\487\ 3,218 broker-dealers x 6 hours = 19,308 hours; 3,218
broker-dealers x $1,200 = $3,861,600. 9 SBSDs and MSBSPs x 6 hours =
54 hours; 9 SBSDs and MSBSPs x $1,200 = $10,800.
    \488\ 3,218 broker-dealers x 4 hours = 12,872 hours; 3,218
broker-dealers x $800 = $2,574,400. 9 SBSDs and MSBSPs x 4 hours =
36 hours; 9 SBSDs and MSBSPs x $800 = $7,200.
---------------------------------------------------------------------------

b. Amendments Relating to the FOCUS Report
Currently Approved Burden Estimate
    Rules 17a-5, 17a-12, and 18a-7 require broker-dealers, OTC
derivatives dealers, and SBS Entities, respectively, to file unaudited
financial information on the FOCUS Report (Form X-17A-5 Part II, IIA,
or IIC) on a monthly or quarterly basis.\489\ Under Rule 17a-5, each
broker-dealer is estimated to have an annual reporting burden of 12
hours, resulting in an annual industry burden of 44,148 hours.\490\
Under Rule 17a-12, each OTC derivatives dealer is estimated to have an
annual reporting burden of 80 hours, resulting in an annual industry
burden of 160 hours.\491\ Under Rule 18a-7, each MSBSP is estimated to
have an annual reporting burden of 61.33 hours, resulting in an annual
industry burden of 245.33 hours, each SBSD that is not prudentially
regulated is estimated to have an annual reporting burden of 245.33
hours, resulting in an annual industry burden of 1,472 hours, and each
SBSD that is prudentially regulated is estimated to have an annual
reporting burden of 28 hours, resulting in an annual industry burden of
700 hours.\492\
---------------------------------------------------------------------------

    \489\ See 17 CFR 240.17a-5; 17 CFR 240.17a-12; 17 CFR 240.18a-7.
    \490\ See Supporting Statement for the Paperwork Reduction Act
Information Collection Submission for Rule 17a-5 (July 29, 2021),
available at https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202107-3235-022.
    \491\ See Supporting Statement for the Paperwork Reduction Act
Information Collection Submission for Rule 17a-12 (Jan. 11, 2022),
available at https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202110-3235-010.
    \492\ See Supporting Statement for the Paperwork Reduction Act
Information Collection Submission for Rule 18a-7 (Apr. 15, 2021),
available at https://www.reginfo.gov/public/do/DownloadDocument?objectID=110893201.
---------------------------------------------------------------------------

Proposed Revision to Burden Estimate
    The Commission proposes a number of amendments to the FOCUS Report.
First, it proposes corrective and clarifying amendments to FOCUS Report
Part II. The Commission estimates that the proposed amendments will
result in an initial burden of five hours on each Part II filer so
firms can familiarize themselves with the amendments to FOCUS Report
Part II. The Commission believes that these proposed amendments will
generally either have no impact on or reduce the ongoing burden on the
vast majority of filers because they will generally reduce questions
about where and how to report items on the form. However, because the
proposed amendments require stand-alone swap dealers and stand-alone
introducing brokers to complete a new section of FOCUS Report Part II
that these types of firms were not previously required to complete
(i.e., Computation of CFTC Minimum Capital Requirements), the
Commission estimates that the proposed amendments are likely to result
in an ongoing annual burden of 1 hour per stand-alone swap dealer or
stand-alone introducing broker.
    The Commission estimates that there are 460 broker-dealers or
stand-alone SBS Entities filing FOCUS Report Part II, resulting in an
estimated industry-wide initial burden of 2,300 hours.\493\ The
Commission estimates that for Part II filers that are not stand-alone
swap dealers, the proposed amendments generally will not change the
estimated ongoing burden imposed by FOCUS Report Part II, as amended.
The Commission estimates that there are 4 domestic stand-alone swap
dealers and 103 domestic stand-alone introducing brokers filing FOCUS
Report Part II, resulting in an estimated industry-wide ongoing burden
of 107 hours per year.\494\
---------------------------------------------------------------------------

    \493\ 5 hours x 460 Part II filers = 2,300 hours. These internal
hours likely will be performed by a compliance manager.
    \494\ 1 hour x 107 Part II filers that are domestic stand-alone
swap dealers or stand-alone introducing brokers = 107 hours. These
internal hours likely will be performed by a compliance manager.
This burden estimate may be duplicative since the CFTC estimates
that swap dealers and introducing brokers elect to file the CFTC's
Form 1-FR instead of electing to file the SEC's FOCUS Report. See
Supporting Statement for Revised Information Collections--OMB
Control Number 3038-0024 (July 1, 2022), available at https://www.reginfo.gov/public/do/DownloadDocument?objectID=122832501.
---------------------------------------------------------------------------

    Second, the Commission proposes to align the text in FOCUS Report
Part IIC with the text in FFIEC Form 031. These proposed amendments are
expected to result in an initial burden of five hours on each bank SBS
Entity so that firms can compare the revised FOCUS Report Part IIC with
FFIEC Form 031. However, these proposed amendments are expected to
generally either have no impact on or reduce the ongoing burden on bank
SBS Entities because they will generally reduce questions about how to
complete FOCUS Report Part IIC consistently with FFIEC Form 031. The
Commission estimates that there are 31 bank SBS Entities filing FOCUS
Report Part IIC, resulting in an estimated industry-wide initial burden
of 155

hours.\495\ The Commission estimates that the proposed amendments will
not change the estimated ongoing annual burden imposed by FOCUS Report
Part IIC, as amended.
---------------------------------------------------------------------------

    \495\ 5 hours x 31 Part IIC filers = 155 hours. These internal
hours likely will be performed by a compliance manager.
---------------------------------------------------------------------------

    Third, the Commission proposes to require only two of the three
signature lines to be signed on the FOCUS Report's cover page, and
allows these signatures to be signed either manually or electronically.
This proposed amendment is expected to result in an initial burden of 1
hour on each filer so that the firm can review the standards for an
electronic signature on the FOCUS Report Part II, IIA, or IIC, as
applicable. However, this proposed amendment is expected to generally
either have no impact on or reduce the ongoing burden on FOCUS Report
filers, because they will not be required to furnish as many signatures
as before the amendment, and it may be easier to prepare electronic
signatures rather than manual signatures since firms will already be
familiar with the process and can easily obtain these signatures while
working remotely. The Commission estimates that there are 3,547 broker-
dealers, stand-alone SBS Entities, and bank SBS Entities filing FOCUS
Report Parts II, IIA, or IIC, resulting in an estimated industry-wide
initial burden of 3,547 hours.\496\ The Commission estimates that the
proposed amendments will not change the estimated ongoing annual burden
imposed by FOCUS Report Parts II, IIA, and IIC, as proposed to be
amended.
---------------------------------------------------------------------------

    \496\ 1 hour x 3,547 Part II, IIC, and IIA filers = 3,547 hours.
These internal hours likely will be performed by a compliance
manager.
---------------------------------------------------------------------------

    Finally, the Commission proposes to require OTC derivatives dealers
to file the FOCUS Report electronically on the SEC eFOCUS system
instead of in paper. The Commission estimates that this proposed
amendment will result in an initial burden of 15 hours on each OTC
derivatives dealer so that the firm can familiarize itself with the SEC
eFOCUS system. However, this proposed amendment is expected to
generally either have no impact on or reduce the ongoing burden on OTC
derivatives dealers, because filing the FOCUS Report electronically is
an automated process as compared to filing by paper. Therefore, the
Commission estimates that there are 3 OTC derivatives dealers,
resulting in an estimated industry-wide initial burden of 45
hours.\497\ The Commission estimates that the proposed amendment will
not change the estimated ongoing annual burden imposed by Rule 17a-12.
---------------------------------------------------------------------------

    \497\ 15 hours x 3 OTCDDs = 45 hours. These internal hours
likely will be performed by a compliance manager.
---------------------------------------------------------------------------

10. Rule 17h-2T
    The current PRA burden for Rule 17h-2T does not include a burden
for sending the risk assessment reports to the Commission. As broker-
dealers that are required to file reports under Rule 17h-2T are also
required to file annual reports under Rule 17a-5,\498\ the Commission
is not estimating an additional burden for becoming familiar with the
EDGAR system and for monitoring changes in EDGAR filing requirements
attributable to the proposed amendments to Rule 17h-2T.
---------------------------------------------------------------------------

    \498\ See supra section IX.D.9.
---------------------------------------------------------------------------

    Under the proposal, broker-dealers that are required to file
reports under Rule 17h-2T would be required to tag the financial
statements included with the report in Inline XBRL. Because these
broker-dealers are also required to tag annual reports under Rule 17a-5
in Inline XBRL, the proposed Inline XBRL requirement for reports under
Rule 17h-2T would represent additional (quarterly) iterations of that
compliance process, as abbreviated to reflect that Form 17-H requires
only financial statements (and not any supplemental reports or other
related filings) to be tagged in Inline XBRL, and that Form 17-H filers
may omit the statement of cash flows and the footnotes to the financial
statements. Thus, the Commission estimates an average additional burden
of 1 hour per response and a total industrywide burden of 964 hours per
year for Form 17-H filers to structure their financial statements in
Inline XBRL.\499\
---------------------------------------------------------------------------

