\91\ See Exchange Act Rule 15Aj-1(c), 17 CFR 240.15Aj-1(c).
These filings are 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, by-laws, rules, and related documents of
the association, once every three years.
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2. Current Requirements for Filing Forms X-15AA-1, X-15AJ-1, and X-
15AJ-2
    An applicant for registration as a national securities association
is required to file a registration statement and exhibits with the
Commission on Form X-15AA-1 in triplicate.\92\ Every association
applying for registration or registered as a national securities
association is 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 must be made in triplicate, at least one copy of
which must be signed and attested in the same manner as required in the
case of the original registration statement.\93\ Every association
applying for registration or registered as a national securities
association is required to file Form X-15AJ-2 with the Commission
promptly after March 1 of each year.\94\
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    \92\ See 17 CFR 240.15Aa-1.
    \93\ See 17 CFR 240.15Aj-1.
    \94\ See 17 CFR 240.15Aj-1(c).
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    Currently, the information collected by these forms is
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; \95\ Form X-15AJ-1, for filing any
amendments or supplements to the registration statement, requests no
information beyond that requested by Form X-15AA-1; \96\ 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 currently
is not required by Form X-15AA-1.\97\
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    \95\ See 17 CFR 249.801.
    \96\ 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 to
which the applicant or reporting association is affiliated. In
addition, Form X-15AA-1 asks the applicant to state its reasons for
believing that such affiliation will be granted. Form X-15AA-1 also
requires the applicant to estimate the annual dollar volume of
transactions effected by members of the applicant association.
    \97\ See 17 CFR 249.803. Form 15A would require the inclusion of
the date of the filing. Capturing the date (in a structured manner)
would 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)).
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3. Proposed Requirements To Electronically File on Form 15A Information
Currently Filed on Forms X-15AA-1, X-15AJ-1, and X-15AJ-2
a. Proposed Amendments to Rules 15Aa-1 and 15Aj-1
    As discussed in detail below, the Commission proposes to amend Rule
15Aa-1 and redesignate it as Rule 15aa-1,\98\ redesignate Rule 15Aj-1
\99\ as Rule 15aa-2, redesignate Form X-15AA-1 as Form 15A, amend the
instructions to proposed Form 15A, and repeal Forms X-15AJ-1 and X-
15AJ-2 in connection with the Commission's proposal to require
applicants and national securities associations to electronically file
on a duly executed Form 15A the information currently filed on Forms X-
15AA-1, X-15AJ-1, and X-15AJ-2. As stated above in the introduction to
this section II, the Commission believes that, among other benefits,
its proposal to revise the forms relating to registration as a national
securities association should increase efficiencies and decrease costs
incurred by applicants for registration as a national securities
association and by national securities associations.\100\ In addition,
the proposal should facilitate Commission review of the information to
be provided on proposed Form 15A.
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    \98\ See 17 CFR 240.15Aa-1.
    \99\ See 17 CFR 240.15Aj-1.
    \100\ See supra section II.
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    To facilitate electronic filing of proposed Form 15A, the
Commission is proposing to amend Rule 15Aa-1 to require electronic
filing. The proposed amendments to Rule 15Aa-1 would require that
filing 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 proposed amendments to Rule 15Aa-1 would align the
electronic filings requirements with changes being proposed under Rule
6a-1 (regarding Form 1 submissions) as well as the proposed amendments
to Rule 17ab2-1, which would set forth the proposed electronic filing
requirements for Form CA-1 submissions.\101\ As stated above,

the Commission further proposes to redesignate Rule 15Aj-1 \102\ as
Rule 15aa-2.
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    \101\ See also proposed amendments to Rule 6a-4.
    \102\ See 17 CFR 240.15Aj-1. The proposed amendments to Rule
15Aj-1 would include updated references to relevant forms as well as
updates to take into account electronic filing.
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b. Proposed Form 15A
    The Commission proposes to redesignate Form X-15AA-1 as Form 15A
and to incorporate in proposed 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. The Commission proposes that 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, which would make it easier for
respondents to comply with the filing requirements. Furthermore,
exhibits would be required to be electronically uploaded to EDGAR. The
Commission believes that, among other benefits as detailed in the
Economic Analysis,\103\ the proposal should 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 would be captured
entirely on proposed Form 15A, the Commission also proposes to repeal
Forms X-15AJ-1 and X-15AJ-2.\104\
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    \103\ See infra Section X.C.1 (discussing benefits such as
reducing the risk that non-electronic submissions are delayed or
increasing the ability to run comparisons across reporting periods).
    \104\ 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) (File No. S7-
39-04). The Commission did not adopt any final rule based on that
proposal.
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    Proposed Form 15A would contain eleven sections. Preceding Section
I of proposed Form 15A, the proposed form would contain prompts that
would require the association to note the basis for submitting the
form. The prompts would indicate whether the submission is an initial
application filed pursuant to Rule 15aa-1 or an amendment or
supplement--which currently would be filed on Form X-15AJ-1 or X-15AJ-
2, respectively--pursuant to proposed Rule 15aa-2. Section I would be
titled ``Organization,'' and it would solicit 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 proposed Form 15A, the
association could provide a certification that the information can be
obtained in a publication.\105\ The information solicited in Section I
would be the same as that solicited in Items 1 through 6 on current
Form X-15AA-1.
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    \105\ See proposed 17 CFR 240.15aa-2(c)(1)(ii)(A).
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    Section I also would require the association to attach Exhibits A
through D. Exhibit A would require the association to attach copies of
its corporate governance documents (e.g., constitution, by-laws), or in
lieu of filing such documents, the association could provide a
certification that the information may be obtained in a publication
\106\ or that the information is kept up to date and available to the
Commission and the public upon request.\107\ Exhibit A of proposed Form
15A would solicit the same information as Exhibit A of current Form X-
15AA-1 but would reflect additional ways that the association could
satisfy its filing obligation. Exhibit B would require 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 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 proposed Form 15A would solicit the same information as Exhibit B of
current Form X-15AA-1. Exhibit C would require 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 would be 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.\108\
Exhibit C of proposed Form 15A would solicit the same information as
Exhibit C of current Form X-15AA-1, and would add 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 proposed
Form 15A would solicit 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 proposed Rule 15aa-2(d)(2).
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    \106\ See id.
    \107\ See proposed 17 CFR 240.15aa-2(c)(1)(ii)(B).
    \108\ See proposed 17 CFR 240.15aa-2(b)(3).
---------------------------------------------------------------------------

