Document ID: SEC-2021-0830-0001
Agency: sec
Document Type: Rule
Title: Recordkeeping and Reporting Requirements for Security-Based Swap Dealers, Major Security-Based Swap Participants, and Broker-Dealers; Correction
Posted Date: 2021-06-11T04:00Z

[Federal Register Volume 86, Number 111 (Friday, June 11, 2021)]
[Rules and Regulations]
[Pages 31115-31117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11572]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 200, 240 and 249

[Release No. 34-87005B; File No. S7-05-14]
RIN 3235-AL45

Recordkeeping and Reporting Requirements for Security-Based Swap 
Dealers, Major Security-Based Swap Participants, and Broker-Dealers; 
Correction

AGENCY: Securities and Exchange Commission.

ACTION: Final rule; correcting amendment.

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SUMMARY: On September 19, 2019, the Securities and Exchange Commission 
(the ``Commission'') adopted recordkeeping, reporting, and notification 
requirements applicable to security-based swap dealers and major 
security-based swap participants, securities count requirements 
applicable to certain security-based swap dealers, and additional 
recordkeeping

[[Page 31116]]

requirements applicable to broker-dealers to account for their 
security-based swap and swap activities. Release 34-87005 (Sept. 19, 
2019) was published in the Federal Register on Dec. 16, 2019 ( ). This 
document corrects certain technical inaccuracies in that release.

DATES: Effective June 11, 2021.

FOR FURTHER INFORMATION CONTACT: Valentina Minak Deng, Special Counsel, 
at (202) 551-5778; Division of Trading and Markets, Securities and 
Exchange Commission, 100 F Street NE, Washington, DC 20549-7010.

SUPPLEMENTARY INFORMATION: We are making technical corrections to 17 
CFR 240.17a-4 and 17 CFR 240.17a-12 under the Securities Exchange Act 
of 1934, and Parts II and IIC of Form X-17A-5 (referenced in 17 CFR 
249.617). The release resulting in the technical inaccuracies was 
published in the Federal Register on December 16, 2019 [84 FR 68550], 
and adopted by the Commission in Exchange Act Release No. 87005 on 
September 19, 2019.

List of Subjects

17 CFR Part 240

    Administrative practice and procedure, Brokers, Confidential 
business information, Fraud, Reporting and recordkeeping requirements, 
Securities, Swaps.

17 CFR Part 249

    Brokers, Recordkeeping and reporting requirements, Securities.

    Accordingly, 17 CFR parts 240 and 249 are corrected by making the 
following correcting amendments:

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 
1934

0
1. The authority citation for part 240 continues to read, in part, 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, 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, and 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.
* * * * *
    Section 240.17a-14 is also issued under Public Law 111-203, sec. 
913, 124 Stat. 1376 (2010).
* * * * *

0
2. Amend Sec.  240.17a-4 by revising paragraphs (a) and (l) to read as 
follows:

Sec.  240.17a-4   Records to be preserved by certain exchange members, 
brokers and dealers.

* * * * *
    (a) Every member, broker or dealer subject to Sec.  240.17a-3 must 
preserve for a period of not less than 6 years, the first two years in 
an easily accessible place, all records required to be made pursuant to 
Sec.  240.17a-3(a)(1) through (3), (5), and (21) and (22), and 
analogous records created pursuant to Sec.  240.17a-3(e).
* * * * *
    (l) Records for the most recent two year period required to be made 
pursuant to Sec.  240.17a-3(f) and paragraphs (b)(4) and (e)(7) of this 
section which relate to an office shall be maintained at the office to 
which they relate. If an office is a private residence where only one 
associated person (or multiple associated persons who reside at that 
location and are members of the same immediate family) regularly 
conducts business, and it is not held out to the public as an office 
nor are funds or securities of any customer of the member, broker or 
dealer handled there, the member, broker or dealer need not maintain 
records at that office, but the records must be maintained at another 
location within the same State as the member, broker or dealer may 
select. Rather than maintain the records at each office, the member, 
broker or dealer may choose to produce the records promptly at the 
request of a representative of a securities regulatory authority at the 
office to which they relate or at another location agreed to by the 
representative.
* * * * *

0
3. Amend Sec.  240.17a-12 by revising paragraph (i)(2) to read as 
follows:

Sec.  240.17a-12   Reports to be made by certain OTC derivatives 
dealers.

