data Gathering, Analysis, and Retrieval
System (EDGAR) in accordance with EDGAR
rules set forth in Regulation S–T (17 CFR part
232).
With the exception of certain attachments,
Form CA–1 must be provided as an
Interactive Data File in accordance with Rule
405 of Regulation S–T. This requirement
does not extend to submissions that
constitute copies of existing documents other
than the financial statements (e.g., the copy
of the clearing agency’s currently effective
constitution, articles of incorporation or
association, bylaws, rules, procedures and
instruments corresponding thereto, that is
required to be provided as Exhibit E; the
copy of a form of participant agreement that
is required to be provided as Exhibit P; any
reports, assessments, or formal opinions
provided by internal or external auditors,
attorneys, or similar assessors, or other
similar documents that were prepared for a
purpose other than submission of the Form
CA–1). The requirement to provide Form
CA–1 as an Interactive Data File applies to
each of the 3 submissions described in
General Instruction H below.
In addition, with respect to a clearing
agency for which the Commission is not the
appropriate regulatory agency, as defined in
Section 3(a)(34)(B) of the Act, Section
17(c)(1) of the Act requires such clearing
agency to file with the appropriate regulatory
agency for such clearing agency a signed
copy of any application, document or report
filed with the Commission. Each clearing
agency should retain an exact copy of Form
CA–1 for the clearing agency’s records.
Unless the context clearly indicates
otherwise, the terms used in Form CA–1 have
the meanings given in the Act.
Unless the context otherwise requires,
‘‘registrant’’ means the entity on whose
behalf Form CA–1 is filed, whether filed as
a registration, as an application for
exemption from registration or as an
amendment to a previously filed Form CA–
1.
B. Need for Careful Preparation of the
Completed Form, Including Schedules and
Exhibits
A Form CA–1 which is not prepared and
executed in compliance with applicable
requirements may be returned as not
acceptable for filing. Any filing so returned
shall for all purposes be deemed not to have
been filed with the Commission. See also
Rule 0–3 under the Act (17 CFR 240.0–3).
However, acceptance of Form CA–1 shall not
constitute a finding that it has been filed as
required or that the information submitted is
true, current or complete.
Individuals’ names, except for executing
signatures, shall be given in full wherever
required (last name, first name, and middle

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name). The full middle name, if one exists,
is required. Initials are not acceptable unless
the individual legally has only an initial.
C. When to Use the Form CA–1
Form CA–1 is composed of 3 types of
submissions to the Commission pursuant to
Section 17A(b)(1) of the Act and Rule 17ab2–
1 thereunder. In completing the Form CA–1,
a registrant shall select the type of filing and
provide all information required by the rules
and instructions thereunder. For any exhibit
that is inapplicable, a statement to that effect
shall be furnished in lieu of such exhibit. In
submitting this Form, its schedules, its
exhibits and its attachments, the registrant
and the person by whom it is executed
represents that all information contained
within is true, current and complete. The
types of submissions are:
(1) Rule 17ab2–1(a) submissions are
applications for registration as a clearing
agency or for exemption from registration as
a clearing agency. If Form CA–1 is being filed
as a registration form or an application for
exemption from registration, all applicable
items are required to be answered in full. If
any item is not applicable respond with
‘‘none’’ or ‘‘N/A’’ (not applicable) as
appropriate. If the Form is filed as a
registration, indicate whether the applicant
requests the Commission to consider granting
registration in accordance with paragraph
(c)(1) of Rule 17ab2–1. If Form CA–1 is being
filed as an application for exemption from
registration, it must be accompanied by a
statement, marked as Exhibit S,
demonstrating why the granting of an
exemption from registration as a clearing
agency would be consistent with the public
interest, the protection of investors and the
purposes of Section 17A of the Act.
(2) Rule 17ab2–1(e) submissions shall be
filed promptly following the date on which
information reported on Items 1–3 on Form
CA–1 becomes inaccurate, incomplete or
misleading. Submission of any amendment
after registration has become effective
represents that Items 1–3 and any schedules,
exhibits and attachments related to Items 1–
3 remain true, current and complete as
previously submitted.
(3) Sec. 17A(b)(1) submissions shall be
filed as directed by any order approving an
application for exemption from registration
as a clearing agency. Such submissions may
include any report, notice or other
submission as ordered by the Commission as
a condition of granting exemption from
registration.
D. Documents Composing the Completed
Form
The completed form filed with the
Commission shall consist of Form CA–1,
responses to all applicable items, and any
schedules and exhibits required in
connection with the filing. Each filing shall
be marked on Form CA–1 with the initials of
the registrant, the four-digit year, and the
number of the filing for the year (e.g., CA1initials–YYYY–XXX).
E. Contact Information; Signature; and Filing
of Completed Form
Each time a registrant submits a filing to
the Commission on Form CA–1, the