    Sections II through IX of proposed Form 15A would solicit
information about specific association rules and other information that
is currently solicited on Form X-15AA-1. Section II would be titled
``Membership'' and require the association to cite the specific rule(s)
of the association addressing membership requirements, such as any rule
restricting membership. Section II would pose the same questions about
the association's membership rules as Items 7 through 10 of current
Form X-15AA-1. Section III would be titled ``Representation of
Membership'' and require 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 would be titled ``Dues and Expenses'' and require the
association to cite the specific rule(s) of the association that
provides for the equitable allocation of dues among its members to
defray reasonable expenses of administration, which information is
currently solicited in Item 12 of Form X-15AA-1.
    Section V would be titled ``Business Conduct and Protection of
Members.'' This section would require 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 would solicit 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 would pose the
same questions about business conduct and the protection of members as
Items 13 through 23 of current Form X-15AA-1.
    Section VI would be titled ``Disciplining of Members'' and would
require the association to cite the specific rule(s) of the association
that addresses member discipline. Section VI would pose the same
questions about member discipline as Items 24 and 25 of current Form X-
15AA-1. Section VII would be titled ``Affiliated Associations'' and
would require the association to cite the specific rule(s) of the
association that provide for the admission of registered affiliated
securities associations. Section VII would pose the same question as
Item 26 of current Form X-15AA-1. Section VIII would be titled
``Miscellaneous'' and require 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 proposed Form 15A would pose the same
questions as Items 27 and 28 of current Form X-15AA-1. Section IX would
be titled ``Additional Information for Registration as an Affiliated
Securities Association'' and would apply only to applications submitted
for registration as an affiliated securities association. Section IX
would require 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 proposed Form 15A would pose the same
questions as Items 29 and 30 of current Form X-15AA-1.
    Section X would require the association to provide the contact
information for its contact employee, and Section XI would provide the
signature block and attestation. Consistent with the proposed
amendments to Form 1, Form 1-N, and Form CA-1, the entity filing the
proposed Form 15A would consent 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 would also require 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 proposes to amend the instructions for
proposed Form 15A to include general directions for preparing and
filing the form, describe the seven types of submissions that may be
made under proposed Rules 15aa-1 and 15aa-2, and set forth the items,
exhibits, and schedules required to be filed for each type of
submission.
    Finally, proposed Form 15A would require the execution page to be
filed in a custom XML data language specific to Form 15A. As with the
other Covered SRO Forms, filers would be able to input their execution
page disclosures into a fillable web form that EDGAR would subsequently
convert to custom XML. The Commission believes structuring the
execution page in custom XML would 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 Form 15A
would not be 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.\109\
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    \109\ See infra Section IX.C.4.
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4. Request for Comment
    15. The Commission requests comment on all aspects of the proposed
revisions to Form 15A to facilitate electronic filing in EDGAR. Are
there any aspects of transitioning the form to electronic filing that
the Commission has not addressed above? Please explain.
    16. Do commenters agree with the Commission's belief that the
proposed amendments would increase efficiencies and decrease costs
compared to current requirements?
    17. Do commenters agree that the additional ways that the
association could satisfy its filing obligations under the rule would
be beneficial? Are there additional methods of satisfying the filing
obligation that the Commission should adopt?
    18. Do commenters agree with the Commission's belief that
structuring the execution page in custom XML would improve the ability
to sort, filter, and otherwise organize Form 15A filings without
creating significant additional burden on filers?
    19. Should the Commission require structuring other portions of
Form 15A (or the entirety of Form 15A) rather than only structuring the
execution page? Please explain why or why not. If so, which structured
data language or languages should be used for structuring the other
portions of Form 15A?

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.\110\ Section 17A(b)(2) of the Exchange Act
\111\ 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 Exchange Act \112\ 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. The Commission adopted Rule 17ab2-1 \113\ and Form CA-
1,\114\ 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.
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    \110\ See 15 U.S.C. 78q-1.
    \111\ See 15 U.S.C. 78q-1(b)(2).
    \112\ See 15 U.S.C. 78s(a).
    \113\ See 17 CFR 240.17ab2-1.
    \114\ See 17 CFR 249b.200.
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2. Current Requirements for Filing Form CA-1
    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.\115\ 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. The instructions to Form CA-1 require that an applicant clearing
agency file four completed copies of Form CA-1 with the
Commission.\116\
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    \115\ See 17 CFR 240.17ab2-1(a).
    \116\ See 17 CFR 249b.200.
---------------------------------------------------------------------------

    Rule 17ab2-1(e) requires that if responses to items 1-3 of Form CA-
1 become inaccurate, misleading or incomplete, the registrant shall
promptly file an amendment on Form CA-1 to correct the inaccurate,
misleading or incomplete information.\117\ The execution page of Form
CA-1 further states that, by submitting Form CA-1 along with any
schedules, exhibits, and attachments thereto, the registrant and the
person executing for the registrant represents that all information
contained in Form CA-1 is true, current, and complete, and that
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.\118\ Further, in accordance with the instructions to Form
CA-1, 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.\119\
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    \117\ See 17 CFR 240.17ab2-1(e).
    \118\ See 17 CFR 249b.200.
    \119\ See id.
---------------------------------------------------------------------------

3. Proposed Requirement To Electronically File Form CA-1
    The Commission is proposing to revise 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 proposed revisions therefore would
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 Commission believes that the proposed rule and form revisions
should 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.\120\ In addition, while exempt clearing agencies
are not subject to the SRO rule filing process under section 19(b) of
the Exchange Act,\121\ certain exempt clearing agencies are currently
subject to electronic filing requirements under Regulation SCI,\122\
and so the electronic filing of Form CA-1 and amendments thereto would
not conflict with existing requirements for these entities under
Regulation SCI, and therefore would simplify the process into only
electronic filing procedures, rather than a mix of electronic and paper
filing procedures.
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    \120\ See supra section I.B.
    \121\ See 15 U.S.C. 78s(a) and (b).
    \122\ 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).
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4. Proposed Amendments to Rule 17ab2-1
    To facilitate electronic filing of Form CA-1, the Commission is
proposing to revise Rule 17ab2-1 to require electronic filing.
Specifically, the Commission is proposing to revise 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 or series of letters or characters comprising
a name, executed, adopted or authorized as a signature). Additionally,
new paragraph (g) would specify 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 would also specify
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, the Commission believes that, among other benefits, its proposal to
revise the forms relating to registration as a clearing agency should
increase efficiencies and decrease costs incurred by applicants for
registration as a clearing agency.
5. Proposed Amendments to Form CA-1 and the Form CA-1 Instructions
    The Commission proposes that electronic Form CA-1 would solicit
information through prompts on the form that would better structure the
information collected. In addition, the Commission proposes that
electronic Form CA-1 would require exhibits to be attached through a
new exhibit table that would be part of electronic Form CA-1. The
Commission further proposes that 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. The Commission
proposes to add prompts prior to Section I of the form that would
require the registrant to note the basis for submitting Form CA-1.
Specifically, proposed electronic Form CA-1 would require 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 \123\ 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 the date the extension
expires; \124\ (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 believes that requiring a registrant to
indicate the type of filing would 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.
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    \123\ If the registrant is applying for registration as a
clearing agency, the proposed changes to Form CA-1 would 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.
    \124\ See 15 U.S.C. 78s(a)(1)(B).
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    The Commission also proposes to modify Form CA-1 to add a
requirement for information about a contact employee. The proposed Form
CA-1 would require the name, title, email address and telephone number
of an employee prepared to respond to questions about the Form CA-1
submission. The Commission believes that including information about a
contact employee would facilitate communication between the registrant
and the Commission. Similarly, the Commission proposes to require the
email address of the person in charge of the registrant's clearing
agency activities. The Commission believes that obtaining that
individual's email address would also facilitate communication between
the registrant and the Commission.
    In addition, the proposed Form CA-1 would require 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.\125\
There are also sections in the proposed form that may be applicable to
only certain 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, the proposed Form CA-1 would preserve 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 proposing 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.
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    \125\ Sections III through VII of proposed Form CA-1 would
consist of exhibits relating to General Information, Business
Organization, Financial Information, Operational Capacity, and
Access to Services, respectively.
---------------------------------------------------------------------------

    The Commission also is proposing to omit 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 Rule
17ab2-1(b) that has since expired--to perform the functions of a
clearing agency unless registered or exempt.\126\ 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 information on
potential exposures to the clearing agency as of September 30, 1975, is
stale data. Accordingly, the Commission believes that it is no longer
necessary to include item 7(b) on Form CA-1.
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    \126\ Rule 17ab2-1(b) 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).
---------------------------------------------------------------------------

    The Commission also is proposing to revise the instructions to Form
CA-1 to facilitate the electronic filing of Form CA-1. The proposed
form instructions would 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 proposed instructions would 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
proposed date-of-filing provision to be added to Rule 17ab2-1, which
would provide 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, the Commission
believes it would not be relevant to the proposed electronic filing
process. The Commission believes that requiring a registered or exempt
clearing agency to electronically file a full exhibit would help
facilitate the performance of the Commission's regulatory functions
because the Commission would be 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, non-consecutive
pages are being amended. The proposed Inline XBRL requirement for
certain Form CA-1 exhibits would further facilitate this comparison
process, because Inline XBRL would allow 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 proposes to delete the reference to
pagination that is currently in Item III, paragraph 13.
    In addition, Form CA-1 and the instructions to Form CA-1 would
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 current 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.\127\
---------------------------------------------------------------------------

    \127\ The provision allowing for service of any civil action
pursuant to confirmed telegram would be deleted.
---------------------------------------------------------------------------

    Finally, Form CA-1 would require 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, by-laws,
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) would also 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, by-laws, rules,
procedures, and instruments corresponding thereto), G (copies of
contracts with exchanges, national securities associations, and
securities markets), P (copies of contracts governing subscription
terms), and T (submissions to the Commission required as directed in
any approval order) would be filed as unstructured PDF documents.