* * * * *
    (i) * * *
    (2) If, during the course of the audit or interim work, the 
certified public accountant determines that any material inadequacies 
exist in the accounting system, internal accounting controls, 
procedures for safeguarding securities, or as otherwise defined in 
paragraph (h)(2) of this section, then the certified public accountant 
shall call it to the attention of the chief financial officer of the 
OTC derivatives dealer, who shall inform the Commission by telegraphic 
or facsimile notice within 24 hours thereafter as set forth in Sec.  
240.17a-11. The OTC derivatives dealer shall also furnish the certified 
public accountant with a copy of said notice to the Commission by 
telegram or facsimile within the same 24 hour period. If the certified 
public accountant fails to receive such notice from the OTC derivatives 
dealer within that 24 hour period, or if the certified public 
accountant disagrees with the statements contained in the notice of the 
OTC derivatives dealer, the certified public accountant shall inform 
the Commission by report of material inadequacy within 24 hours 
thereafter as set forth in Sec.  240.17a-11. Such report from the 
certified public accountant shall, if the OTC derivatives dealer failed 
to file a notice, describe any material inadequacies found to exist. If 
the OTC derivatives dealer filed a notice, the certified public 
accountant shall file a report detailing the aspects, if any, of the 
OTC derivatives dealer's notice with which the certified public 
accountant does not agree.
* * * * *

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

0
4. 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. 313 (2012), and Sec. 72001, 
Pub. L. 114-94, 129 Stat. 1312 (2015), 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).
* * * * *

    Note:  The text of Part II of Form X-17A-5 does not, and this 
amendment will not, appear in the Code of Federal Regulations.

0
5. Amend Part II of Form X-17A-5 (referenced in Sec.  249.617 of this 
chapter) by:
0
a. Removing ``10. Market risk exposure--for Basel 2.5 firms (sum of 
Lines 10E, 10H, 10I, 10J, 10K, 10L, 10N, and 10O)
[GRAPHIC] [TIFF OMITTED] TR11JN21.001

and adding in its place ``10. Market risk exposure--for Basel 2.5 firms 
(sum of Lines 10E, 10H, 10I, 10J, 10K, 10L, 10M, 10N, and 10O)
[GRAPHIC] [TIFF OMITTED] TR11JN21.002

0
b. Removing ``Total aggregate indebtedness liabilities from Statement 
of Financial Condition (Item 1760)'' and adding in its place ``Total 
aggregate indebtedness liabilities from Statement of Financial 
Condition (Item 1230)''.

[[Page 31117]]

0
c. Adding ``For the period (MMDDYY) from
[GRAPHIC] [TIFF OMITTED] TR11JN21.003

and ``Number of months included in this statement
[GRAPHIC] [TIFF OMITTED] TR11JN21.004

in the ``Statement of Income (Loss) or Statement of Comprehensive 
Income, As Applicable'' section in a new line immediately preceding the 
line reading ``REVENUE''.
0
d. Removing ``B. Additions (including non-conforming capital of $
[GRAPHIC] [TIFF OMITTED] TR11JN21.005

and adding in its place ``B. Additions (including non-conforming 
capital of $
[GRAPHIC] [TIFF OMITTED] TR11JN21.006

0
e. Removing ``(k)(1)--$2,500 capital category as per Rule 15c3-3'' and 
adding in its place ``(k)(1)--Limited business (mutual funds and/or 
variable annuities only)'' in the ``Claiming an Exemption from Rule 
15c3-3'' section.
0
f. Removing ``3. Other accrued withdrawals'' and adding in its place 
``3. Other anticipated withdrawals'' in the ``Other Capital 
Withdrawals--Recap'' section.
0
g. In the ``Computation of CFTC Minimum Capital Requirements'' section, 
removing
    ``v. Enter the sum of Lines A.ii and A.iv. . . . . ___
    [GRAPHIC] [TIFF OMITTED] TR11JN21.007
    
 and adding in its place:
    ``v. Amount of uncleared swap margin. . . . . $___
    [GRAPHIC] [TIFF OMITTED] TR11JN21.008
    
    vi. If the FCM is also registered as a swap dealer, enter 2% of 
Line A.v. . . . . $___
[GRAPHIC] [TIFF OMITTED] TR11JN21.009

    vii. Enter the sum of Lines A.ii, A.iv, and A.vi. . . . . $___
    [GRAPHIC] [TIFF OMITTED] TR11JN21.010
    

    Note:  The text of Part IIC of Form X-17A-5 does not, and this 
amendment will not, appear in the Code of Federal Regulations.

0
6. Amend Part IIC of Form X-17A-5 (referenced in Sec.  249.617 of this 
chapter) by:
0
a. Removing
[GRAPHIC] [TIFF OMITTED] TR11JN21.011

in Lines 13.B., 13.B.1. and 13.B.2. of the Balance Sheet section and 
adding in its place
[GRAPHIC] [TIFF OMITTED] TR11JN21.012

respectively.
    b. Removing
    [GRAPHIC] [TIFF OMITTED] TR11JN21.013
    
in Lines 9 and 10 of Column B the Regulatory Capital section and adding 
in its place
[GRAPHIC] [TIFF OMITTED] TR11JN21.014

respectively.

    Dated: May 27, 2021.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2021-11572 Filed 6-10-21; 8:45 am]
BILLING CODE 8011-01-P