    \499\ 1 hour per response x 4 responses per year x 241
respondents = 964 hours. Rule 17h-2T requires fourth quarter
financial statements in addition to cumulative annual financial
statements. See 17 CFR 240.17h-1. The Commission has not added
burden hours associated with the proposed custom XML requirements
for the facing page and Part II of Form 17-H, because those
requirements are currently in effect for Form 17-Hs that are filed
on EDGAR, and nearly all Form 17-H filers (97% as of Dec. 31, 2021)
file Form 17-H on EDGAR. See infra Section X.C.2.b for further
detail on structured data compliance costs, including estimated cost
ranges and factors underlying expected variance in structured data
costs across different filers. For example, we expect the Form 17-H
filers affiliated with public companies that are subject to Inline
XBRL requirements would incur lower structured data costs than other
Form 17-H filers. See infra text accompanying note 647. We have
accounted for this expected variance in the calculation of average
burden figures presented in this section. Consistent with structured
data burden estimates in prior Commission releases, the burden
estimates here assume Inline XBRL tagging would be done by a
compliance attorney. See supra note 485.
---------------------------------------------------------------------------

11. Rule 17a-19 and Form X-17A-19
Currently Approved Burden Estimate
    Rule 17a-19 requires every national securities exchange and
registered national securities association to file a Form X-17A-19 with
the Commission and SIPC within five business days of the initiation,
suspension, or termination of any member. The Commission currently
estimates that Form X-17A-19 would take 0.25 hours to prepare,
resulting in an annual industry-wide burden of 102 hours.\500\
---------------------------------------------------------------------------

    \500\ See Supporting Statement for the Paperwork Reduction Act
Information Collection Submission for Rule 17A-19 and Form X-17A-19
(Sept. 3 2020), available at https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202009-3235-002.
---------------------------------------------------------------------------

Proposed Revision to Burden Estimate
    The 25 respondents who file Form X-17A-19 would need to familiarize
themselves with the EDGAR system. As stated above with respect to Rule
17a-5, 17a-12, and 18a-7, the Commission estimates the one-time
reporting burden of becoming familiar with the EDGAR system is
approximately 16 hours.\501\ Accordingly, the Commission estimates that
the one-time industry-wide reporting burden would be approximately 400
hours.\502\
---------------------------------------------------------------------------

    \501\ See supra section IX.D.9.a.
    \502\ 16 hours x 25 respondents = 400 hours. The Commission
assumes all respondents would use fillable web forms on EDGAR to
input their Form X-17A-19 disclosures (which EDGAR would
subsequently convert into a custom XML data language), and therefore
this reflects time for respondents to familiarize themselves with
the forms and does not include any added burden hours associated
with the proposed custom XML requirement for Form X-17A-19.
---------------------------------------------------------------------------

12. Rule 3a71-3(d)(1)(vi)
Currently Approved Burden Estimate
    Currently, Exchange Act Rule 3a71-3(d)(1)(vi) requires the
Registered Entity to file the ANE Exception Notice by submitting it to
the electronic mailbox specified on the Commission's website. When the
Commission originally adopted the ANE Exception Notice requirement, it
estimated that each Registered Entity would file one ANE Exception
Notice with the Commission and that it would take 30 minutes to file
each ANE Exception Notice, resulting in an industry-wide initial one-
time burden of 12 hours.\503\
---------------------------------------------------------------------------

    \503\ See Cross-Border Adopting Release, 85 FR at 6340-41. See
also Supporting Statement for the Paperwork Reduction Act
Information Collection Submission for the Rule 3a71-3 Security-Based
Swap Dealer De Minimis Counting Exception for Certain Transactions
Arranged, Negotiated or Executed in the United States (Jan. 7, 2020)
note 23 and accompanying text and section 15.d, available at https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201912-3235-011.

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

Proposed Revision to Burden Estimate
    The Commission does not expect that changing the manner of filing
the ANE Exception Notice from an email filing to an EDGAR filing will
change this estimated one-time burden. The ability to withdraw an ANE
Exception Notice via EDGAR as proposed in this release will result in
an additional one-time burden. The Commission estimates that
withdrawing an ANE Exception Notice electronically on EDGAR will incur
the same burden as filing the initial ANE Exception Notice
electronically on EDGAR. If each Registered Entity files one withdrawal
of its ANE Exception Notice, the Commission estimates that would result
in an industry-wide initial one-time burden of 12 hours.\504\
---------------------------------------------------------------------------

    \504\ 24 Registered Entities x \1/2\ hour = 12 hours.
---------------------------------------------------------------------------

13. Rule 15fi-3(c)
Currently Approved Burden Estimate
    When the Commission originally adopted Rule 15fi-3, it expected
there to be only a minimal, if any, initial burden of designing a
system for submitting valuation dispute notices.\505\ The Commission
also believed that the associated ongoing hourly burden of preparing
and submitting such notices would be minimal.\506\ The Commission noted
that, until SBS Entities were registered with the Commission, it was
difficult for the Commission to determine the typical number of
valuation disputes meeting the applicable thresholds that SBS Entities
would be required to submit on an annual basis.\507\ The Commission had
estimated that each SBS Entity will spend on average of 24 hours each
year complying with the requirement to prepare and submit notices of
valuation disputes, for an estimated average annual burden of 1,320
hours in the aggregate for all 55 SBS Entities.\508\
---------------------------------------------------------------------------

    \505\ See Risk Mitigation Adopting Release, 85 FR at 6385.
    \506\ Id. at 6385-86.
    \507\ Id.
    \508\ This 1,320-hour annual burden reflects the currently
approved information collection burden estimate for Rule 15fi-3(c);
see Supporting Statement for the Paperwork Reduction Act Information
Collection Submission for Rules 15Fi-3 through 15Fi-5--Risk
Mitigation Techniques for Uncleared Security-Based Swaps (Aug. 18,
2021), available at https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202108-3235-011. Additionally, when the
Commission adopted Rule 15fi-3(c) it noted that, although it
believed that the time required to submit amendments to existing
notices is likely included in the 24 hour estimate, it was
``conservatively increasing that estimate by 25% to account for the
submission of amended notices. As such, [the Commission estimated
that] SBS Entities will spend on average of 30 hours each year
complying with this requirement, for an estimated average annual
burden of 1,650 hours in the aggregate for all 55 respondents.'' See
Risk Mitigation Adopting Release, 85 FR at 6386.
---------------------------------------------------------------------------

Proposed Revision to Burden Estimate
    The Commission believes that the proposed amendments to Rule 15fi-3
related to EDGAR submission would not have an impact on the burdens
associated with the existing collection of information. In particular,
Rule 15fi-3(c) currently requires SBS Entities to submit security-based
swap valuation dispute notices to the Commission ``in a form and manner
acceptable to the Commission.'' Under current practice, staff has made
available to SBS Entities two options for submitting these notices (and
any amendments) which includes either: (1) an electronic submission
using EDGAR or (2) submission to a dedicated Commission email address.
The Commission is now proposing to amend Rule 15fi-3(c) to
affirmatively require SBS Entities to submit these notices (and any
amendments) to the Commission electronically in EDGAR in a custom XML
data language.
    SBS Entities will already have access to EDGAR by virtue of using
the system to submit their applications for registration on either
Forms SBSE, SBSE-A, or SBSE-BD, and to submit their certification for
registration on Form SBSE-C. As a result, SBS Entities would not incur
any additional burden associated with obtaining access to EDGAR for
purposes of submitting dispute notices given that all such filers
should already have an active CIK. With respect to the proposed custom
XML structuring requirement for the dispute notices, SBS Entities would
be able to comply by inputting their disclosures into a fillable web
form on EDGAR rather than structuring their disclosures in custom XML
themselves. As a result, SBS Entities would not incur any additional
burden associated with the proposed custom XML structuring requirement
for dispute notices.\509\
---------------------------------------------------------------------------

    \509\ See infra section X.C.2.b.
---------------------------------------------------------------------------

14. Rule 15fk-1(c)(2)(ii)(A)
Currently Approved Burden Estimate
    Under current Rule 15fk-1(c), the CCO of a SBS Entity is required
to prepare and submit a CCO report the Commission. The Commission
previously estimated that these reports would require on average 93
hours per respondent per year for an ongoing annual burden of 5,115
hours.\510\
---------------------------------------------------------------------------

    \510\ See Business Conduct Standards for Security- Based Swap
Dealers and Major Security-Based Swap Participants, Exchange Act
Release No. 77617 (Apr. 14, 2016), 81 FR 29960, 30096 (May 13, 2016)
(``Business Conduct Release'').
---------------------------------------------------------------------------

Proposed Revision to Burden Estimate
    The Commission recognizes that the proposed amendments to Rule
15fk-1(c) may potentially impose certain burdens on respondents.
Although the information to be included in the CCO report pursuant to
Rule 15fk-1(c) would not change, the proposed amendment would require
respondents to submit the CCO report electronically with the Commission
through EDGAR in Inline XBRL.
    The Commission estimates that no SBS Entities would be first-time
EDGAR users needing to obtain EDGAR access credentials. Thus, the
internal time burden associated with completing a Form ID application
to gain access to EDGAR would not apply to SBS Entities.\511\
---------------------------------------------------------------------------

