3235-0410 Supporting Statement, (2025 Extension)

SUPPORTING STATEMENT
for the Paperwork Reduction Act Information Collection Submission for
Rules 17h-1T and 17h-2T
OMB Control No. 3235-0410
This submission is being made pursuant to the Paperwork Reduction Act of 1995, 44 U.S.C.
Section 3501 et seq.
A.

JUSTIFICATION
1.

Information Collection Necessity

On July 16, 1992, the Commission adopted Rules 17h-1T and 17h-2T (17 CFR 240.17h1T and 17 CFR 240.17h-2T) (the “risk assessment rules”), under the Securities Exchange Act of
1934 (“Exchange Act”) pursuant to its authority under the risk assessment provisions of the
Market Reform Act of 1990 (Pub. L. No. 101-432, 104 Stat. 963 (1990)).1 These rules are
intended to give the Commission access to information concerning the financial and securities
activities of certain broker-dealer affiliates. A broker-dealer may be affected by the financial
difficulties of an affiliate both directly, such as by the affiliate’s withdrawal of capital to meet the
affiliate’s obligations, and indirectly, such as by the effect that the affiliate’s difficulties may
have on the broker-dealer’s ability to obtain financing. This impact on a broker-dealer may be
exacerbated in times of market stress. Accordingly, Rules 17h-1T and 17h-2T enable the
Commission to monitor the activities of broker-dealer affiliates through its access to affiliate
information and receipt of reports on a quarterly basis.
Rule 17h-1T requires a covered broker-dealer to maintain and preserve records and other
information concerning certain entities that are associated with the broker-dealer. This
requirement extends to the financial and securities activities of the holding company, affiliates
and subsidiaries of the broker-dealer that are reasonably likely to have a material impact on the
financial or operational condition of the broker-dealer. Rule 17h-2T requires a covered brokerdealer to file with the Commission reports concerning the information required to be maintained
and preserved under Rule 17h-1T within 60 calendar days of the end of each fiscal quarter.
However, Rule 17h-2T also allows a firm to file its year-end financial statements separately from
the rest of its fiscal fourth quarter report, within 105 calendar days of the end of that quarter.2
The Commission is statutorily authorized by Section 17(h) of the Exchange Act of 1934
(15 U.S.C. 78q(h)) to adopt rules that require a broker-dealer to maintain and preserve risk
assessment information with respect to those entities that are associated with the broker-dealer
whose “business activities are reasonably likely to have a material impact on the financial and
1

See Final Temporary Risk Assessment Rules, Exchange Act Release 30929 (July 16, 1992), 57 FR 32159
(July 21, 1992).

2

Thus, the same information is filed with the Commission whether the broker-dealer files all the information
within 60 calendar days of the end of the fiscal fourth quarter or some of the information within 60 calendar
days and the rest within 105 calendar days of the end of the fiscal fourth quarter.