           Proposed Structured Data Requirements for Form CA-1
------------------------------------------------------------------------

------------------------------------------------------------------------
Inline XBRL...............................  Schedule A, Exhibits C, F,
                                             H, J, K, L, M, O, R, S.
Custom XML................................  Execution page, Exhibits A
                                             (in part), B, D, E (in
                                             part), I, N, Q.
Unstructured PDF..........................  Exhibits A (in part), E (in
                                             part), G, P, T.
------------------------------------------------------------------------

    The Commission believes the proposed structuring requirements would
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 could
benefit market participants through enhanced oversight of clearing
agencies. Market participants (such as broker-dealers, analysts, and
other clearing agencies) could also benefit from direct use of the
machine-readable disclosures on Form CA-1. For example, institutional
investors could leverage the machine-readability 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 proposed structured data requirements, performing these
types of analyses would need to be done 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
proposed structured data requirement would enable 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 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 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.\128\ The probability that, and extent to which,
these particular benefits would arise from structured Form CA-1
disclosures could be heightened for Exhibit H, which would likewise
include structured financial statements. In addition, the particular
benefits of structuring data would likely vary based on the type of
disclosures included in each particular Exhibit. Structured numerical
disclosures, such as those that would be 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 would be included on
Exhibit K, lend themselves to period-over-period redline comparisons,
targeted keyword searching, and more sophisticated sentiment analysis.
---------------------------------------------------------------------------

    \128\ See infra section X.C.1.b.
---------------------------------------------------------------------------

    The Commission is proposing to require Inline XBRL for certain
exhibits to Form CA-1 and custom XML for others, because the Commission
believes 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 human-readability while maintaining machine-readability.\129\
---------------------------------------------------------------------------

    \129\ See supra note 89.
---------------------------------------------------------------------------

    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 Commission believes the use of custom XML data languages would be
preferable to Inline XBRL, because it would yield smaller file sizes
and therefore enable more streamlined processing of the
information.\130\ The Commission believes requiring custom XML rather
than Inline XBRL for these disclosures would also be preferable because
it would enable EDGAR to generate fillable web forms that would 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.
---------------------------------------------------------------------------

    \130\ See also infra section X.E.4 (discussing other structured
data languages that would result in smaller file sizes than Inline
XBRL).
---------------------------------------------------------------------------

    The proposed approach of requiring Inline XBRL for some Form CA-1
exhibits and custom XML for others would entail drawbacks for users of
the information (including Commission staff and market participants).
Specifically, data users would be unable to incorporate the Inline XBRL
disclosures on Form CA-1 into the same datasets and applications as the
custom XML disclosures on Form CA-1, and 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 would be unable to check
for any inappropriate inconsistencies between disclosures on Inline
XBRL exhibits and disclosures on custom XML exhibits on a given Form
CA-1, thus reducing the benefit of improved data quality that would be
likely to result from structured data requirements. Finally, some Form
CA-1 filers may already be using Inline XBRL to structure similar data
for internal business purposes, such as through the use of ERP systems;
these filers may prefer to use Inline XBRL for all proposed structured
data requirements of Form CA-1, rather than using a combination of
Inline XBRL and custom XML.\131\ Nonetheless, the Commission believes
the streamlined data processing associated with the smaller file sizes
of the proposed custom XML exhibits, as described earlier in this
section, would justify any such drawbacks.
---------------------------------------------------------------------------

    \131\ See infra note 570 (discussing the prevalence of XBRL
integration into ERP systems).
---------------------------------------------------------------------------

    The Commission is proposing to require clearing agencies to file
copies of existing documents, such as copies of by-laws, written
agreements, and contracts governing subscription terms, as unstructured
PDF attachments. The Commission believes requiring clearing agencies to
retroactively structure these existing documents, which were prepared
for purposes outside of fulfilling the Commission's disclosure
requirements, would 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, the Commission does not believe structured data requirements are
warranted for these copies of existing documents.
6. Request for Comment
    20. The Commission requests comment on all aspects of the proposed
revisions to Form CA-1 to facilitate electronic filing in EDGAR. Are
there any aspects of transitioning the form to electronic filing that
the Commission has not addressed above? Please explain.
    21. The Commission has proposed new Section IX to address the
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. Do the proposed modifications, as described above,
appropriately address the wide range of submissions that these types of
materials encompass, or is there a type of submission under any Order
that would be technologically infeasible to require to be submitted
under Section IX in EDGAR? Please explain why or why not.
    22. Clearing agencies would be required to prepare certain elements
of Form CA-1 filings using Inline XBRL and custom XML. Would clearing
agencies experience practical difficulties or incur significant costs
in preparing and submitting those elements of Form CA-1 using Inline
XBRL and custom XML? If so, please explain the nature of those
difficulties and costs as well as any alternative approaches the
Commission should adopt.
    23. Would requiring different structured data languages for
different Exhibits of Form CA-1 provide benefits to data users or
filers that justify any drawbacks associated such an approach? Please
explain the nature of such benefits and drawbacks, and why the benefits
would justify the drawbacks (or vice versa).
    24. If a mix of structured data languages would be appropriate,
should the specific data languages proposed for each Form CA-1 Exhibit
be modified? For example, are there Form CA-1 Exhibits proposed as
custom XML documents that would be better suited as Inline XBRL
documents, or vice versa? Please explain why or why not.
    25. Are there other structured data languages (i.e., data languages
other than Inline XBRL and custom XML) that would be more appropriate
for some or all of the Form CA-1 disclosures? Please explain why or why
not, and, if the former, please identify the structured data language
or languages that would be more suitable.
    26. Would requiring clearing agencies to file copies of existing
documents as unstructured PDF attachments, rather than requiring
clearing agencies to retroactively structure those documents in
machine-readable data languages, ease compliance burdens on clearing
agencies? If so, would the reduced compliance burden on clearing
agencies justify forgoing the benefits to data users of structuring
these existing documents? Please explain why or why not.

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.\132\ 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,\133\ 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.\134\
---------------------------------------------------------------------------

    \132\ See 15 U.S.C. 78s(b).
    \133\ See 15 U.S.C. 78s(b).
    \134\ See 17 CFR 240.19b-4(e)(1).
---------------------------------------------------------------------------

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 \135\ 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 would 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).\136\
---------------------------------------------------------------------------

    \135\ 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).
    \136\ See Exchange Act Release No. 40761 (Dec. 8, 1998), 63 FR
70952 (Dec. 22, 1998) (``Rule 19b-4(e) Adopting Release''). See also
17 CFR 240.19b-4(c)(1).
---------------------------------------------------------------------------

    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.\137\
---------------------------------------------------------------------------

    \137\ 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 Index-Linked Securities); 48405 (Aug. 25,
2003), 68 FR 52257 (Sep. 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).
---------------------------------------------------------------------------

    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 derivatives securities product not required to be submitted as a
proposed rule change to the Commission for approval.\138\ The
Commission also stated that it would make Forms 19b-4(e) public.\139\
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,\140\ 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).
---------------------------------------------------------------------------

    \138\ See Rule 19b-4(e) Adopting Release, 63 FR at 70963.
    \139\ See id. at 70964, fn. 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.'').
    \140\ See Rule 19b-4(e) Adopting Release, 63 FR at 70964.
---------------------------------------------------------------------------