    \511\ See supra section IX.D.1.
---------------------------------------------------------------------------

    SBS Entities would incur a burden to submit the CCO report in
Inline XBRL. Because the CCO reports consist of a limited number of
textual narrative sections (compared to the various sets of numerical
values that comprise financial statements, which take significantly
longer to tag), the Commission estimates that, on average, an SBS
Entity would spend 1.5 internal burden hours and $600 in external costs
(e.g., the cost to license and renew Inline XBRL compliance software
and/or services) to tag its CCO report in Inline XBRL in the initial
year of compliance, and 1 internal burden hour and $400 in external
costs in subsequent years.\512\ Accordingly, the Commission estimates
that the total burden associated with compliance with Rule 15fk-1(c)
would be an annual hour burden of 94.5 hours per respondent in the
initial year and 94 hours per respondent in subsequent years, and an
annual cost burden of $600 per respondent in the initial year and $400
per respondent in subsequent years, yielding an industry-wide annual
burden of 4,630.5 hours and $29,400 in the first year and 4,606 hours
and $19,600 in subsequent years.\513\
---------------------------------------------------------------------------

    \512\ See infra section X.C.2.b for further detail on structured
data compliance costs, including estimated cost ranges and factors
underlying expected variance in structured data costs across
different filers. For example, we expect the SBS Entities affiliated
with public companies that are subject to Inline XBRL requirements
would incur lower structured data costs than other SBS Entities. See
infra note 662 and accompanying text. We have accounted for this
expected variance in the calculations of average burden and cost
figures presented in this section. Consistent with structured data
burden estimates in prior Commission releases, the burden estimates
here assume Inline XBRL tagging would be done by a compliance
attorney. See supra note 485.
    \513\ The annual aggregate burden hour estimate for the initial
year of compliance is based on the following calculation: (93 hours
+ 1.5 hours) x (50 SBS Entities) = 4,725 hours. The annual aggregate
burden hour estimate for the subsequent years of compliance is based
on the following calculation: (93 hours + 1 hours) x (50 SBS
Entities) = 4,700 hours. The annual aggregate external cost estimate
for the initial year of compliance is based on the following
calculation: $600 x (50 SBS Entities) = $30,000. The annual
aggregate external cost estimate for subsequent years of compliance
is based on the following calculation: $400 x (50 SBS Entities) =
$20,000.

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

15. Proposed Amendments to Regulation S-T
    The Commission is proposing to require that the annual reports
filed or submitted with the Commission under Rules 17a-5, 17a-12, and
18a-7, and the reports filed or submitted with the Commission under
Rules 17a-19 and 15fk-1(c) be filed or submitted electronically with
the Commission using the EDGAR system. The Commission also is proposing
to require that the notices under Rules 3a71-3(d)(1)(vi) and 15fi-3(c),
including withdrawals and amendments, respectively, be made using the
EDGAR system. In order to implement these requirements, the Commission
is proposing amendments to Rule 101 of Regulation S-T. In addition, the
Commission is proposing that some or all of the annual reports filed or
submitted with the Commission under Rules 17a-5, 17a-12, and 18a-7, and
the reports filed or submitted with the Commission under Rule 15fk-
1(c), be structured in Inline XBRL. In order to implement these
requirements, the Commission is proposing amendments to Rule 405 of
Regulation S-T.
    While the amendments would revise Regulation S-T, the collection of
information requirements are reflected in the burden hours estimated
for Rule 3a71-3, 15fi-3, 15fk-1, 17a-5, 18a-7, 17a-12, Rule 17h-2T, and
Form ID. The rules in Regulation S-T should not impose any separate
burden, and accordingly the estimated burden for Regulation S-T as
proposed to be amended would not change. Consistent with historical
practice, the Commission is retaining a burden estimate of one hour for
Regulation S-T for administrative convenience. A firm that does not
already have log-in credentials for EDGAR will need to submit a request
to the Commission in order to gain access to the EDGAR system.\514\
---------------------------------------------------------------------------

    \514\ See supra section IX.D.9. (estimating a one-time industry-
wide burden of 29,944 hours for broker-dealers to acquire EDGAR
access and familiarize themselves with EDGAR).
---------------------------------------------------------------------------

E. Collection of Information Is Mandatory

    All collections of information pursuant to the proposed rules would
be mandatory, or mandatory except to the extent an exception is
available.

F. Confidentiality of Responses to Collection of Information

    For all Covered SRO Forms, no assurance of confidentiality is given
by the Commission with respect to responses made on such forms. While
Rule 24b-2 allows entities to seek confidential treatment, the
Commission expects that all information will be public and that
confidential treatment will not be available. Any person may make
written objection to the public disclosure of any information contained
in such forms in accordance with the procedures set forth in Rule 24b-
2(b).\515\
---------------------------------------------------------------------------

    \515\ 17 CFR 240.24b-2(b).
---------------------------------------------------------------------------

    The information collected pursuant to Rule 3a71-3(d)(1)(vi) is
public information to assist Relying Entities and their affiliates in
determining whether they have satisfied the ANE Exception's notice
requirement and in monitoring their progress toward the ANE Exception's
cap on inter-dealer security-based swaps. The proposed amendment to
Rule 3a71-3(d)(1)(vi) provides that notices and withdrawals shall be
publicly disseminated through the Commission's EDGAR system. Because
reliance on the ANE Exception which requires filing of an ANE Exception
Notice is voluntary, the Commission does not expect that a Registered
Entity seeking to facilitate the exception would include information
that could not be publicly disclosed in the notices or withdrawals
required by the proposed amendment to Rule 3a71-3(d)(1)(vi) or would
object to the public disclosure of information contained in such
notices or withdrawals.
    Rule 15fi-3(c) requires an SBS Entity to promptly notify the
Commission and any applicable prudential regulator of any security-
based swap valuation dispute in excess of $20,000,000 (or its
equivalent in any other currency) if not resolved within: (1) three
business days, if the dispute is with a counterparty that is an SBS
Entity; or (2) five business days, if the dispute is with a
counterparty that is not an SBS Entity. The rule also requires SBS
Entities to notify the Commission and any applicable prudential
regulator, if the amount of any security-based swap valuation dispute
that was the subject of a previous notice increases or decreases by
more than $20,000,000 (or its equivalent in any other currency), at
either the transaction or portfolio level. These amendments are
required to be provided to the Commission, and any applicable
prudential regulator, no later than the last business day of the
calendar month in which the applicable security-based swap valuation
dispute increases or decreases by the applicable dispute amount. To the
extent that the Commission receives confidential information pursuant
to this collection of information that is otherwise not publicly
available, including in connection with examinations or investigations,
the SBS Entity can request the confidential treatment of the
information.\516\ If such a confidential treatment request is made, the
Commission anticipates that it will keep the information confidential,
subject to the provisions of applicable law; whether any material is
confidential is determined pursuant to applicable law, including but
not limited to the Freedom of Information Act and Commission rules
governing requests for confidential treatment.\517\
---------------------------------------------------------------------------

    \516\ See 17 CFR 200.83.
    \517\ See, e.g., 5 U.S.C. 552 et seq.; 15 U.S.C. 78x (governing
the public availability of information obtained by the Commission).
See also Risk Mitigation Adopting Release 85 FR at 6389-90.
---------------------------------------------------------------------------

    With respect to the other information collected under the proposed
rule amendments and new rules, the firm can request the confidential
treatment of the information.\518\ If such a confidential treatment
request is made, the Commission anticipates that it will keep the
information confidential, subject to the provisions of applicable law;
whether any material is confidential is determined pursuant to
applicable law, including but not limited to the Freedom of Information
Act and Commission rules governing requests for confidential
treatment.\519\
---------------------------------------------------------------------------

    \518\ See 17 CFR 200.83. For Rule 15fk-1(c)(2)(ii)(A), SBS
Entities may request confidential treatment for their CCO reports
pursuant to Exchange Act Rule 83.
    \519\ See, e.g., 5 U.S.C. 552 et seq.; 15 U.S.C. 78x (governing
the public availability of information obtained by the Commission).
---------------------------------------------------------------------------

G. Retention Period for Recordkeeping Requirements

    For all Covered SRO Forms and for proposed Rule 19b-4(e), records
of these collections of information must be retained for at least five
years, the first two years in an easily accessible place, pursuant to
Rule 17a-1.\520\ The collection of information outlined in Rule 3a71-
3(d)(1)(vi) is a reporting requirement and not a recordkeeping
requirement; there is no retention requirement in connection with that
collection of information. SBS Entities subject to 17 CFR 240.17a-4(b)
or 17 CFR 240.18a-6(b) must retain notices and amendments required by
Rule 15fi-3(c) for not less than three years, the

first two years in an easily accessible place.\521\
---------------------------------------------------------------------------

    \520\ 17 CFR 240.17a-1.
    \521\ See 17 CFR 17a-4(b)(1), 17 CFR 18a-6(b)(1)(i), and 17 CFR
18a-6(b)(2)(i).
---------------------------------------------------------------------------

