Document ID: SEC-2005-0364-0001
Agency: sec
Document Type: Notice
Title: Securities Exchange Act : Broker-dealers; financial statement requirements
Posted Date: 2005-12-13T05:00Z

[Federal Register: December 13, 2005 (Volume 70, Number 238)]
[Notices]               
[Page 73809-73810]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13de05-85]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52909]

 
Extension of Order Regarding Broker-Dealer Financial Statement 
Requirements Under Section 17 of the Exchange Act

December 7, 2005.
    The Securities and Exchange Commission (``Commission'') is 
extending its Order, originally issued on August 4, 2003,\1\ and 
extended on July 14, 2004 (the ``2004 Order''),\2\ under section 17(e) 
of the Securities Exchange Act of 1934 (``Exchange Act''), regarding 
audits of financial statements of broker-dealers that are not issuers 
(``non-public broker-dealers''). The 2004 Order provided that non-
public broker-dealers may file with the Commission and may send to 
their customers documents and information required by section 17(e) 
certified by an independent public accountant, instead of by a 
registered public accounting firm, for fiscal years ending before 
January 1, 2006.
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    \1\ Exchange Act Release No. 48281, 68 FR 47375 (August 8, 
2003).
    \2\ Exchange Act Release No. 50020, 69 FR 43482 (July 20, 2004).
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    Section 17(e)(1)(A) of the Exchange Act requires that every 
registered broker-dealer annually file with the Commission a certified 
balance sheet and income statement, and section 17(e)(1)(B) requires 
that the broker-dealer annually send to its customers its ``certified 
balance sheet.'' \3\ The Sarbanes-Oxley Act of 2002 (``Act'') \4\ 
established the Public Company Accounting Oversight Board (``Board'') 
\5\ and amended Section 17(e) to replace the words ``an independent 
public accountant'' with ``a registered public accounting firm.'' \6\
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    \3\ Exchange Act Rule 17a-5 requires registered broker-dealers 
to provide to the Commission and to customers of the broker-dealer 
other specified financial information.
    \4\ Public Law 107-204.
    \5\ Section 101 of the Act.
    \6\ Section 205(c)(2) of the Act.
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    The Act establishes a deadline for registration with the Board of 
auditors of financial statements of ``issuers,'' as that term is 
defined in the Act.\7\ The Act does not provide a deadline for 
registration of auditors of non-public broker-dealers.
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    \7\ Section 2 of the Act defines ``issuer.'' Section 102 of the 
Act establishes a specific deadline by which auditors of issuers 
must register with the Board. Based on the statutory deadline of 180 
days after the Commission determined the Board was ready to carry 
out the requirements of the Act, that date was October 22, 2003. See 
Exchange Act Release No. 48180 (July 16, 2003).
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    The 2004 Order expires January 1, 2006. Application of registration 
requirements and procedures to auditors of non-public broker-dealers is 
still being considered. The Commission is also considering whether to 
issue a concept release on the subject. The Commission has therefore 
determined that extending the Order is consistent with the public 
interest and the protection of investors.
    Accordingly,
    It Is Ordered, pursuant to section 17(e) of the Exchange Act, that 
non-

[[Page 73810]]

public broker-dealers may file with the Commission a balance sheet and 
income statement and may send to their customers a balance sheet 
certified by an independent public accountant, instead of by a 
registered public accounting firm, for fiscal years ending before 
January 1, 2007.

    By the Commission.
Jonathan G. Katz,
Secretary.
 [FR Doc. E5-7264 Filed 12-12-05; 8:45 am]

BILLING CODE 8010-01-P