3. Current Requirements for Filing Form 19b-4(e)
    Under Rule 19b-4(e)(2)(ii), SROs are required to submit Form 19b-
4(e) \141\ to the Commission within five business days after
commencement of trading a new derivative securities product.\142\ In
addition, pursuant to the instructions for completing Form 19b-4(e),
SROs are required to submit an original and nine paper copies of a duly
executed Form 19b-4(e) with the Commission.\143\
---------------------------------------------------------------------------

    \141\ See 17 CFR 249.820.
    \142\ See Rule 19b-4(e)(2)(ii). Although Rule 19b-4(e) relates
to the listing and trading of new derivative products by SROs, the
only SROs that list and trade new derivative products and file Forms
19b-4(e) to the Commission are national securities exchanges.
    \143\ See Items II and III of the Instructions for Completing
Form 19b-4(e), 17 CFR 249.820.
---------------------------------------------------------------------------

4. Proposed Rescission of Form 19b-4(e)
    The Commission proposes to amend Rule 19b-4 to rescind Form 19b-
4(e) and instead require SROs to post on their internet websites the
information currently included on Form 19b-4(e). More specifically,
under the proposal, an SRO would be required to post on its public
internet website, within five business days after commencing the
trading of a new derivatives securities product, the information
required in current Part I, Items 2 through 9 of Form 19b-4(e) for that
product:\144\ (a) type of issuer of new derivatives 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 narrow-based; (e) ticker symbol(s) of new derivative
securities product; (f) market(s) upon which securities comprising the
underlying instrument trades; (g) settlement methodology of new
derivative securities product; and (h) position limits of new
derivative securities product (if applicable). The Commission proposes
that this information be provided using the most recent versions of an
XML schema and the associated PDF renderer that would be published on
the Commission's website.\145\ The Commission believes that this
information 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.
---------------------------------------------------------------------------

    \144\ Part I, Item 1, ``Name of Self-Regulatory Organization
Listing New Derivative Securities Product,'' would not be necessary
to include because the table of new derivative securities products
would be on the website of the SRO that has listed and is trading
the new derivatives securities product, so the identity of the
listing SRO will be self-evident.
    \145\ See proposed 17 CFR 240.19b-4(e)(2)(ii).
---------------------------------------------------------------------------

    As is required currently in Part II of Form 19b-4(e), an SRO would
be required to provide on its website a representation by a duly
authorized SRO official that the governing body of the SRO has duly
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 Commission
believes that the requirement to provide an email address for the
exchange contact employee will expedite communications between
Commission staff and the relevant exchange. Any SRO that relies on Rule
19b-4(e) to list and trade a new derivative securities product would
continue 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 derivatives 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.\146\ Thus, the SRO trading a new
derivative securities product would need 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 current rule, and as contemplated in the
adoption of the current rule, the Commission will review SRO compliance
through its routine inspections of SROs.\147\
---------------------------------------------------------------------------

    \146\ See 17 CFR 240.17a-1.
    \147\ See Rule 19b-4(e) Adopting Release, 63 FR at 70963.
---------------------------------------------------------------------------

    The Commission believes that its proposal will provide the same
information for the Commission and the public as is provided via
current Form 19b-4(e) without necessitating the additional steps of
submitting a paper form containing that information with the
Commission. The Commission believes that, among other benefits, this
proposal 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.\148\
During this period, the Commission has encouraged the dissemination of
information electronically via the internet and other automated systems
and services.\149\ In 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 Form 19b-4(e) Adopting Release, each of which is
submitted to the Commission and then must be made public individually
by the Commission,\150\ and therefore require, in the aggregate,
additional time to process before the information contained in those
Forms becomes available for Commission review and also publicly
available.\151\ The Commission believes that requiring SROs to post the
information contained in the current Form 19b-4(e) on its website would
accomplish the goal outlined in the Rule 19b-4(e) Adopting Release, for
the Commission to maintain accurate information regarding these new
derivatives securities products, while ensuring that information
remains publicly available.\152\ In addition, the Commission believes
that requiring SROs to post that information within 5 business days
after commencement of trading a new derivatives product, as the current
rule requires, 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.\153\ The Commission believes 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 would render that information in a more
readily accessible format by both the Commission and the public than
submitting numerous Forms 19b-4(e) does currently, and would have the
added benefit of eliminating the two-step 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 would be subject to
the relevant SRO's books and records obligations \154\ and subject to
the Commission's examination and inspection authority,\155\ the
Commission believes that the accuracy of the records for Commission
review would be commensurate with the accuracy of the information on
the Forms 19b-4(e) submitted to the Commission under the current rule.
---------------------------------------------------------------------------

    \148\ See supra note 13.
    \149\ Id. See also supra note 14.
    \150\ See id. at 70964, n. 139.
    \151\ 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).
    \152\ See Rule 19b-4(e) Adopting Release, 63 FR at 70963, 70964,
n. 139.
    \153\ See 17 CFR 240.19b-4(e)(2)(ii).
    \154\ See 17 CFR 240.17a-1.
    \155\ See Rule 19b-4(e) Adopting Release, 63 FR at 70963.
---------------------------------------------------------------------------

5. Request for Comment
    27. Would it be appropriate to require the information submitted on
current Form 19b-4(e) instead to be posted on the relevant SRO's
publicly available internet website? Would there be particular
compliance or oversight concerns such a requirement would raise even
though the relevant SRO publication of that information would remain
subject to existing books and records requirements and the Commission's
examination and inspection authority? If so, explain what those
concerns are, and why.
    28. Should the Commission instead amend Rule 19b-4(e), Form 19b-
4(e), and the instructions thereunder to require Form 19b-4(e) to be
submitted electronically on EDGAR? If so, explain why.
    29. Is there an alternative method for submitting Form 19b-4(e)
that the Commission should use instead? If so, explain what such an
alternative method would be, and why.
    30. What, if any, costs would be associated with posting the
information required under proposed Rule 19b-4(e) on the SRO's website?
Are those costs more, less, or the same as those currently expended
under the current Form 19b-4(e) filing process? Similarly, what costs
would be associated with requiring SROs to post Rule 19b-4(e)
information using a custom XML data language and associated PDF
renderer? Would such costs not justify the benefits associated with
such requirements? Please explain why or why not.
    31. Would requiring a different structured data language, such as
Inline XBRL, for the Rule 19b-4(e) information provide benefits to data
users justify any drawbacks associated such an approach? If so, please
identify the more appropriate data language, explain the nature of such
benefits and drawbacks, and why the benefits would not justify the
drawbacks (or vice versa).
    32. Should the Commission also amend Rule 19b-4(e) to require that
the information submitted on current Form 19b-4(e) be posted on the
relevant SRO's publicly available internet website sooner than five
business days after commencement of trading a new derivative securities
product? Please explain why or why not. Are there any issues, concerns
or burdens with shortening the timeframe? If so, please describe. Is
there another timeframe earlier than five business days (e.g., one
business day, two business days, three business days) within which it
would be appropriate to require such information be posted? If so,
please explain what that timeframe should be, and why.

F. Rule 19b-4(j) and Form 19b-4

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.\156\ Rule 19b-4, subject to certain exceptions, requires an SRO
to submit each proposed rule change by electronically filing Form 19b-
4.\157\
---------------------------------------------------------------------------

    \156\ See 15 U.S.C. 78s.
    \157\ See 17 CFR 240.19b-4(b).
---------------------------------------------------------------------------

2. Proposed Rule Change
    The Commission proposes to remove the requirement under 17 CFR
240.19b-4(j) (``Rule 19b-4(j)'') \158\ 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 proposes to remove 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.\159\ The
Commission

believes 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.
---------------------------------------------------------------------------

    \158\ See 17 CFR 240.19b-4(j).
    \159\ This proposal 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 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), would
remain in effect.
---------------------------------------------------------------------------

3. Request for Comment
    33. Should the Commission retain the requirement under 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? If
so, explain why.
    34. Should the Commission retain 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? If so, explain why.
    35. What, if any, costs would be associated with removing the
manual signature requirement? Are those costs more, less, or the same
as those currently expended under the current Form 19b-4 filing
process?