    Rule 17a-4 specifies the required retention periods for a broker-
dealer, including an OTC derivatives dealer.\522\ Rule 18a-6 specifies
the required retention periods for non-broker-dealer SBSDs and non-
broker-dealer MSBSPs.\523\ Under these two rules, many of the required
records must be retained for three years, while certain other records
must be retained for longer periods.
---------------------------------------------------------------------------

    \522\ 17 CFR 240.17a-4.
    \523\ 17 CFR 240.18a-6.
---------------------------------------------------------------------------

H. Request for Comments

    Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits
comment to:
    92. Evaluate whether the proposed collection of information is
necessary for the proper performance of our functions, including
whether the information shall have practical utility;
    93. Evaluate the accuracy of our estimate of the burden of the
proposed collection of information;
    94. Determine whether there are ways to enhance the quality,
utility, and clarity of the information to be collected; and
    95. Evaluate whether there are ways to minimize the burden of
collection of information on those who are to respond, including
through the use of automated collection techniques or other forms of
information technology.
    Persons submitting comments on the collection of information
requirements should direct them to the Office of Management and Budget,
Attention: Desk Officer for the Securities and Exchange Commission,
Office of Information and Regulatory Affairs, Washington, DC 20503, and
should also send a copy of their comments to Secretary, Securities and
Exchange Commission, 100 F Street NE, Washington, DC 20549-1090, with
reference to File Number S7-08-23. Requests for materials submitted to
OMB by the Commission with regard to this collection of information
should be in writing, with reference to File Number S7-08-23 and be
submitted to the Securities and Exchange Commission, Office of FOIA/PA
Services, 100 F Street NE, Washington, DC 20549-2736. As OMB is
required to make a decision concerning the collections of information
between 30 and 60 days after publication, a comment to OMB is best
assured of having its full effect if OMB receives it within 30 days of
publication.

X. Economic Analysis

    The Commission is mindful of the costs imposed by and the benefits
obtained from our rules. Section 2(b) of the Securities Act,\524\
section 3(f) of the Exchange Act,\525\ and section 2(c) of the
Investment Company Act of 1940 \526\ require us, when engaging in
rulemaking that requires us to consider or determine whether an action
is necessary or appropriate in or consistent with the public interest,
to consider, in addition to the protection of investors, whether the
action will promote efficiency, competition and capital formation. In
addition, section 23(a)(2) of the Exchange Act requires us, when
adopting rules under the Exchange Act, to consider the impact that any
new rule would have on competition and to not adopt any rule that would
impose a burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Exchange Act.\527\
---------------------------------------------------------------------------

    \524\ 15 U.S.C. 77b(b).
    \525\ 15 U.S.C. 78c(f).
    \526\ 15 U.S.C. 80a-2(c).
    \527\ 15 U.S.C. 78w(a)(2).
---------------------------------------------------------------------------

    Where possible, we have attempted to quantify the costs and
benefits expected to result from the proposed amendments to the
submission or posting requirements. However, in some cases we have been
unable to quantify the economic effects because we lack the information
necessary to provide an estimate. For example, we do not quantify the
benefit to the general public of improved access to public filings made
available in structured format. We encourage commenters to provide data
that may be relevant for quantifying impacts we have not quantified.
    This section discusses the benefits and costs of the proposed
amendments, as well as their potential effects on efficiency,
competition, and capital formation. Some of the proposed amendments
are, however, technical, so they will likely not have significant
economic effects.\528\
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    \528\ As noted in section II.G. 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 proposed to be submitted to the Commission electronically.
---------------------------------------------------------------------------

A. Broad Economic Considerations

    Existing Commission rules require or provide the option for the
filing in paper of certain forms and filings, including applications of
entities seeking to register with the Commission as a national
securities exchange (or seeking an exemption from such registration
based on limited volume) or as a national securities association as
well as amendments to these initial applications, reports regarding the
listing and trading of new derivative securities products, clearing
agency registration and updates, annual broker-dealer audit reports and
risk assessment reports, and certain clearing agency supplemental
materials. Other Commission rules do not specify the format in which a
requirement should be satisfied, such as notices of changes in SRO
membership.
    By requiring the electronic submission on the Commission's EDGAR
system or website posting of: (1) the Covered SRO Forms; (2) the
information posted under Rule 19b-4(e); (3) the annual reports and
related annual filings filed by broker-dealers, OTC derivatives
dealers, SBSDs, and MSBSPs; and (4) other notices and reports from
SBSDs, MSBSPs, and Registered Entities (``the affected documents''),
and by requiring certain of the affected documents to be provided,
where appropriate, in a structured, machine-readable data language, the
proposed amendments seek to streamline the submission process, and
facilitate the transmission and effective use of submitted information.
The proposed amendments to certain Exchange Act rules and the affected
documents are expected to increase the efficiency of, and remove
certain costs related to ongoing compliance with, the existing
requirements. The discussion below addresses the potential economic
effects of the proposed amendments, including their likely costs and
benefits as well as the likely effects of the proposed amendments on
efficiency, competition, and capital formation, relative to the
economic baseline, which is comprised of the filing practices in
existence today.
    We anticipate that the proposed amendments that would require
electronic submission or posting of documents that are currently filed
in paper would not result in an increase in filing costs, and in some
cases result in cost savings to reporting entities on an ongoing basis
as a result of overall reduction in internal time burdens and the
elimination of the printing and mailing expenses associated with paper
filing. As noted,\529\ we recognize that entities that do not presently
use EDGAR to comply with other reporting obligations would incur an
incremental cost of initial transition to electronic submission on
EDGAR. However, notwithstanding these initial transition costs, we
anticipate that reporting entities would realize cost savings from

electronic submission on EDGAR. With respect to the proposed structured
data requirements, and specifically the proposed Inline XBRL reporting
requirements, we recognize that entities subject to Inline XBRL
reporting requirements under the proposed rules would incur ongoing
costs associated with the requirement to encode and report information
in Inline XBRL, and entities that do not presently use Inline XBRL
would incur additional costs associated with the initial implementation
of Inline XBRL compliance processes and/or the purchase of third-party
Inline XBRL filing preparation services or software.\530\
---------------------------------------------------------------------------

    \529\ See supra section IX.
    \530\ See infra section X.C.2.b. We do not believe similar
structured data implementation costs would result from most of the
proposed custom XML requirements, because affected entities would
have the option of inputting their information in fillable forms,
which EDGAR would then convert into the custom XML data language.
However, we would expect structured data implementation costs would
arise in connection with the custom XML requirement for information
posted under Rule 19b-4(e), because the SRO would post the
information on its website rather than on the EDGAR system (and its
fillable form capabilities), and in connection with the custom XML
requirements on Forms 1 and CA-1, because we expect exchanges and
clearing agencies would have the requisite sophistication to encode
their disclosures in custom XML and submit the custom XML documents
to EDGAR directly (rather than manually completing lengthy fillable
forms to be converted into custom XML documents). See infra section
X.C.2.b; see also supra section IX.D.6.
---------------------------------------------------------------------------

    Compared to paper filing, electronic submission or posting
information directly to a website can expedite the availability of
public disclosures. Improving the speed of disclosure to the public
improves the price efficiency of markets by improving the timeliness of
information available to market participants. Electronic submission or
posting would also facilitate the Commission's ability to oversee
compliance with the securities laws and its oversight of securities
markets making this information available to the Commission quicker,
with added and more accessible functionality for Commission staff to
review, analyze, and respond to, as necessary. The structured data
requirements under the proposed amendments would augment these effects,
allowing the Commission--and, where applicable, the public--to draw
upon comparable information from other reporting periods and from other
disclosing entities in assessing the reported disclosures.\531\
---------------------------------------------------------------------------

    \531\ As discussed further in section X.B.1, the affected
documents could be subject to requests for confidential treatment.
Whether any filed material is confidential is determined pursuant to
applicable law, including but not limited to the Freedom of
Information Act and Commission rules governing requests for
confidential treatment. The public would not directly use any
confidential information contained in these documents.
---------------------------------------------------------------------------

B. Baseline

1. Affected Entities
    The entities primarily affected by the proposed requirements
include the filers or submitters of the affected documents and the
users of the affected documents. Other affected entities include third
parties that may be involved with the preparation and filing or
submission of the affected documents and in facilitating the use of
structured data filed or submitted with the Commission, as well as
parties that may indirectly benefit from the use of the affected
documents by others.
Filers or Submitters of Affected Documents
    Entities that currently file or submit the affected documents
include SROs, including: national securities exchanges and exempt
exchanges; notice-registered Security Futures Product Exchanges;
registered national securities associations; and registered and exempt
clearing agencies. Filers or submitters of the affected documents also
include broker-dealers and registered SBS Entities (and certain
affiliates thereof).\532\
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    \532\ Not all of the affected documents listed for a particular
entity type below apply to every entity that falls within that
entity type. For details on the subsets of affected entities that
file or submit particular affected documents, see supra section IX.