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operational condition” of the broker-dealer. In addition, Section 17(h) authorizes the
Commission to adopt rules that require a broker-dealer to file, no more frequently than quarterly,
summary reports of the information and records maintained pursuant to the risk assessment rules.
Further statutory authority is found in Section 23(a) of the Exchange Act (15 U.S.C. 78w).
2024 Rule Amendments (Rule 17h-2T: Form 17-H)
On December 16, 2024, the Commission voted to adopt amendments to Rule 17h-2T to
require Form 17-H to be filed in the Commission’s Electronic Data Gathering and Retrieval
(“EDGAR”) system.3 Previously, Rule 17h-2T permitted Form 17-H to be filed with the
Commission in paper-based format. The Commission did not substantively change the
information that must be filed in connection with Form 17-H under Rule 17h-2T but only the
manner and format in which that information is filed. The EDGAR-filing requirement for Form
17-H is new, although filers had the option to file in EDGAR voluntarily prior to the
amendments and almost all of them elected to do so. The amendments also required Item 4
(financial statements) of Form 17-H to be filed in EDGAR and provided in the Inline eXtensible
Business Reporting Language (“Inline XBRL”) structured data language. The Inline XBRL
requirement is a new requirement.
More specifically, prior to the effectiveness of the rule amendments, broker-dealers
subject to the filing requirement may choose to file the form in paper to the Commission’s
headquarters in Washington, DC, or may choose to file the form in EDGAR. As of December
31, 2023, approximately 99% of the 238 broker-dealers subject to Rule 17h-2T utilized EDGAR
to make their required Form 17-H filings. The remaining broker-dealers submitted the Form 17H in paper form. For electronic filing on EDGAR, the facing page and Part II of Form 17-H are
fillable forms that EDGAR subsequently converts into a structured, eXtensible Markup
Language (“XML”)-based data language specific to Form 17-H.
With the 2024 rule amendments, the Commission is retaining the custom XML
functionality for the facing page disclosures and Part II (associated persons disclosures) that is
already built into the voluntary EDGAR-filing process for Form 17-H. The rule amendments do
not change the materials filed under the rule or the custom XML requirements but alter existing
requirements by mandating that Form 17-H be filed on EDGAR and that the financial statements
required by Item 4 of Form 17-H be structured in Inline XBRL.4

3

See Electronic Submission of Certain Materials Under the Securities Exchange Act of 1934; Amendments
Regarding the FOCUS Report; SEC Release Nos. 33–11342; 34–101925; IC– 35420; (Dec. 16, 2024); 90
FR 7250 (Jan. 21, 2025) (File No. S7-08-23).

4

The Commission recently extended the compliance date for certain of the 2024 rule amendments by twelve
months. See Extension of Compliance Dates for Electronic Submission of Certain Materials Under the
Securities Exchange Act of 1934; Amendments Regarding the FOCUS Report; SEC Release Nos. 3311386; 34-103877; IC-35738; (Sept. 8, 2025); 90 FR 43552 (Sept. 10, 2025) (File No. S7-08-23).

3
2.

Information Collection Purpose and Use

The information required by Rules 17h-1T and 17h-2T is necessary to enable the
Commission to monitor the activities of a covered broker-dealer’s affiliate whose business
activities are reasonably likely to have a material impact on the financial and operational
condition of the broker-dealer. Without this information, the Commission would be unable to
assess the potentially damaging impact of the affiliate’s activities on the broker-dealer.
3.

Consideration Given to Information Technology

As stated above, the Commission is requiring Form 17-H to be filed in EDGAR and
provided in Inline XBRL. Previously, broker-dealers subject to Rule 17h-2T may—but were not
required to—file Form 17-H in EDGAR, but almost all of them voluntarily filed the form in
EDGAR. As mentioned, the Inline XBRL requirement is a new requirement.
4.

Duplication

We are not aware of duplication of this information.
5.

Effect on Small Entities

The risk assessment rules generally do not apply to small entities because a broker-dealer
that maintains less than $20 million in capital and does not carry customer accounts is exempted
under the rules. Further, a broker-dealer that either restricts its business to certain mutual fund
activities, certain direct participation programs or introduces accounts on a fully disclosed basis
is also exempt under the rules. In addition, a broker-dealer that is owned by a natural person is
exempt from the risk assessment rules under Section 17(h) of the Exchange Act.
6.

Consequences of Not Conducting Collection

The risk assessment rules enable the Commission to monitor the activities of a covered
broker-dealer’s affiliate whose business activities are reasonably likely to have a material impact
on the financial and operational condition of the broker-dealer. This information is collected
quarterly. If the information were to be collected less frequently, the Commission would have to
rely on stale and outdated information when assessing risks to the broker-dealer. As a result, the
Commission would be unable to adequately assess the potentially damaging impact of more
recent activities of the broker-dealer affiliates on the broker-dealer.
7.