G. Conforming Technical Amendment to Rule 202.3(b) Under the Exchange
Act

    As noted above, the Commission proposes a technical amendment to
conform its Informal and Other Procedures to the changes proposed
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. Specifically, the
Commission proposes conforming changes to Rules 202.3(b)(2) and (b)(3)
of its Informal and Other Procedures \160\ to clarify that defective
applications on Form 1 and notices on Form 1-N, respectively, would be
returned to the Filer,\161\ and would not be held by the
Commission.\162\ 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, the Commission believes that holding such
applications or notices serves no purpose, as defective Form 1 and Form
1-N filings do not allow the Commission and its staff to review such
applications and notices.\163\ In such situations, the Commission
believes that it would be 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) \164\ are being amended to
update the name of the Division of Trading and Markets from the
previously used Division of Market Regulation.
---------------------------------------------------------------------------

    \160\ See 17 CFR 202.3(b)(2) and (3).
    \161\ 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.
    \162\ 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.
    \163\ Id.
    \164\ See 17 CFR 202.3(b)(2) and (3).
---------------------------------------------------------------------------

III. Proposed Requirements for Clearing Agencies To Electronically File
Covered Supplemental Materials

A. Current Rule 17a-22

    Current Exchange Act Rule 17a-22 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 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.\165\ A registered clearing agency for which the
Commission is not the ARA shall at the same time file one copy of such
material with its ARA.\166\
---------------------------------------------------------------------------

    \165\ See 17 CFR 240.17a-22.
    \166\ See id.
---------------------------------------------------------------------------

    In adopting Rule 17a-22 in 1980, the Commission established for
clearing agencies a filing requirement that generally paralleled the
filing requirements imposed under Exchange Act Rules 6a-3, 15Aj-1, and
17a-21--rules applicable to national securities exchanges, registered
securities associations, and the MSRB, respectively, that required the
filing of certain supplemental materials.\167\ Clearing agencies,
unlike other SROs, previously had not been required to file with the
Commission supplemental materials (other than stated policies,
practices, and interpretations deemed to be SRO rules under Rule 19b-4)
they made generally available. Accordingly, the rule established a
filing requirement parallel to the filing requirements already imposed
on other SROs.\168\ The Commission stated in its adoption of the rule
that receipt of such information was important to its oversight
responsibilities for clearing agencies under the Exchange Act.\169\
---------------------------------------------------------------------------

    \167\ See 17 CFR 240.6a-3; 17 CFR 240.15Aj-1; and 17 CFR
240.17a-21, respectively.
    \168\ See 17 CFR 240.6a-3; 17 CFR 240.15Aj-1; and 17 CFR
240.17a-21, respectively. Since the adoption of Rule 17a-22 in 1980,
the Commission has developed a robust and extensive regulatory
regime applicable to clearing agencies. See generally Exchange Act
Rule 17ad-22, 17 CFR 240.17ad-22 (establishing, among other things,
requirements related to governance, operations, risk management).
Much of the information required to be filed with the Commission
under current Rule 17a-22 is available to the Commission both
through this developed regime and through other regulatory sources.
    \169\ See Exchange Act Release No. 17258 (Oct. 30, 1980), 45 FR
73906, 73914 (Nov. 7, 1980) (``Rule 17a-22 Adopting Release'').
---------------------------------------------------------------------------

B. Updated Staff Statement and Resulting Alternate Arrangements for
Rule 17a-22 Compliance

    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.\170\ In Part VIII.D., the
Commission requests comment as to whether the Commission should
preserve the ability of registered clearing agencies to submit
materials for filing to the Commission through a dedicated email inbox
if the proposed amendment is adopted. Such an alternative would
eliminate the burdens associated with producing and mailing paper
copies of the materials to the Commission for filing. It would also
reduce the time between mailing and delivery of paper copies, improving
the efficiency of the submission and review process. Since the Updated
Staff Statement was issued, the Commission staff has observed that
filing through the dedicated email inbox has resulted in a

more efficient process for both the clearing agencies and for
Commission staff.
---------------------------------------------------------------------------

    \170\ See supra note 5.
---------------------------------------------------------------------------

C. Proposed Amendments to Rule 17a-22

    The Commission is now proposing to amend Rule 17a-22 to: (i)
replace the requirement to file supplementary materials with the
Commission or an ARA in paper form with a requirement to 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.\171\ By replacing the paper filing
requirement for registered clearing agencies with an electronic posting
requirement via the clearing agency's internet website, the proposed
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.
---------------------------------------------------------------------------

    \171\ In consultation with the Federal Reserve, the Commission
is proposing to remove 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 requirements in Rule 17a-22, certain provisions in
section 17A of the Exchange Act require notice to the ARA, and the
proposed amendments to Rule 17a-22 do not affect those provisions.
See, e.g., 15 U.S.C. 78q-1(b)(5)(C).
---------------------------------------------------------------------------

    Specifically, proposed Rule 17a-22 would require 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.
1. Two-Day Timeframe for Compliance
    The Commission believes 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.\172\ As
discussed above, like proposed rule changes, 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.\173\ Clearing agencies should already have
established internal policies and procedures in place to meet these
posting requirements for proposed rule changes, and the Commission
believes these procedures could be reasonably replicated to meet the
timeframes under the proposed 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
Commission believes that the time required to comply with the proposed
rule (when compared to the current rule) should be significantly
reduced. By eliminating the paper filing requirement, clearing agencies
will 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, the Commission believes
that 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 proposed 2 business
days.
---------------------------------------------------------------------------

    \172\ See 17 CFR 240.19b-4(m).
    \173\ See supra section I.C.
---------------------------------------------------------------------------

2. Scope of Supplemental Materials
    Rule 17a-22, as proposed to be amended, does not change the scope
of supplemental materials to which the rule applies. Accordingly, the
proposed 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 would be
subject to Rule 17a-22. The proposed 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.
    Because the significant relationships vary across clearing
agencies, the Commission is proposing to delete the list of examples of
such relationships from the proposed rule text. However, the removal of
these examples from the text of the proposed rule is not an indication
that these entities are no longer considered within the scope of the
rule. Rather, the Commission is proposing to eliminate 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. The Commission continues to believe that issuers,
transfer agents, custodians, service providers, and other non-
participant entities that use the clearing agency's services are
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 proposed 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
proposed Rule 17a-22 are distinct from any posting requirements
required under section 19(b) and Rule 19b-4 thereunder. This proposed
added text is consistent with the Commission's stated purpose of Rule
17a-22 in 1980,\174\ and this proposed change is intended to avoid the
imposition of duplicative posting requirements.
---------------------------------------------------------------------------

    \174\ See generally Rule 17a-22 Adopting Release.
---------------------------------------------------------------------------

    Specifically, in the 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.\175\ 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 Rules 6a-3, 15Aj-1, and 17a-21.\176\ 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 proposed 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.
---------------------------------------------------------------------------

    \175\ Id.
    \176\ 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 proposing to amend Rule 17a-22, the
Commission believes it is appropriate to transition the requirement
in Rule 17a-22 for clearing agencies solely to internet posting.
---------------------------------------------------------------------------

3. Meaning of ``Generally Available''
    The existing requirement under Rule 17a-22 to post only those
materials that the clearing agency is ``making generally available''
would remain unchanged. 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. Because of the ``generally available''
component in Rule 17a-22, the Commission does not envision that
documents of a confidential or sensitive nature, or that would cause
harm if publicly disclosed, would fall within the scope of the rule.
Accordingly, the Commission believes that amending Rule 17a-22 to
require the posting of supplemental material on an internet website
should not create concerns from a clearing agency's perspective
regarding privacy or confidentiality of materials because such material
would not be in scope of the rule. In the Commission's experience,
most, if not all, of the filings required by current Rule 17a-22 are
already being posted on a registered clearing agency's website.
4. Requirement to ``Prominently Post''
    Finally, in the proposed amendment to Rule 17a-22 that would
require the clearing agency to ``prominently post'' any supplemental
material subject to the amended rule on the clearing agency's website,
the Commission is proposing to interpret ``prominently'' to mean that
the supplemental materials will be 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 in-
depth 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. The Commission believes generally that
supplemental materials should be 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 one does not already exist, a registered clearing agency
generally should 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.