          Affected Documents and Affected Filers or Submitters
------------------------------------------------------------------------
                                   Type of affected   Filer or submitter
        Affected document         filer or submitter         count
------------------------------------------------------------------------
Form X-17A-5 Part III...........  Broker-dealers      3,218 as of 12/31/
                                   (including OTC      22.
                                   derivatives
                                   dealers) and non-
                                   bank SBS Entities.
Form 17-H.......................  Broker-dealers      Approximately 241
                                   (including OTC      as of 9/30/22.
                                   derivatives
                                   dealers).
FOCUS Report Part II............  Broker-dealers      460 as of 3/31/22.
                                   (including OTC
                                   derivatives
                                   dealers) and
                                   stand-alone SBS
                                   Entities.
FOCUS Report Part IIA...........  Broker-dealers      3,056 as of 3/31/
                                   (including OTC      22.
                                   derivatives
                                   dealers).
FOCUS Report Part IIC...........  Bank SBS Entities.  31 as of 3/31/22.
Form 1..........................  National            24 as of 12/31/22.
                                   securities
                                   exchanges.
Form 1-N........................  Security futures    2 as of 12/31/22.
                                   product exchanges.
Form X-15AA-1; Form X-15AJ-1;     Registered          1 as of 12/31/22.
 Form X-15AJ-2.                    national
                                   securities
                                   associations.
Form CA-1.......................  Registered and      14 (12
                                   exempt clearing     operational) as
                                   agencies.           of 12/31/22.
Rule 17a-22 materials...........  Registered          9 (7 operational)
                                   clearing agencies.  as of 12/31/22.
Form X-17A-19...................  National            25 as of 12/31/22.
                                   securities
                                   exchanges and
                                   registered
                                   national
                                   securities
                                   associations.
Form 19b-4(e)...................  National            24 as of 12/31/22.
                                   securities
                                   exchanges.
Notices of Security-Based Swap    SBS Entities......  50 as of 1/4/23.
 Valuation Disputes pursuant to
 Rule 15fi-3(c).
CCO Report......................  SBS Entities......  50 as of 1/4/23.
ANE Exception Notice............  Majority-owned      24 (estimated) as
                                   affiliates of       of 12/31/22.
                                   Relying Entities
                                   that are either
                                   registered SBSDs
                                   or registered
                                   brokers that
                                   meets certain
                                   capital and other
                                   requirements.
------------------------------------------------------------------------

Users of Affected Documents
    The particular entities that use (e.g., examine, store, analyze)
each affected document vary based on whether the particular document is
publicly available. As noted in Section IX.F above, the documents
subject to the proposed rule amendments would be available to the
public, unless the firm submits a successful confidential treatment
request.\533\ In that case, only the Commission (and, in certain cases,
other regulators and regulatory organizations) would be able to
directly access and use the documents. Otherwise, the affected
documents would be publicly available, and as such could be directly
used by public entities in addition to the Commission, such as
investors and other market participants, financial and market analysts,
financial press, and other regulatory agencies or organizations.\534\
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    \533\ See supra note 545 and 546. As noted above in Section X.A,
whether any filed material is confidential is determined pursuant to
applicable law, including but not limited to the Freedom of
Information Act and Commission rules governing requests for
confidential treatment.
    \534\ See, e.g., Arun Gupta, ``The Internal Capital Markets of
Global Dealer Banks,'' Finance and Economics Discussion Series 2021-
036, Washington: Board of Governors of the Federal Reserve System
(Apr. 25, 2021), https://doi.org/10.17016/FEDS.2021.036 (Federal
Reserve Board staff research paper using balance sheet data from
Form X-17A-5 Part III to examine the internal capital markets of
dealer banks); Srinivasan, Kandarp, ``The Securitization Flash
Flood'' (Dec. 15, 2021), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2814717 (academic research paper using data
from Form X-17A-5 Part III to assess repo activities of large
broker-dealers) (retrieved from SSRN Elsevier database).
---------------------------------------------------------------------------

Third-Party Service Providers
    In addition to the preparers and users of the affected documents,
the other entities likely to be affected by the proposal are third-
party service providers that assist in electronic filing and, in some
cases, structuring, of regulatory documents, and in the facilitation of
structured data use. As discussed in further detail below, the cost to
filers or submitters of the proposed rules includes, in some instances,
the cost of paying third-party service providers to prepare electronic
and structured documents.\535\ Conversely, such third-party service
providers would benefit from increased demand for electronic filing and
structured data services under the proposed rules.
---------------------------------------------------------------------------

    \535\ See infra Section X.C.2.b.
---------------------------------------------------------------------------

    The Commission does not have data on the costs or structure of
these services to filers or submitters of the affected documents.
However, although the filers or submitters might nominally bear the
costs of these services, we believe that some portion of these costs
are passed on to investors indirectly. The Commission requests comment
or data on the costs of these third-party service providers or how
these costs are borne by filers and submitters of the affected
documents.
    With particular respect to structured data, entities currently
subject to structured data requirements under Commission rules often
pay third-party service providers to structure their disclosures, or to
license structuring compliance software that allows filers or
submitters to structure their disclosures internally. The specific
amounts paid to third-party providers of structured data compliance
services and/or software vary significantly based on a number of
factors, such as the particular filing or submission on which
structured data is required, the number of data points to be
structured, the size of the filer or submitter, the industry to which
the filer or submitter belongs, the number of individual users of the
structured data compliance software, the extent to which the
structuring is fully outsourced, and others. For example, smaller
reporting companies are particularly likely to fully outsource their
structured data preparation requirements to third-party service
providers, leading to different cost dynamics than other companies that
license third-party structured data preparation software and structure
their disclosures in-house.\536\ Based on the Staff's understanding of
third-party structured data compliance pricing, we believe smaller
filers typically pay between $1,500 and $5,000 per year for third-party
structured data compliance services and/or software, while larger
filers typically pay between $5,000 and $30,000 per year for such
services and/or software.\537\
---------------------------------------------------------------------------

    \536\ See, e.g., Yu Cong, Ayishat Omar, Huey-Lian Sun; Does IT
Outsourcing Affect the Accuracy and Speed of Financial Disclosures?
Evidence from Preparer-Side XBRL Filing Decisions. Journal of
Information Systems 1 June 2019; 33 (2): 45-61 (stating that ``for
the sake of compliance, many firms, especially smaller firms that
lack extensive resources, have outsourced the creation and filing
process . . .''). Note also the subsequent discussion of a cost
survey conducted by the Association of International Certified
Professional Accountants, in which 1,032 smaller reporting companies
reported full outsourcing of their XBRL structuring requirements.
See infra note 627.
    \537\ Some compliance service providers publicly disclose or
advertise pricing information on their websites. See, e.g., EDGAR
Filing Services, Advanced Comp. Innovations, Inc., http://www.edgar-services.com/ (last visited Mar. 8, 2023); CompSci Resources,
https://www.compsciresources.com/pricing (last visited Mar. 8,
2023). Other compliance service providers do not publicly disclose
pricing information on their websites, instead requiring individual
pricing consultations. See also infra notes 628 and 629.
---------------------------------------------------------------------------

    In some cases, rather than use a third-party structured data
compliance service or software provider, filers or submitters will have
already structured their data in-house, independently of any Commission
disclosure requirements. For example, rather than paying third-party
structured data compliance service providers, some filers or submitters
use ERP systems or other data management platforms that include a data
structuring component.\538\ In some instances, filers or submitters of
a proposed custom XML document may already be using Inline XBRL to
structure similar data for internal business purposes (such as through
the use of ERP systems).\539\ Furthermore, companies that are
affiliated with one another may be able to leverage each other's
compliance software licenses or service agreements and experience in
complying with the proposed structured data requirements.
---------------------------------------------------------------------------

    \538\ See, e.g., Feng Guo, Xin Luo, Patrick R. Wheeler, Liu
Yang, Xinlei Zhao, Yiyang Zhang; Enterprise Resource Planning
Systems and XBRL Reporting Quality. Journal of Information Systems 1
Sept. 2021; 35 (3): 77-106 (defining ERP systems as ``large-scale,
modularly packaged information systems that have been widely adopted
by midsize and larger firms in recent decades'' and stating that
``most ERP systems integrate an eXtensible Business Reporting
Language (XBRL) component in their core modules. . .'').
    \539\ See supra text accompanying notes 92, 149, 237, and 245.
---------------------------------------------------------------------------

    In addition, with particular respect to custom XML requirements on
EDGAR forms, some filers or submitters may comply by inputting their
disclosures into fillable web forms on the EDGAR website; EDGAR then
converts these inputted disclosures into the applicable custom XML data
language. In such instances, filers or submitters forgo the cost of
paying third-party structured data compliance service providers. With
respect to the proposed rule amendments, because use of the fillable
form permits filers or submitters to forgo the costs of structuring, we
expect most entities affected by the proposed custom XML requirements
would opt to use fillable forms rather than structure directly in
custom XML.
    Other filers or submitters of custom XML documents choose not to
use the fillable web form; instead, they structure their disclosures in
the applicable custom XML data language and file or submit that
structured custom XML document on EDGAR. These filers or submitters
typically incur implementation costs to integrate any new or updated
custom XML schemas into their data systems, and then incur decreased
structured data costs after such integration. Such filers or submitters
may find direct submission

in custom XML beneficial, because it allows for greater automation for
filing or submitting already structured data without the need for a
final manual step of converting structured data into unstructured text
to be typed into fillable web fields. For this reason, we believe the
SROs that file Form 1 and Form CA-1, because they are likely to have
existing data management systems (or have the internal resources and
technical capability to establish such systems) that cover some of the
disclosures proposed to be structured in custom XML, would opt to
structure disclosures directly in custom XML rather than using the
fillable EDGAR web form.\540\ Nonetheless, we believe providing both
the fillable web form option and the direct custom XML structuring
option for the proposed custom XML requirements, as we do for most
other custom XML forms on EDGAR, would provide useful flexibility for
any current or future affected entities that opt to take an approach
that differs from our preliminary assumptions, without compromising the
usefulness and accessibility of the resulting disclosures.
---------------------------------------------------------------------------