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

There are no special circumstances. This collection is consistent with the guidelines in 5
CFR 1320.5(d)(2).

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8.

Consultations Outside the Agency

The required Federal Register notice with a 60-day comment period soliciting comments on
this collection of information was published. The Commission received one comment letter in
response to the 60-day notice. The comment letter supports the Commission’s recent extension of the
compliance date for the 2024 amendments and agrees with the collection of data in Inline XBRL
format. The comment letter does not discuss the estimated burdens for the collection of information,
and changes were not made to the estimated burdens in connection with the comment letter.5
9.

Payment or Gift

No payment or gift is provided to respondents.
10.

Confidentiality

All information obtained by the Commission pursuant to the provisions of Rules 17h-1T
and 17h-2T from a broker or dealer concerning a material associated person is deemed confidential
information for the purposes of section 24(b) of the Exchange Act.
11.

Sensitive Questions

This information collection does not collect personally identifiable information. The
agency has determined that neither a Privacy Impact Assessment (“PIA”) nor a System of
Records Notice (“SORN”) are required in connection with the collection of information.
12.

Information Collection Burden

Annual Recordkeeping Burden:
As of August 22, 2025, there are 238 respondents that must comply with Rules 17h-1T
and 17h-2T. Each of these 238 respondents are estimated to require 10 hours per year to
maintain the records required under Rule 17h-1T, for an aggregate estimated annual industry
recordkeeping burden of 2,380 hours (238 respondents X 10 hours). In addition, there are 238
broker-dealer respondents that must file quarterly and annual risk assessment reports with the
Commission under Rule 17h-2T. Each of these 238 respondents must make five annual
responses under Rule 17h-2T (for a total of 1,190 responses per year). These five responses are
estimated to require 14 hours per respondent per year, for an aggregate estimated annual
industry reporting burden of 3,332 hours (238 respondents X 14 hours).
In addition, new respondents must draft an organizational chart required under Rule 17h-1T
and establish a system for complying with the risk assessment rules. The staff estimates that
drafting the required organizational chart requires one hour and establishing a system for complying
with the rules requires three hours. Based on the modest increase in the number of new filers in
recent years, the staff estimates there will be three new respondents, and thus, a corresponding
5

Letter from Campbell Pryde, XBRL US, November 12, 2025.

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estimated initial (one-time) burden of twelve hours for new respondents (4 hours X 3 news
respondents = 12 hours), for an annualized total industry reporting burden of 4 hours (that is, a
one-time burden of 12 hours amortized over three years).
The three burden hour totals listed above for reporting, recordkeeping, and new respondents
are not a result of any new information collections or any substantive changes to existing
information collections adopted by the Commission but only result from changes in the number of
actual respondents (for recordkeeping and reporting) and prospective respondents (for estimated
new respondents).
2024 Rule Amendments (Rule 17h-2T: Form 17-H Inline XBRL Requirement)
As mentioned, the Commission recently adopted rule amendments to requiring brokerdealers subject to Rule 17h-2T to file Item 4 of Form 17-H in EDGAR in Inline XBRL. To be
clear, the Commission is not changing the substantive information required in Item 4 of Form
17-H but is only changing the format in which the Item 4 of Form 17-H is filed by requiring
EDGAR-filing in Inline XBRL. While the EDGAR-filing and Inline XBRL requirements are
new, broker-dealers subject to Rule 17h-2T have had the option to file Form 17-H in EDGAR
and almost all of them have been doing so. Under the rule amendments, broker-dealers that are
required to file reports under Rule 17h-2T are required to tag the financial statements included
with the report in Inline XBRL.
As broker-dealers that are required to file reports under Rule 17h-2T are also required to
file annual reports in EDGAR under Rule 17a-5, the Commission did not estimate an additional
burden for becoming familiar with the EDGAR system and for monitoring changes in EDGAR
filing requirements attributable to the amendments to Rule 17h-2T. Likewise, because these
broker-dealers also are required to tag annual reports under Rule 17a-5 in Inline XBRL, the
Inline XBRL requirement for reports under Rule 17h-12T represents additional (quarterly)
iterations of that compliance process, as abbreviated to reflect that Form 17-H requires only
financial statements (and not any supplemental 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
hour per response four times a year (quarterly) for 238 respondents, resulting in a total
industrywide burden of 1,904 hours6 per year for Form 17-H filers to structure their financial
statements (Item 4 of Form 17-H) in Inline XBRL.7
The hour burdens are summarized in the following chart:
Summary of Hourly Burdens
A.