D. Request for Comment

    36. Would the proposal to replace the requirement to file paper
copies with a requirement to post supplemental materials on a clearing
agency's website benefit or harm the clearing agencies, market
participants or the general public? If so, please describe any benefits
or harms. The Commission particularly is interested in comments or
analysis related to costs on both a qualitative or quantitative basis.
    37. Does the two-business day requirement to post supplemental
materials allow for sufficient time to prepare and post the materials?
If not, why not? What alternative timeframe would be appropriate and
why?
    38. The proposed amendment to the rule would require that materials
issued or made generally available to clearing agency participants or
other entities with whom the clearing agency has a significant
relationship to be posted to the clearing agency's internet website. Is
the rule as proposed to be amended clear in terms of which participants
or entities would be included? Should this group of persons or entities
be expanded, contracted or otherwise modified? If so, why, and how? Are
there any other concerns related to this requirement, such as with
respect to documents that may be confidential or non-public? If so,
please describe.
    39. The Commission is proposing to require supplemental materials
to be ``prominently'' posted on the clearing agency's website. Is this
proposed requirement clear? Should it be modified, and if so, why and
how?
    40. Should the Commission provide registered clearing agencies with
the opportunity to continue the alternate arrangements established
pursuant to the Updated Staff Statement, rather than requiring internet
posting under the rule? If so, why?
    41. What, if any, costs would be associated with preparing
documents for posting on the clearing agency's internet website? Are
those costs more, less or the same as those currently expending under
the current Updated Staff Statement processes? Would the proposed two
business day timeframe to post supplemental materials cause any change
in the costs associated with complying with the rule? If so, please
provide as much detail as possible as to whether such costs increase or
decrease, and the underlying reasons for the change.

IV. Proposed Requirements To Electronically File Broker-Dealer, OTC
Derivatives Dealer, and SBS Entity Reports

    The Commission proposes that the following forms and reports be
filed in electronic format on EDGAR:

------------------------------------------------------------------------
        Form or report              Filer type      Proposed amendments
------------------------------------------------------------------------
Form X-17A-5 Part III: Annual   Broker or Dealer.  No amendments to the
 reports and related annual                         form; Exchange Act
 filings.                                           Rules 17a-5 and 17a-
                                                    12 (17 CFR 240.17a-
                                                    5; 17 CFR 240.17a-
                                                    12).
                                                   Rule 101(a) of
                                                    Regulation S-T (17
                                                    CFR 232.101(a)).

Form 17-H: Risk Assessment      Broker or Dealer.  No amendments to the
 Report for Brokers and                             form; Exchange Act
 Dealers.                                           Rule 17h-2T (17 CFR
                                                    240.17h2-T).
                                                   Rule 101(a) of
                                                    Regulation S-T.
Form X-17A-5 Part III: Annual   SBS Entity.......  No amendments to the
 reports and related annual                         form; Exchange Act
 filings.                                           Rule 18a-7 (17 CFR
                                                    240.18a-7).
                                                   Rule 101(a) of
                                                    Regulation S-T.
------------------------------------------------------------------------

A. Rules 17a-5, 18a-7, and 17a-12

1. Rule 17a-5 Filing Requirements
    Paragraph (d) of Exchange Act Rule 17a-5 generally requires a
broker-dealer registered with the Commission to file annual reports
with the Commission not more than 60 calendar days after the fiscal
year end of the broker-dealer.\177\ Paragraph (d)(6) of Rule 17a-5
provides that the annual reports ``must be filed with the Commission at
the regional office of the Commission for the region in which the
broker or dealer has its principal place of business and to the
Commission's principal office in Washington, DC, or the annual reports
may be filed with the Commission electronically in accordance with
directions provided on the Commission's website.'' \178\ The annual
reports include a financial report and either a compliance report or an
exemption report, as well as reports prepared by an independent public
accountant registered with the Public Company Accounting Oversight
Board (``PCAOB'') covering the financial report and compliance or
exemption report in accordance with standards of the PCAOB.
---------------------------------------------------------------------------

    \177\ See 17 CFR 240.17a-5(d). See also Order Extending the
Annual Reports Filing Deadline for Certain Smaller Broker-Dealers,
Exchange Act Release No. 91128 (Feb. 12, 2021), 86 FR 10372 (Feb.
19, 2022) (extending the filing deadline for the annual reports by
30 days for certain smaller broker-dealers on certain conditions,
including that the annual reports be filed electronically).
    \178\ See 17 CFR 240.17a-5(d)(6).
---------------------------------------------------------------------------

    Approximately 3,218 broker-dealers file annual reports with the
Commission, and the reports vary in size from approximately 20 pages
for smaller firms to approximately 100 pages for larger firms. Rule
17a-5 currently provides for paper filing of the annual reports, and
paper filings are processed manually by Commission staff. However, the
Commission has prepared EDGAR to receive broker-dealer annual reports
electronically, and Commission staff issued a no-action letter \179\
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. Based on
EDGAR data, for the 12 months ended December 31, 2022, the Commission
received 1,559 filings of the annual reports in paper and 1,659
electronically via EDGAR. Approximately 85% of broker-dealers have a
fiscal year end of December 31, so that a significant number of filings
are made at approximately the same time each year, straining the
current manual intake process. A portion of the annual reports filed
pursuant to Rule 17a-5 must be made public, and the Commission
publishes the public portion on EDGAR. It takes on average several
weeks from 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. In
contrast, an automated process is used to make the applicable portions
of annual reports filed on EDGAR available to Commission staff and the
public, typically within seconds of the electronic filing being made.
---------------------------------------------------------------------------

    \179\ 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-annual-reports.pdf (``Annual Reports No-
Action Letter'').
---------------------------------------------------------------------------

    Paragraph (e)(2) of Rule 17a-5 provides that the broker-dealer must
attach to the financial report an oath or affirmation that, among other
things, the financial report is true and correct.\180\ The oath or
affirmation must be made by an individual specified in the rule, such
as a chief executive officer, and must be made ``before a person duly
authorized to administer such oaths or affirmations.'' \181\ The
Commission has promulgated Form X-17A-5 Part III as the means by which
the broker-dealer provides the oath or affirmation required under
paragraph (e)(2) of Rule 17a-5.\182\
---------------------------------------------------------------------------

    \180\ See 17 CFR 240.17a-5(e)(2).
    \181\ Id. See also Updated Staff Statement, supra note 6
(addressing a temporary situation with respect to paper filing and
notarization requirements that applied to certain filings, which
included broker-dealer annual reports).
    \182\ See 17 CFR 249.617. See also FOCUS Reporting System;
Requirements for Financial Reporting, Exchange Act Release No. 14242
(Dec. 9, 1977), 42 FR 63883 (Dec. 21, 1977) (``The Commission
proposed the facing page for the annual report based on its
experience that the processing of the annual report would be greatly
facilitated if the identification information were submitted in a
consistent format. The proposed facing page requires basic
identification information, including the . . . name and address of
the broker or dealer and its accountant, the oath or affirmation,
and the itemization of the materials included in the report.'').
Form X-17A-5 Part III is available at http://www.sec.gov/about/forms/formx-17a-5_3.pdf.
---------------------------------------------------------------------------

    The first sentence of paragraph (e)(3) of Rule 17a-5 provides that
the annual reports are not confidential, except that, if the Statement
of Financial Condition in a format that is consistent with Part II or
Part IIA of Form X-17A-5 \183\ is bound separately from the balance of
the annual reports filed under paragraph (d) of Rule 17a-5, and each
page of the balance of the annual reports is stamped ``confidential,''
then the balance of the annual reports will be deemed confidential to
the extent permitted by law.\184\
---------------------------------------------------------------------------