    \540\ Such disclosures could include, for example, schedules of
fees (Exhibit H to Form 1), lists of participants or applicants for
participation (Exhibit N to Form CA-1), and schedules of traded
securities (Exhibit N to Form 1).
---------------------------------------------------------------------------

    While not required for structured data use, some data users
(including some investors and analysts) pay third-party service
providers for software that can facilitate their usage and analysis of
structured data. As with structured data compliance, the specific
amounts paid for third-party structured data research software vary
significantly based on a number of factors, such as the number of
individual software users, whether the user is an individual or an
enterprise, and the particular type of functionality offered. Based on
the Staff's understanding of third-party structured data research
software pricing, we believe data users typically pay between $1,000
and $15,000 per year for third-party structured data research
software.\541\ Other data users, especially those with more technical
experience and sophistication, import structured data into their own
systems and analyze the data without paying for third-party
software.\542\
---------------------------------------------------------------------------

    \541\ Some research service providers publicly disclose or
advertise pricing information on their websites. See, e.g.,
Calcbench, https://www.calcbench.com/payment/pricing (last visited
Mar. 8, 2023); TagniFI, https://about.tagnifi.com/pricing/ (last
visited Mar. 8, 2023); FinDynamics, https://findynamics.com/subscriptions/ (last visited Mar. 8, 2023). Other research service
providers do not publicly disclose pricing information on their
websites, instead requiring individual pricing consultations.
    \542\ Structured data filed with or submitted to the Commission
(other than structured data filed or submitted on non-public
documents) are freely available to access and download. See DERA
Data Library, available at https://www.sec.gov/dera/data; Structured
Disclosure RSS Feeds, available at https://www.sec.gov/structureddata/rss-feeds-submitted-filings.
---------------------------------------------------------------------------

2. Paper and Limited Electronic Submission
    Certain of the affected documents are currently filed or submitted
in paper format. Specifically, the Commission's regulatory framework
currently requires an entity seeking to be registered as a national
securities exchange, as a clearing agency, and as a security futures
product exchange, to file in a paper-based format certain forms that
are mandated by rules under the Exchange Act. Filers are also required
to submit paper-based amendments to their respective forms. The forms
currently required to be filed in paper format include Forms 1, 1-N, X-
15AA-1, X-15AJ-1, X-15AJ-2, CA-1. Form 19b-4(e) also is required to be
submitted in paper format. In addition, paragraphs (d)(6) of Rule 17a-5
and (c)(6) of Rule 18a-7 provide that broker-dealer and SBS Entity
annual reports, respectively, must be sent to the Commission's
principal office in Washington, DC, and appropriate regional office or
they may be submitted to the Commission electronically in accordance
with directions provided on the Commission's website. Some broker-
dealers voluntarily file annual reports electronically on EDGAR,\543\
and instructions for doing so are posted on the Commission's website.
For the 12 months ending December 31, 2022, the Commission received
1,559 filings of the annual reports in paper and 1,659 electronically
via EDGAR. The proportion of annual reports filed electronically has
been steadily increasing over the years since it was first permitted in
2015.
---------------------------------------------------------------------------

    \543\ We note that Commission staff previously stated that it
would not recommend enforcement action to the Commission under Rule
17a-5 or Rule 17a-12 if a broker-dealer or OTC derivatives dealer
files the annual and supplemental reports required under those rules
electronically through the EDGAR system in accordance with the
instructions and conditions contained on the Commission's website in
lieu of filing them with the Commission in paper form. 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.
---------------------------------------------------------------------------

    OTC derivatives dealer annual reports filed under Rule 17a-12 must
be filed at the Commission's principal office under paragraph (p) of
that rule. Further, Rule 17h-2T permits quarterly and annual risk
assessment reports to be filed with the Commission in paper-based
format, and Rule 17a-19 currently requires every national securities
exchange and registered national securities association to file a Form
X-17A-19 with the Commission in paper format at its principal office.
In some circumstances, the Commission's regulatory framework currently
requires or permits submission of documentation by email. Specifically,
Exchange Act Rule 3a71-3(d)(1)(vi) requires the Registered Entity to
provide the ANE Exception Notice by submitting it to the electronic
mailbox described on the Commission's website. Further, notices made
pursuant to Rule 15fi-3(c) may be made via email or on EDGAR. Annual
compliance reports provided pursuant to Rule 15fk-1(c) may be submitted
by an SBS Entity as a paper or electronic submission.
    In addition, current Rule 17a-22 under the Exchange Act 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 self-regulatory
organizations, 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.\544\ Commission staff, however, released the Staff
Statement on COVID-19 flexibilities in early April 2020 and updated it
in June 2020. Since that time, consistent with the Updated Staff
Statement, filers and registrants have made alternate arrangements for
the delivery, execution, and notarization of certain filings, including
filings to be made pursuant to Rule 17a-22.\545\ These alternate
arrangements have included electronic submission, similar to what is
being proposed.
---------------------------------------------------------------------------

    \544\ 17 CFR 240.17a-22.
    \545\ Division Staff Statement Regarding Requirements for
Certain Paper Submissions in Light of COVID-19 Concerns (Apr. 2,
2020), available at https://www.sec.gov/tm/paper-submission-requirements-covid-19; see also Updated Staff Statement, supra note
6.
---------------------------------------------------------------------------

    When a paper filing is received, the Commission staff scan it into
PDF format, and upload it to EDGAR or make it available to Commission
staff. For some filings, such as broker-dealer's annual reports, this
process can take an average of a several weeks from the date of receipt
of a paper filing until it is scanned and the public portion published
on EDGAR, and the confidential portion available to Commission staff.

3. Structured Data
    Currently, four of the affected documents may be filed or submitted
electronically using EDGAR--Form X-17A-5 Part III, Form 17-H, notices
made pursuant to Exchange Act Rule 15fi-3(c), and CCO reports.\546\
Form X-17A-5 Part III, the facing page for annual reports required to
be filed with the Commission under Exchange Act Rules 17a-5, 17a-12,
and 18a-7 (which generally must be audited), is filed by broker-dealers
(including OTC derivatives dealers) and non-bank SBS Entities; Form 17-
H is filed by broker-dealers subject to paragraph (a) of Rule 17h-2T;
and the notices provided under Exchange Act Rule 15fi-3(c) and the CCO
reports are submitted by SBS Entities. Each of Form X-17A-5 Part III,
Form 17-H, and the CCO reports is, when filed or submitted
electronically, partially structured (i.e., machine-readable). None of
the other affected documents is currently structured, either in whole
or in part.
---------------------------------------------------------------------------

    \546\ See supra sections IV.A, IV.B, V.C, and V.D.
---------------------------------------------------------------------------

    Form X-17A-5 Part III elicits registrant and accountant identifying
information and includes an oath or affirmation in a custom XML-based
data language specific to that form.\547\ As is the case with most of
the Commission's other custom XML forms, filers of Form X-17A-5 Part
III have the option of manually inputting information into a fillable
form that EDGAR subsequently converts into the custom XML data language
for Form X-17A-5 Part III.\548\ Form X-17A-5 Part III filers are then
able to attach the remaining documents required by the applicable
rules, including financial statements and supplemental reports, in
unstructured formats such as PDF and HTML.\549\
---------------------------------------------------------------------------

    \547\ 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.
    \548\ See supra note 230 at 8.2.22.
    \549\ See id.
---------------------------------------------------------------------------

    Form 17-H is similar to Form X-17A-5 Part III in that its facing
page, when filed electronically through EDGAR, is structured in a
custom XML-based data language specific to Form 17-H.\550\ In addition,
Part II of Form 17-H, which consists of securities and commodities
position disclosures for the filing broker-dealer's material associated
persons, must be submitted in the Form 17-H-specific custom XML when
filed electronically through EDGAR.\551\ Form 17-H filers have the
option of manually inputting Part I facing page information and Part II
positions information into a fillable web form that EDGAR subsequently
converts into the custom XML for Form 17-H.\552\
---------------------------------------------------------------------------

    \550\ See EDGAR 17-H Technical Specification, available at
https://www.sec.gov/info/edgar/specifications/form-17-h-xml-tech-specs.htm.
    \551\ See id.
    \552\ See supra note 230 at 8.2.24.
---------------------------------------------------------------------------

    In addition, the CCO reports are, when filed electronically through
EDGAR, partially structured in a custom XML-based data language
specific to the reports.\553\ SBS Entities have the option of manually
inputting the execution page information into a fillable web form that
EDGAR subsequently converts into the custom XML-based data language
specific to the reports.\554\
---------------------------------------------------------------------------

    \553\ See EDGAR SBS Entity Forms Technical Specification,
available at https://www.sec.gov/info/edgar/specifications/form-sbs-entity-xml-tech-specs.htm.
    \554\ See supra note 230 at <IP_ADDRESS>.
---------------------------------------------------------------------------