B.

C.

D.

E.

F.

G.

6

(238 respondents X 8 hours = 1,904 hours.)

7

The Commission submitted revised burden estimates to OMB and they were approved on July 29, 2025.

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Name of
Information
Collection

Type of
Burden

Number
of
Entities
Impacted

Annual
Responses
per Entity

Initial
Burden
per
Entity
per
Response

Initial
Burden
Annualized
per Entity
per
Response

Ongoing
Burden
per
Entity
per
Response

[C ÷ 3
years]
Rule 17h-1T &
Rule 17h-2T
Rule 17h-2T
(quarterly risk
assessment
reports & annual
financial
statements)
Rule 17h-1T –
Initial Burden for
new respondents
(org chart &
compliance
program)
Requirement to
file Form 17-H in
Inline XBRL –
Ongoing Burden

Annual
Burden
Per
Entity per
Response

Total
Annual
Burden
Per Entity

Total
Industry
Burden

Small
Business
Entities
Affected

[ D + E]

[F * B]

[G * A]

[A * %]

Recordkeeping

238

1

0

0

10

10

10

2,380

0

Reporting

238

5

0

0

2.88

2.8

14

3,332

0

Reporting

39

1

4

1.33

0

1.33

1.33

4

0

Reporting

238

4

0

0

2

2

8

1,904

0

TOTAL HOURLY BURDEN FOR ALL RESPONDENTS

13.

7,620

Costs to Respondents

The total annual cost burden for Rules 17h-1T and 17h-2T is $0.
14.

Costs to Federal Government

The Commission is in the process of revising its methodologies to estimate annualized
costs to the Federal government for all its relevant collections of information. We anticipate that
future extensions of this collection of information will reflect the revised methodologies.
15.

Changes in Burden

The change in burden is a result of a decrease in the number of respondents from 241 to
238. As a result, the estimated total annual industry hourly burden changed from 7,716 to 7,620,
a decrease of 96 hours.
The estimated total annual hour burden has changed as follows:
Summary of Changes in Burden Hours

8

The 5 responses are estimated to take a combined total of 14 hours per year, therefore, to determine the
burden per response, we divided 14 by 5. (14 / 5 = 2.8.)

9

We are estimating a modest future increase in the number of broker-dealers—namely, 3 new respondents—
that would be subject to Rule 17h-1T.

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Name of Information

Annual Industry

Collection

Burden

Rule 17h-1T & 17h-2T
(Recordkeeping)
Rule 17h-2T (quarterly
risk assessment reports &
annual financial
statements)
Rule 17h-1T initial
burden for projected new
respondents
Requirement to file Form
17-H in Inline XBRL –
Ongoing Burden
Total Hourly Burden
Change for All
Respondents
TOTAL CHANGE

16.

Annual Industry
Burden Previously
Approved

Change in

Reason for Change

Burden

2,380

2,410

(30)

Decrease in number of respondents

3,332

3,374

(42)

Decrease in number of respondents

3

3

0

No change

1,904

1,928

(24)

Decrease in number of respondents

7,620

7,716

(96)

Decrease in number of respondents.

(96) hours

Information Collection Planned for Statistical Purposes

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

Approval to Omit OMB Expiration

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

Exceptions to Certification for Paperwork Reduction Act Submissions

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

COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS
The collection of information does not involve statistical methods.