    \183\ See 17 CFR 249.617.
    \184\ The Commission is proposing to replace ``deemed
confidential to the extent permitted by law'' with ``deemed
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 Rule 17h-2T) and to clarify the legal basis of the rule.
This proposed amendment is not intended to change the substantive
meaning of this sentence.
---------------------------------------------------------------------------

    Paragraph (k) of Rule 17a-5 requires a broker-dealer that has been
approved to use internal models when computing net capital pursuant to
Appendix E of Exchange Act Rule 15c3-1 \185\ (``ANC broker-dealer'') to
file a supplemental report on management controls concurrently with the
annual reports (the ``ANC broker-dealer supplemental report'').\186\
The ANC broker-dealer supplemental report must be prepared by a
registered public accounting firm and must indicate the results of the
accountant's agreed-upon procedures review of the internal risk
management control system of the broker-dealer.\187\ As of June 15,
2022, there were five ANC broker-dealers. The ANC broker-dealer
supplemental reports average approximately 100 pages in length and are
generally sent to the Commission staff via email.
---------------------------------------------------------------------------

    \185\ See 17 CFR 240.15c3-1e.
    \186\ See 17 CFR 240.17a-5(k).
    \187\ See id.

---------------------------------------------------------------------------

2. Rule 18a-7 Filing Requirements
    Paragraph (c) of Rule 18a-7, which was modeled on paragraph (d) of
Rule 17a-5, generally requires an SBSD or a MSBSP for which there is no
prudential regulator and which is not a broker-dealer to file annual
reports with the Commission not more than 60 calendar days after the
fiscal year end of the entity.\188\ As of June 15, 2022, there were
nine such entities. Paragraph (c)(6) of Rule 18a-7 provides that the
annual reports ``must be filed with the Commission at the regional
office of the Commission for the region in which the security-based
swap dealer or major security-based swap participant has its principal
place of business and the Commission's principal office in Washington,
DC, or the annual reports may be filed with the Commission
electronically in accordance with directions provided on the
Commission's website.'' \189\
---------------------------------------------------------------------------

    \188\ See 17 CFR 240.18a-7(c).
    \189\ See 17 CFR 240.18a-7(c)(6).
---------------------------------------------------------------------------

    Paragraph (d)(1) of Rule 18a-7 provides that the SBSD or MSBSP must
attach to the financial report an oath or affirmation that, among other
things, the financial report is true and correct.\190\ The oath or
affirmation must be made by an individual specified in the rule, such
as a chief executive officer, and must be made ``before a person duly
authorized to administer such oaths or affirmations.'' \191\
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    \190\ See 17 CFR 240.18a-7(d)(1).
    \191\ See 17 CFR 240.18a-7(d)(1)(ii).
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    The first sentence of paragraph (d)(2) of Rule 18a-7 provides that
the annual reports are not confidential, except that, if the Statement
of Financial Condition in a format that is consistent with Part II of
Form X-17A-5 \192\ is bound separately from the balance of the annual
reports filed under paragraph (c) of Rule 18a-7, and each page of the
balance of the annual reports is stamped ``confidential,'' then the
balance of the annual reports will be deemed confidential to the extent
permitted by law.\193\
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    \192\ See 17 CFR 249.617.
    \193\ The Commission is proposing to replace ``deemed
confidential to the extent permitted by law'' with ``deemed
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. This proposed amendment is not intended to change the
substantive meaning of this sentence.
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3. Rule 17a-12 Filing Requirements
    Paragraph (b) of Rule 17a-12 requires that every OTC derivatives
dealer annually file audited financial statements.\194\ Paragraph
(b)(6) of Rule 17a-12 requires that the OTC derivatives dealer file two
copies of the audited financial statements at the Commission's
principal office in Washington, DC.\195\ As of June 15, 2022, there
were three OTC derivatives dealers. All three OTC derivatives dealers
voluntarily file audited financial statements via EDGAR.
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    \194\ See 17 CFR 240.17a-12(b). Although an OTC derivatives
dealer is a type of broker-dealer, paragraph (p) of Rule 17a-5
provides that an OTC derivatives dealer may comply with Rule 17a-5
by complying with Rule 17a-12.
    \195\ See 17 CFR 240.17a-12(b)(6).
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    Paragraph (c)(2) generally provides that the OTC derivatives dealer
must attach to the audited financial statements an oath or affirmation
that, to the best knowledge and belief of the person making the oath or
affirmation, among other things, the audited financial statements and
required schedules are true and correct.\196\ The oath or affirmation
must be made by an individual specified in the rule, such as a duly
authorized officer, and must be made before a person duly authorized to
administer such oaths.\197\
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    \196\ See 17 CFR 240.17a-12(c)(2).
    \197\ See 17 CFR 240.17a-12(c)(2).
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    Paragraph (c)(3) of Rule 17a-12 provides that all of the statements
filed pursuant to paragraph (b) of Rule 17a-12 are confidential,\198\
except that they will be available for use by any official or employee
of the United States or by any other person to whom the Commission
authorizes disclosure of such information as being in the public
interest.\199\
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    \198\ The Commission is proposing to replace ``shall be
confidential'' with ``shall be deemed 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. This proposed amendment
is not intended to change the substantive meaning of this sentence.
    \199\ See 17 CFR 240.17a-12(c)(3). The Commission is proposing
to replace ``to whom the Commission authorizes disclosure of such
information as being in the public interest'' with ``to whom the
Commission authorizes disclosure of such information'' to conform
with section 24 of the Exchange Act and the rules thereunder.
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    Paragraphs (k), (l), and (m) of Rule 17a-12 require that the
accountant's report on material inadequacies and reportable conditions,
accountant's report on management controls, and accountant's report on
inventory pricing and modeling, respectively, be filed concurrently
with the annual audit report.\200\
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    \200\ See 17 CFR 240.17a-12(k), (l), and (m).
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4. Proposed Amendments to Rules 17a-5, 18a-7, and 17a-12
    The Commission is proposing amendments to Rules 17a-5, 18a-7, and
17a-12 that would 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.\201\ Specifically, the Commission proposes amending
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. The
amended paragraphs would also provide that the annual reports must be
submitted in Inline XBRL (i.e., as an Interactive Data File in
accordance with 17 CFR 232.405 (``Rule 405 of Regulation S-T'')).\202\
If these proposed amendments are adopted, the EDGAR Filer Manual would
be updated to reflect these amendments to Rules 17a-5, 18a-7, and 17a-
12. As is currently the case, first-time EDGAR filers would need to
obtain EDGAR access credentials.\203\
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    \201\ For further discussion of the proposed structured data
requirements, including Inline XBRL requirements, see infra section
VII.A.
    \202\ See Rule 405(a)(3) of Regulation S-T, which specifies
Inline XBRL as the data language to be used for the Interactive Data
File. See 17 CFR 232.405(a)(3).
    \203\ Instructions for obtaining EDGAR access credentials are on
the Commission's website at www.sec.gov/divisions/marketreg/broker-dealer-edgar-access-credentials.htm.
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    The Commission is proposing to amend paragraph (e)(2) of Rule 17a-5
to add a new paragraph (e)(2)(iii). The new paragraph would provide
that the notarized oath or affirmation must 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.'' \204\
Similarly, the Commission is proposing to amend paragraph (d)(1) of
Rule 18a-7 to add a new paragraph (d)(1)(iii). The new paragraph would
provide that the notarized oath or affirmation must be kept ``for a
period of not less than six years, the first two years in an easily
accessible place in accordance with the requirements of Rule 18a-6.''
\205\ The

