Federal Register / Vol. 77, No. 80 / Wednesday, April 25, 2012 / Notices 24747 

Office of Management and Budget for 

extension and approval. 

In response to an operational crisis in 

the securities industry between 1967 

and 1970, the Commission adopted Rule 

17a–11 (17 CFR 240.17a–11) under the 

Exchange Act on July 11, 1971. The 

Rule requires broker-dealers that are 

experiencing financial or operational 

difficulties to provide notice to the 

Commission, the broker-dealer’s 

designated examining authority 

(‘‘DEA’’), and the Commodity Futures 

Trading Commission (‘‘CFTC’’) if the 

broker-dealer is registered with the 

CFTC as a futures commission 

merchant. Rule 17a–11 is an integral 

part of the Commission’s financial 

responsibility program which enables 

the Commission, a broker-dealer’s DEA, 

and the CFTC to increase surveillance of 

a broker-dealer experiencing difficulties 

and to obtain any additional 

information necessary to gauge the 

broker-dealer’s financial or operational 

condition. 

Rule 17a–11 also requires over-thecounter (‘‘OTC’’) derivatives dealers and 

broker-dealers that are permitted to 

compute net capital pursuant to 

Appendix E to Exchange Act Rule 15c3– 

1 to notify the Commission when their 

tentative net capital drops below certain 

levels. OTC derivatives dealers must 

also provide notice to the Commission 

of backtesting exceptions identified 

pursuant to Appendix F of Rule 15c3– 

1 (17 CFR 15c3–1f). 

Compliance with the Rule is 

mandatory. The Commission will 

generally not publish or make available 

to any person notices or reports received 

pursuant to Rule 17a–11. The 

Commission believes that information 

obtained under Rule 17a–11 relates to a 

condition report prepared for the use of 

the Commission, other federal 

governmental authorities, and securities 

industry self-regulatory organizations 

responsible for the regulation or 

supervision of financial institutions. 

Only broker-dealers whose capital 

declines below certain specified levels 

or who are otherwise experiencing 

financial or operational problems have a 

reporting burden under Rule 17a–11. In 

2011, the Commission received 

approximately 465 notices under this 

Rule, including one notice from an OTC 

derivatives dealer permitted to compute 

net capital pursuant to Appendix E to 

Exchange Act Rule 15c3–1. 

Each broker-dealer reporting pursuant 

to Rule 17a–11 will spend 

approximately one hour preparing and 

transmitting the notice required by the 

rule. Accordingly, the total estimated 

annualized burden under Rule 17a–11 is 

465 hours. 

Written comments are invited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission’s 

estimate of the burden of the proposed 

collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information on respondents; and 

(d) ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days of this 

publication. 

The Commission may not conduct or 

sponsor a collection of information 

unless it displays a current valid control 

number. No person shall be subject to 

any penalty for failing to comply with 

a collection of information subject to the 

PRA that does not display a valid Office 

of Management and Budget (OMB) 

control number. 

Please direct your written comments 

to: Thomas Bayer, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Remi PavlikSimon, 6432 General Green Way, 

Alexandria, VA 22312 or send an email 

to: PRA_Mailbox@sec.gov. 

Dated: April 19, 2012. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2012–9938 Filed 4–24–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Proposed Extension of Existing 

Collection; Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investor 

Education and Advocacy, 

Washington, DC 20549–0213. 

Extension: 

Rule 17a–6; OMB Control No. 3235–0489; 

SEC File No. 270–433. 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

Rule 17a–6 (17 CFR 240.17a–6) under 

the Securities Exchange Act of 1934 (15 

U.S.C. 78a et seq.) permits national 

securities exchanges, national securities 

associations, registered clearing 

agencies, and the Municipal Securities 

Rulemaking Board (‘‘MSRB’’) 

(collectively, ‘‘SROs’’) to destroy or 

convert to microfilm or other recording 

media records maintained under Rule 

17a–1, if they have filed a record 

destruction plan with the Commission 

and the Commission has declared such 

plan effective. 

There are currently 26 SROs: 15 

national securities exchanges, 1 national 

securities association, the MSRB, and 9 

registered clearing agencies. Of the 26 

SROs, 2 SRO respondents have filed a 

record destruction plan with the 

Commission. The staff calculates that 

the preparation and filing of a new 

record destruction plan should take 160 

hours. Further, any existing SRO record 

destruction plans may require revision, 

over time, in response to, for example, 

changes in document retention 

technology, which the Commission 

estimates will take much less than the 

160 hours estimated for a new plan. 