    The broker-dealers (including OTC derivatives dealers) and non-bank
SBS Entities that file Form X-17A-5 Part III and, where applicable,
Form 17-H, are also subject to other structuring requirements under
Commission rules. As discussed, all of these entities are required to
file FOCUS Reports under Exchange Act Rule 17a-5, Rule 17a-12, or Rule
18a-7, as applicable.\555\ Broker-dealers, SBSDs, MSBSPs, and OTC
derivatives dealers file these FOCUS Reports using a fillable web form
that the relevant eFOCUS system converts into a custom XML.\556\ In
addition, SBSDs and MSBSPs must file in EDGAR Form SBSE, SBSE-A, or
SBSE-BD, as applicable, to register as an SBS Entity, as well as
amendments to those Forms if the information in them is or has become
inaccurate; Forms SBSE, SBSE-A and SBSE-BD are structured using a
custom XML-based data language specific to the form.\557\ Broker-
dealers, SBSDs, MSBSPs, and OTC derivatives dealers are not subject to
any Inline XBRL requirements under Commission rules.
---------------------------------------------------------------------------

    \555\ See 17 CFR 240.17a-5; 17 CFR 240.17a-12; 17 CFR 240.18a-7.
    \556\ See eFOCUS--Fin. & Operational Combined Unif. Single
Reports, https://www.finra.org/filing-reporting/regulatory-filing-systems/efocus (last visited Mar. 7, 2023); eFocus Filing
Transmission, https://www.finra.org/filing-reporting/focus/efocus-filing-transmission (last visited Mar. 7, 2013); FINRA eFOCUS User
Guide: Training and Reference Manual, https://www.finra.org/sites/default/files/p118798.pdf (last visited Mar. 7, 2023).
    \557\ See supra note 230 at 8.2.17.
---------------------------------------------------------------------------

    Other filers or submitters of the affected documents include
clearing agencies, national securities exchanges, Security Futures
Product Exchanges, and registered national securities associations.
None of these entities is currently subject to custom XML requirements
or Inline XBRL requirements under the Commission's rules.
    Thus, the affected documents currently include only a limited
amount of structured data. For execution pages of electronically
submitted Form X-17A-5 Part III reports, Form 17-H reports and CCO
reports, the inclusion of structured identifying information on the
facing page facilitates the filtering and retrieval of particular
reports from particular subsets of filers or submitters. For Part II of
electronically submitted Form 17-H reports, the inclusion of structured
material associated person disclosures enables more efficient
mathematical calculations of the disclosed numerical information.
Because Form 17-H reports and CCO reports are non-public, such enhanced
functionality is unavailable to parties other than Commission staff; by
contrast, because the execution page of Form X-17A-5 Part III is
public, such enhanced functionality is available to Commission staff
and to public data users.

C. Economic Effects

1. Benefits
a. Electronic Submission and Posting
    Electronic submissions can increase the accuracy, speed, and
efficiency of the documents provided to the Commission. After an
initial setup cost described below,\558\ these changes can potentially
reduce the cost for reporting entities because the shift to electronic
submission can obviate the need for printing costs, and improve the
efficiency of filing preparation. In addition, the improved accuracy,
speed, and efficiency of the documents provided to the Commission can
reduce the costs associated with receiving and processing submissions,
in part by reducing the time, processing, and search costs relative to
the manual nature of non-electronic document processing, and
accordingly aid the Commission's examination and oversight functions.
For some filings, such as broker-dealer annual reports, eliminating the
need to scan paper documents could reduce processing time by as much as
several weeks. An increase in the accuracy and timeliness of processing
submissions boosts the efficiency of Commission document review,
processing, and quality assurance. Furthermore, electronic submissions
allow reporting entities and Commission staff to more easily access or
submit documents during disruptive events--like COVID-19--when their
physical work facilities may be inaccessible.
---------------------------------------------------------------------------

    \558\ See infra Section X.C.2.

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

    The proposed rule includes several amendments designed to update
the FOCUS Report and related requirements. First, the release proposes
amendments to FOCUS Report Part II that would allow SEC staff to
compare the data reported on this page with the information being
reported by firms that are FCMs, because FCMs are already required to
complete this section of the form.
    Second, the Commission proposes to align the text in FOCUS Report
Part IIC with the text in FFIEC Form 031. Making these amendments
should reduce the overall burden because information input in the
proposed form will be consistent with FFIEC Form 031 (i.e., the Call
Report), which many Part IIC filers are already required to
complete.\559\ The amendments also remove ambiguity about how to
complete the Part IIC, which have resulted in SEC staff receiving a
number of phone calls seeking assistance on how to reconcile these
incompatibilities.
---------------------------------------------------------------------------

    \559\ Of the affected entities in this release, 31 filed FOCUS
Report Part IIC as of Mar. 31, 2022. See supra section IX.C.9.
---------------------------------------------------------------------------

    Third, the Commission proposes to require only two of the three
signature lines to be signed on the FOCUS Report's cover page, and
allows these signatures to be signed either manually or electronically.
In the time since the revised FOCUS Report was adopted, it has come to
the Commission's attention that obtaining the signatures of all three
principal officers on or close to the same day may be burdensome,
especially with respect to larger firms with thousands of employees.
Therefore, the Commission proposes to require only two of the three
principal officers' signatures in an effort to balance the Commission's
desire for individual accountability with the burden on the filer.
Reducing the number of required signatures reduces the burden of
submitting FOCUS reports in the long run. The use of electronic
signatures would also reduce the burden in the long-run because firms
would not need to obtain and store wet signatures, especially due to
the increase in remote work.
    Finally, the Commission proposes to require OTC derivatives dealers
to file the FOCUS Report electronically on the SEC eFOCUS system
instead of in paper. The SEC eFOCUS system offers benefits of
electronic filing of forms over paper, reducing costs and making
information more easily usable and timely.
b. Structured Data
    In general, the Commission believes the proposed structured data
requirements will benefit investors and markets by increasing the
accessibility and usability of the disclosures in the Proposed
Structured Documents, thereby increasing transparency and insight into
the operations, governance, management, financial condition, and other
characteristics of the affected entities. Requiring machine-readability
for the disclosures would enable significantly more efficient
retrieval, sorting, filtering, comparison, aggregation, and other
analysis of the disclosures across reporting entities and time periods.
The exact nature and magnitude of such benefits may vary based on a
number of factors, which are discussed herein.
Structured Data Benefits
    As an initial point of comparison, some research on XBRL
requirements for public operating company financial statement
disclosures has found that such requirements have mitigated information
asymmetry by reducing information processing costs, thereby
facilitating access and analysis of the disclosures on a large-scale
basis.\560\ This reduction in information processing cost has been
observed to facilitate the monitoring and analysis of firms by external
parties.
---------------------------------------------------------------------------

    \560\ See, e.g., Joung W. Kim, Jee-Hae Lim, & Won Gyun No, The
Effect of First Wave Mandatory XBRL Reporting Across the Financial
Information Environment, 26 J. Info. Sys. 127, 127-53 (2012)
(finding evidence that ``mandatory XBRL disclosure decreases
information risk and information asymmetry in both general and
uncertain information environments''); Yuyun Huang, Jerry T.
Parwada, Yuan George Shan, & Joey Wenling Yang, Insider
Profitability and Public Information: Evidence From the XBRL Mandate
(SSRN Working Paper, 2020) (retrieved from SSRN Elsevier database)
(finding that XBRL levels the playing field between insiders and
non-insiders, in line with the hypothesis that ``the adoption of
XBRL enhances the processing of financial information by investors
and hence reduces information asymmetry'').
---------------------------------------------------------------------------

    These external parties include investors themselves, as well as
other entities that process firm disclosures into conclusions that
often influence investors and markets; such entities include financial
analysts, data aggregators, academic researchers and financial media
(collectively, ``information intermediaries'').\561\ In that regard,
the Commission believes that institutional investors are more likely to
access XBRL data directly, whereas retail investors are more likely to
benefit from the use of XBRL data by information intermediaries.\562\
---------------------------------------------------------------------------

    \561\ See, e.g., Trentmann, N., Companies Adjust Earnings for
Covid-19 Costs, But Are They Still a One-Time Expense? The Wall
Street Journal (2020) (citing an XBRL research software provider as
a source for the analysis described in the article); Bloomberg Lists
BSE XBRL Data, XBRL.org (Mar. 17, 2019), https://www.xbrl.org/news/bloomberg-lists-bse-xbrl-data/; Hoitash, R & U. Hoitash, Measuring
accounting reporting complexity with XBRL. 93 Account. Rev. 259-287
(2018).
    \562\ See, e.g., Alastair Lawrence, James P. Ryans, Estelle Y.
Sun; Investor Demand for Sell-Side Research. The Account. Rev.
(2017) (finding ``the average retail investor appears to rely on
analysts to interpret financial reporting information rather than
read the actual filings''); but see Chi, Sabrina and Shanthikumar,
Devin M., Do Retail Investors Use SEC Filings? Evidence from EDGAR
Search, SSRN (2018) (retrieved from SSRN Elsevier database) (finding
``retail investor trading, both buying and selling, is significantly
related to EDGAR search for 10-K and 10-Q filings, more so than to
Google search,'' especially for ``the most easily readable 10-K and
10-Q filings''); see also Brown, Nerissa & Gale, Brian & Grant,
Steph, Repetition, Interactivity, and Investors' Reliance on Firm
Disclosures, SSRN (2020) (retrieved from SSRN Elsevier database)
(indicating that disclosure interactivity, which is promoted by
Inline XBRL, may improve investors' direct processing of financial
information).
---------------------------------------------------------------------------