Commission also is proposing an analogous change to paragraph (c) of
Rule 17a-12 by redesignating current paragraph (c)(3) as (c)(4) and
adding a new paragraph (c)(3). The new paragraph would state that the
oath or affirmation must 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.'' \206\
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    \204\ See paragraph (e)(2)(iii) of proposed Rule 17a-5.
    \205\ See paragraph (d)(1)(iii) of proposed Rule 18a-7. As
stated above, with respect to Rules 17a-5 and 18a-7, the oath or
affirmation must be made ``before a person duly authorized to
administer such oaths or affirmations.'' The Commission recently
updated Volume I of the EDGAR Filer Manual so that, in connection
with EDGAR access requests, the required notarized signature of an
authorized individual may be obtained by ``manual, electronic, or
remote online notarization recognized by the law of any state or
territory of the United States or the District of Columbia, and must
include a manual or electronic signature of the authorized
individual, as required by the notary for the type of notarization
at issue. Foreign filers who do not have access to a United States
notary public must use the foreign local equivalent of a notary
public or obtain notarization by a remote online notary recognized
by the law of any state or territory of the United States or the
District of Columbia.'' See Adoption of Updated EDGAR Filer Manual,
Proposed Collection and Comment Request for Form ID, Release Nos.
33-10902; 34-90637; 39-2536, IC-34137 (Dec. 11, 2020), 86 FR 7968,
7969 (Feb. 3, 2021). If the Commission were to adopt the proposed
amendments to Rules 17a-5 and 18a-7, these recent updates to the
EDGAR Filer Manual would apply to the oath or affirmation
requirement in both rules. The recordkeeping requirements of Rules
17a-5 and 18a-7 could be met by keeping an electronic copy of the
notarized oath or affirmation for the required length of time.
    \206\ See paragraph (c) of Rule 17a-12, as proposed to be
amended.
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    In light of the proposed requirement that the annual reports and
related annual filings under Rules 17a-5 and 18a-7 be filed
electronically on EDGAR, the Commission is proposing amendments to 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 on EDGAR.\207\ The Commission is
proposing amendments to the confidentiality provisions to conform to
the proposed electronic process for filing on EDGAR. The Commission
proposes amending the first sentence of paragraph (e)(3) of Rule 17a-5
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.''
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    \207\ See supra sections IV.A.1. through 3. 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
would not change.
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    The Commission is proposing to replace ``deemed confidential to the
extent permitted by law'' with ``deemed 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 Rule 17h-2T) and to clarify the
legal basis of the rule. The Commission is also proposing 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. The proposed
amendments are not intended to change the substantive meaning of these
provisions.
    The phrase ``for which confidential treatment may be requested,''
in proposed paragraph (e)(3)(ii)(B) is not in the current rule. This
proposed new language is intended to clarify that an EDGAR filer may
request confidential treatment, but that ultimately whether any filed
material is confidential is determined pursuant to applicable law,
including but not limited to the Freedom of Information Act,\208\ and
Commission rules governing requests for confidential treatment.\209\
The Commission is proposing to make analogous changes to the first
sentence of paragraph (d)(2) of Rule 18a-7. 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. However, the Commission is proposing to
amend current paragraph (c)(3) of Rule 17a-12 (which is proposed to be
re-designated as paragraph (c)(4)) to add language to state that an
EDGAR filer may request confidential treatment, but that ultimately
whether any filed material is confidential is determined pursuant to
applicable law, including but not limited to the Freedom of Information
Act,\210\ and Commission rules governing requests for confidential
treatment.\211\
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    \208\ See generally 5 U.S.C. 552.
    \209\ See 17 CFR 240.24b-2.
    \210\ See id.
    \211\ See 17 CFR 240.24b-2.
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    Currently, a firm filing annual reports with the Commission under
Rules 17a-5, 18a-7, and 17a-12 using EDGAR submits the information
contained in a ``facing page'' to the annual reports by completing an
electronically fillable form on the EDGAR system.\212\ The inputted
information, which includes information about the firm submitting the
filing and about the filing itself, is subsequently converted into a
custom XML-based data language specific to the Form X-17A-5 Part III
facing page.\213\ The documents required to be filed are then uploaded
electronically. Currently, the documents are generally uploaded as PDF
documents. 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.\214\
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    \212\ See EDGAR Filer Manual (Volume II) version 64 (Dec. 2022),
at 8.2.20. The EDGAR Filer Manual is available at http://www.sec.gov/info/edgar/edmanuals.htm. See also Information for EDGAR
Filers, available at http://www.sec.gov/info/edgar.shtml#guidance.
    \213\ See EDGAR X-17A-5 Part III Technical Specification,
available at https://www.sec.gov/info/edgar/specifications/form-x-17a-5-xml-tech-specs.htm.
    \214\ See 17 CFR 232.11.
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    Under the proposal, firms filing annual reports or annual
supplemental reports with the Commission under Rules 17a-5, 18a-7, and
17a-12 would be required to apply machine-readable Inline XBRL data
``tags'' to the disclosures contained in those documents before filing
them through EDGAR. These data tags can include numerical detail tags
(which are used for tagging individual data points) for 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. In complying with the proposed
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. The Commission expects the
proposed structuring requirements would provide informational benefits
to users of the disclosures provided in the reports. Specifically, the
Commission believes requiring the annual and supplemental reports to be
structured would make the information included on the reports more
readily accessible for retrieval, aggregation, and comparison across
different broker-dealers, 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.\215\ For the
confidential portion of the report, such benefits would redound
indirectly to investors and markets through more timely and detailed
supervision of filers.

For the public portion of the report, such as the Statement of
Financial Condition and the notes thereto, such benefits would redound
directly to public users of the data, which could include investors,
analysts, and financial media, as well as indirectly to investors and
markets through more timely and detailed supervision of filers.\216\
Evidence from the Commission's XBRL requirement for public companies
indicates that enhanced accessibility to financial and related
information may be particularly important for disclosures made by
smaller broker-dealers, as investors in small companies have been
observed to prefer the XBRL filings made by those companies over the
non-XBRL version of those filings.\217\ In addition, the proposed
structured data requirement would enable EDGAR to perform technical
validations (i.e., programmatic checks to ensure the documents are
appropriately standardized, formatted, and complete) upon intake of the
reports, thus potentially improving the 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).
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    \215\ For further discussion of the expected benefits of the
proposed structuring requirements, see infra sections VII.A and
X.C.1.b.
    \216\ Unlike annual audited financial statements filed with the
Commission by broker-dealers, SBSDs, and MSBSPs, all of the annual
audited financial statements OTC derivatives dealers filed under
paragraph (b) of Rule 17a-12 are confidential.
    \217\ See Yu Cong, Hui Du, and Miklos A. Vasarhelyi, ``Are XBRL
Files Being Accessed? Evidence from the SEC EDGAR Log File
Dataset,'' Journal of Information Systems 32(3), 23-29 (concluding
that ``small company investors not only access XBRL files but also
prefer them to the non-XBRL files when both are available to
download for a filing''). Because the Commission has only recently
begun requiring Inline XBRL (rather than ``exhibit-only'' XBRL)
reporting, most empirical observations are based on samples with
exhibit-only XBRL requirements.
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    For example, Commission staff could leverage the machine-
readability of the computational schedules to automatically flag any
mathematical inconsistencies or calculation errors therein. Market
participants (such as customers, analysts, or other broker-dealers)
could also benefit from direct use of the machine-readable disclosures;
for example, analysts could leverage the machine-readability of
financial statements to determine which broker-dealers have
comparatively high proportions of liabilities due to affiliates.
Without the proposed structured data requirements, performing these
types of analyses would need to be done manually, such as by gathering
the current and former financial statements for each broker-dealer and
entering all financial line items of interest into databases, resulting
in a significantly less efficient and precise process.
    The proposed Inline XBRL requirement would apply to all disclosures
required by Form X-17A-5 Part III other than disclosures required on
the facing page. 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. Other exhibits filed on Form X-17A-5 Part
III include reports such as compliance or exemption reports that
feature extended narrative descriptions, and whereas custom XML data
languages are only technically suitable to accommodate brief narrative
descriptions, Inline XBRL is technically suitable to accommodate longer
narrative descriptions with presentation capabilities that preserve
human-readability while maintaining machine-readability.\218\
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