Thus, the total annual compliance 

burden is estimated to be 60 hours per 

year. The approximate cost per hour is 

$305, resulting in a total cost of 

compliance for these respondents of 

$18,300 per year (30 hours @ $305 per 

hour). 

Written comments are invited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission ’s 

estimate of the burden of the collection 

of information; (c) ways to enhance the 

quality, utility, and clarity of the 

information to be collected; and (d) 

ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days of this 

publication. 

The Commission may not conduct or 

sponsor a collection of information 

unless it displays a currently valid 

control number. No person shall be 

subject to any penalty for failing to 

comply with a collection of information 

subject to the PRA that does not display 

a valid Office of Management and 

Budget (OMB) control number. 

Comments should be directed to 

Thomas Bayer, Director/Chief 

Information Officer, Securities and 


pmangrum on DSK3VPTVN1PROD with NOTICES
24748 Federal Register / Vol. 77, No. 80 / Wednesday, April 25, 2012 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 66577 

(March 12, 2012), 77 FR 15827 (March 16, 2012) 

(‘‘Notice’’). 

4See Securities Exchange Act Release No. 60726 

(September 28, 2009), 74 FR 50991 (October 2, 

2009) (approving SR–FINRA–2009–010). 

5See Securities Exchange Act Release No. 61566 

(February 22, 2010), 75 FR 9262 (March 1, 2010) 

(approving SR–FINRA–2009–065). The term ‘‘Asset 

Backed Security’’ is defined in FINRA Rule 

6710(m). 

6See FINRA Rules 6710(m), (u), and (v). 

7See Notice, 77 FR at 15827–28. 

8See Notice, 77 FR at 15828. 

9See Notice, 77 FR at 15828 n.7. 

10See Notice, 77 FR at 15828, 15830. 

11See proposed Rule 6730(a)(3)(D)(i)b. 

Exceptions for transactions that are executed within 

45 minutes of the close of the TRACE system and 

for transactions executed when it is closed are set 

forth in subparts a., c., and d. of proposed Rule 

6730(a)(3)(D)(i). The term ‘‘Time of Execution’’ is 

defined in Rule 6710(d). 

12See proposed Rule 6730(a)(3)(D)(ii), which 

incorporates by reference Rule 6730(a)(1). Rule 

6730(a)(1) requires that transactions in TRACEEligible Securities be reported within 15 minutes of 

the Time of Execution, and also provides 

exceptions for transactions in TRACE-Eligible 

Securities that are executed shortly before the 

TRACE system closes and when it is closed. 

13See proposed Rule 6730(a)(3)(E)(i)b. Exceptions 

for transactions that are executed within two hours 

of the close of the TRACE system and for 

transactions executed when it is closed are set forth 

in subparts a., c., and d. of proposed Rule 

6730(a)(3)(E)(i). 

14See proposed Rule 6730(a)(3)(E)(ii)b. 

Exceptions for transactions that are executed within 

one hour of the close of the TRACE system and for 

transactions executed when it is closed are set forth 

in subparts a., c., and d. of proposed Rule 

6730(a)(3)(E)(ii). 

Exchange Commission, c/o Remi PavlikSimon, 6432 General Green Way, 

Alexandria, VA 22312 or send an email 

to PRA_Mailbox@sec.gov. 

Dated: April 19, 2012. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2012–9937 Filed 4–24–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66829; File No. SR–FINRA– 

2012–020] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Granting 

Approval of Proposed Rule Change 

Relating to Post-Trade Transparency 

for Agency Pass-Through MortgageBacked Securities Traded TBA 

April 18, 2012. 

I. Introduction 

On March 1, 2012, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a 

proposed rule change relating to posttrade transparency for Agency PassThrough Mortgage-Backed Securities 

(‘‘MBS’’) traded ‘‘to be announced’’ or 

‘‘TBA.’’ The proposed rule change was 

published for comment in the Federal 

Register on March 16, 2012.3 The 

Commission received no comments on 

the proposal. This order approves the 

proposed rule change. 