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registrant must provide the contact
information required by Section II of the
form. The contact employee must be
authorized to receive all contact information,
communications and mailings and must be
responsible for disseminating that
information within the registrant’s
organization.
Consult the EDGAR Filer Manual for
EDGAR filing instructions, including the
instructions for becoming an EDGAR Filer.
If Form CA–1 is filed by a corporation, it
shall be signed in the name of the
corporation by a principal officer duly
authorized; if it is filed other than by a
corporation it shall be signed by a duly
authorized principal of the organization
filing the Form. As used in this Form,
principal officer means the president, vice
president, treasurer, secretary, comptroller or
any other person performing a similar
function.
The EDGAR receipt confirmation that
demonstrates who filed the Form CA–1 shall
be preserved pursuant to the requirements of
Section 17 of the Act and any rules and
regulations thereunder. See, e.g., Rule 17a–1
under the Act (17 CFR 240.17a–1).
Request for Confidential Treatment
In responding to, and furnishing the
schedules required by, the items on Form
CA–1, the registrant may request that
confidential treatment be accorded with
respect to the information disclosed. The
registrant must furnish a statement
requesting confidential treatment, detailing
the specific responses, schedules and
exhibits for which confidential treatment is
sought, and specifying both the exemptive
provision under the Freedom of Information
Act (5 U.S.C. 552(b)) on which the request is
based and the considerations which make the
exemptive provision applicable to the
information for which confidential treatment
is requested.
F. Notice
Disclosure to the Commission of the
information requested in Form CA–1 (except
for the disclosure by an individual registrant
of his Social Security number as an IRS
Employee Identification Number, which is
voluntary) is a prerequisite to the processing
of applications for registration or for
exemption from registration as a clearing
agency.
An agency may not conduct or sponsor,
and a person is not required to respond to,
a collection of information unless it displays
a current valid control number. Under
Sections 17, 17A(b) and 23(a) of the Act and
the rules and regulations thereunder, the
Securities and Exchange Commission is
authorized to solicit the information required
to be supplied by this Form from applicants
for registration or for exemption from
registration as a clearing agency. See 15
U.S.C. 78q, 78q–1(b) and 78w(a).
The information will be used for the
principal purpose of determining whether
the Commission should grant registration or
an exemption from registration or institute
proceedings to deny registration. Social
Security numbers, if furnished, will be used
only to assist the Commission in identifying

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applicants and, therefore, in promptly
processing applications.
It is estimated that a clearing agency will
have an average burden of approximately 338
hours completing a new application on the
Form CA–1, and 58 hours completing an
amendment to an application on the Form
CA–1. Any member of the public may direct

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to the Commission any comments concerning
the accuracy of the burden estimate on the
facing page of Form CA–1 and any
suggestions for reducing this burden.
It is mandatory that an applicant seeking
to operate as a clearing agency or as an
exempt clearing agency file Form CA–1 with
the Commission. It is also mandatory that

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registrants file amendments to Form CA–1
under Rule 17ab2–1(e).
Information supplied on this Form will be
included routinely in the public files of the
Commission.
[FR Doc. 2024–30433 Filed 1–17–25; 8:45 am]
BILLING CODE 8011–01–P

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