II. Description of the Proposal 

FINRA utilizes the Trade Reporting 

and Compliance Engine (‘‘TRACE’’) to 

collect from its members and publicly 

disseminate information on secondary 

over-the-counter transactions in 

corporate debt securities and Agency 

Debt Securities and certain primary 

market transactions.4 FINRA also 

utilizes TRACE to collect information 

on transactions in Asset-Backed 

Securities, but FINRA currently does 

not disseminate such information 

publicly.5 Agency Pass-Through 

Mortgage-Backed Securities traded TBA 

(‘‘MBS TBA’’) are a specific type of 

Asset-Backed Security.6 FINRA has 

proposed to amend its rules to reduce 

the reporting timeframe for and to 

provide for public dissemination of 

MBS TBA transactions, and to make 

certain other changes. 

Good Delivery and Not Good Delivery 

MBS TBA Transactions 

FINRA has proposed to amend the 

definition of TBA set forth in Rule 

6710(u) to identify two subsets of MBS 

TBA transactions: MBS TBA 

transactions ‘‘for good delivery’’ (‘‘MBS 

TBA Good Delivery’’) and MBS TBA 

transactions ‘‘not for good delivery’’ 

(‘‘MBS TBA Not Good Delivery’’). MBS 

TBA Good Delivery meet certain market 

standards and conventions, known 

generally as ‘‘good delivery guidelines;’’ 

MBS TBA Not Good Delivery do not 

meet those guidelines.7 Most newly 

issued MBS TBA are MBS TBA Good 

Delivery, and are composed primarily of 

standard loans such as 15- and 30-year 

fixed-rate single-family loans.8 Newly 

issued MBS TBA Not Good Delivery, on 

the other hand, include primarily nonstandard loans, such as interest-only 

mortgages, project/construction loans, 

and certain non-conforming mortgages 

on single family residences.9 According 

to FINRA, MBS TBA Good Delivery are 

the most liquid and account for the vast 

majority of MBS TBA transactions.10

Reduction of Reporting Period 

FINRA also has proposed to amend 

Rule 6730 to reduce the period for 

reporting MBS TBA transactions to 

TRACE. The reduction would occur in 

two stages for both MBS TBA Good 

Delivery and MBS TBA Not Good 

Delivery transactions, but the reduced 

reporting period for each type of MBS 

TBA transaction would be different. 

With respect to MBS TBA Good 

Delivery transactions, first, for a pilot 

program of approximately 180 days 

duration, FINRA has proposed to reduce 

the reporting period from no later than 

the close of the TRACE system on the 

date of execution to no later than 45 

minutes from the Time of Execution.11

Second, after approximately 180 days, 

the pilot program would expire and the 

reporting period would be reduced from 

no later than 45 minutes from the Time 

of Execution to no later than 15 minutes 

from the Time of Execution.12

With respect to MBS TBA Not Good 

Delivery transactions, first, for a pilot 

program of approximately 180 days 

duration, FINRA has proposed to reduce 

the reporting period from no later than 

the close of the TRACE system on the 

date of execution to no later than two 

hours from the Time of Execution.13

Second, after approximately 180 days, 

the pilot program would expire and the 

reporting period would be reduced from 

no later than two hours from the Time 

of Execution to no later than one hour 

from the Time of Execution.14

Dissemination of MBS TBA Transaction 

Information 

FINRA Rule 6750(b)(4) currently 

provides that transactions in AssetBacked Securities are not subject to 

dissemination. The proposal would 

amend Rule 6750(b)(4) to provide for 

dissemination of information on MBS 

TBA transactions immediately upon 

receipt of the transaction report. 

Specifically, FINRA has proposed to 

amend Rule 6750(b)(4) to provide that 

FINRA will not disseminate information 

on a transaction in an Asset-Backed 

Security, except an MBS TBA 

transaction. As a result of this proposed 

change and the reduced reporting 

periods that FINRA has proposed for 

MBS TBA transactions, information on 

MBS TBA Good Delivery and MBS TBA 

Not Good Delivery transactions would 

be disseminated within 45 minutes and 

two hours, respectively, of the Time of 

Execution during the pilot period. After 

the pilot period expires, information on 

MBS TBA Good Delivery and MBS TBA 

Not Good Delivery transactions would 

be disseminated within 15 minutes and 


pmangrum on DSK3VPTVN1PROD with NOTICES