    Regulators, including the Commission, the Federal Deposit Insurance
Commission (``FDIC''), and the Internal Revenue Service (``IRS''), have
also been observed to leverage XBRL disclosure benefits in better
fulfilling their mandates.\563\ The Commission staff uses XBRL data to
efficiently analyze large quantities of information in support of risk
assessment, rulemaking, and enforcement activities, including as part
of its internally developed Financial Statement Query Viewer and Inline
Viewer applications.\564\ The regulatory use of XBRL is particularly
relevant to affected documents that are subject to

confidential treatment and thus only accessible by the Commission and
its staff.\565\
---------------------------------------------------------------------------

    \563\ With respect to Commission use of XBRL data, see infra
note 596. With respect to FDIC use of XBRL data, see Meet Mark
Montoya, Chief of Data Strategy, FDIC, Xcential Co. (Sept. 29,
2021), https://xcential.com/meet-mark-montoya-chief-data-officer-fdic/ (noting in an interview with the FDIC's Chief Data Officer
that XBRL requirements for quarterly bank call reports have
facilitated FDIC staff analysis of the regulated banks); see also
Government Use of Data Standards--Conversation with the FDIC, XBRL
US (Sep. 2, 2020), https://xbrl.us/news/regulator-video/ (noting in
an interview with the FDIC's Chief Data Officer that, ``. . . Prior
(to XBRL) the data that the (FDIC) examiners used to examine the
banks was probably about 2-3 months old which is old data . . .
(with XBRL) the data can be pulled down in real time''); see also
Lizhong Hao and Mark J. Kohlbeck, The Market Impact of Mandatory
Interactive Data: Evidence from Bank Regulatory XBRL Filings, J.
Emerging Tech. Acct. (2013) (finding that banks experienced a
``reduction in systematic risk in connection with filing their
regulatory reports in XBRL''). With respect to IRS use of XBRL data,
see infra note 599.
    \564\ See, e.g., How errors and delays in SEC filings can hurt
companies--and their shareholders, Toppan Merrill Indus. Insights
(Nov. 9, 2018), https://blog.toppanmerrill.com/insights-blog-all/how-errors-and-delays-in-sec-filings-can-hurt-companies-and-their-shareholders (noting, in the context of an interview with an
Enforcement staff member, that the Commission uses structured data,
including XBRL, ``in enforcement cases, including those that involve
disclosure and accounting violations'').
    \565\ As noted above in Sections X.A and X.B, whether any filed
material is confidential is determined pursuant to applicable law,
including but not limited to the Freedom of Information Act and
Commission rules governing requests for confidential treatment.
---------------------------------------------------------------------------

    The enhanced monitoring facilitated by XBRL requirements has been
observed to influence the behavior of firms relevant to governance and
compliance, including firms' disclosure and reporting choices as well
as their strategic decisions. For example, one study found that firms
increase quantitative footnote disclosures upon implementation of
detailed tagging requirements.\566\ Another study found that XBRL
reporting has reduced the cost of IRS monitoring of firms and thus
decreased the likelihood of firm tax avoidance.\567\ Finally, multiple
studies have shown that XBRL requirements have influenced firms'
strategic decision-making, an effect that appears to be heightened for
Inline XBRL requirements.\568\
---------------------------------------------------------------------------

    \566\ See Elizabeth Blankespoor, The Impact of Information
Processing Costs on Firm Disclosure Choice: Evidence from the XBRL
Mandate, 57 J. Acct. Res. 919 (2019) (finding ``firms increase their
quantitative footnote disclosures upon implementation of XBRL
detailed tagging requirements designed to reduce information users'
processing costs,'' and ``both regulatory and non-regulatory market
participants play a role in monitoring firm disclosures,''
suggesting ``that the processing costs of market participants can be
significant enough to impact firms' disclosure decisions''); see
also Kim, Jeong-Bon, Kim, Joung W., and Lim, Jee-Hae, Does XBRL
Adoption Constrain Earnings Management? Early Evidence from Mandated
U.S. Filers. Contemp. Acct. Res. (2019) (indicating that XBRL
adoption ``constrains earnings management via discretionary accrual
choices'').
    \567\ See Jeff Zeyun Chen, Hyun A. Hong, Jeong-Bon Kim, & Ji Woo
Ryou, Information processing costs and corporate tax avoidance:
Evidence from the SEC's XBRL mandate, 40 J. Acct. & Pub. Policy
106822 (2021) (finding XBRL reporting decreases likelihood of firm
tax avoidance because ``XBRL reporting reduces the cost of IRS
monitoring in terms of information processing, which dampens
managerial incentives to engage in tax avoidance behavior'').
    \568\ See, e.g., Xin Cheng, Feiqi Huang, Dan Palmon, and Cheng
Yin, How Does Information Processing Efficiency Relate to Investment
Efficiency? Evidence from XBRL Adoption. J. Info. Sys. (2020)
(finding firms ``improve their investment efficiency after the
adoption of XBRL,'' especially for firms that ``have inferior
external monitoring, . . . operate in more uncertain information
environments, . . . and have less readable financial reporting); see
also Hyun Woong (Daniel) Chang, Steven Kaszak, Peter C. Kipp, Jesse
C. Robertson, The Effect of iXBRL Formatted Financial Statements on
the Effectiveness of Managers' Decisions when Making Inter-Firm
Comparisons. J. Info. Sys. (2020) (finding ``iXBRL filings
facilitate information search and information match by allowing
users to view XBRL data in HTML filings,'' and ``managers make more
(less) effective decisions when presented with financial information
formatted in iXBRL (XBRL)'').
---------------------------------------------------------------------------

    XBRL requirements have also been observed to impact the timeliness
and effectiveness of firms' disclosure preparation and related
processes. For example, one study found XBRL to have decreased audit
report lags, especially among firms with strong internal control
systems and no prior XBRL reporting experience.\569\ Other studies have
found XBRL requirements to have improved the timeliness of financial
reports, with such improvements limited to larger firms only.\570\ For
instance, one public company executive noted that XBRL facilitates his
firm's disclosure preparation procedures by enabling efficient review
of disclosures made by peer companies.\571\ Increasing the timeliness
and effectiveness of the auditing and disclosure process would improve
the speed (and, with respect to enhanced auditing processes,
confidence) with which users of the affected entities' disclosures
(such as investors, analysts, and regulators) could assess and
ultimately draw conclusions from, and act upon, the disclosed
information.\572\
---------------------------------------------------------------------------

    \569\ See Keval Amin, John Daniel Eshleman, Cecilia (Qian) Feng,
The Effect of the SEC's XBRL Mandate on Audit Report Lags. Acct.
Horiz. (2018) (finding ``audit report lags decrease following the
mandatory adoption of XBRL,'' with results ``concentrated among
filers with strong internal control systems and no prior XBRL
reporting experience'').
    \570\ See, e.g., Hui Du and Kean Wu, XBRL Mandate and Timeliness
of Financial Reporting: Do XBRL Filings Take Longer? J. Emerg. Tech.
Acct. (2018) (finding decreased reporting lags for XBRL annual and
quarterly filings compared to non-XBRL filings from accelerated and
large accelerated filers, but not for non-accelerated filers); see
also Zhou, J., Does one size fit all? Evidence on XBRL adoption and
10[hyphen]K filing lag. Acct Fin. (2019) (noting that 10-K filing
lag decreased for all filers in the XBRL reporting period except
smaller reporting companies, for which 10-K filing lag increased).
However, these studies were based on XBRL filings that were made
before the adoption of Inline XBRL requirements, which may
facilitate the filing preparation process by including the machine-
readable and human-readable data in the same disclosure document.
    \571\ See Olivia Berkman, XBRL: What are the Benefits, FEI Daily
(Aug. 29, 2019), https://www.financialexecutives.org/FEI-Daily/August-2019/XBRL-What-are-the-Benefits.aspx (noting in an interview
with a public company's chief financial officer that the company is
able to ``search through XBRL filings to find similar companies
within [its] industry that have had to present certain similar
[disclosures] in the past,'' which has helped the company ``craft[]
[its] disclosures to make sure that [the company is] complying with
the spirit of GAAP and providing the information that [the company
is] supposed to be providing'').
    \572\ See supra section IV.A.1 (discussing the time lag between
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).
---------------------------------------------------------------------------

Applicability and Variability of Structured Data Benefits
    The structured data benefits discussed above, while largely
specific to public operating company financial statement disclosures,
generally indicates that the proposed structured data requirements
could facilitate the use and analysis of the information disclosed on
the affected documents. Several of the affected documents that would be
structured in Inline XBRL under the proposal--namely, Form X-17A-5 Part
III, Form 17-H, Form 1, and Form CA-1--include financial statements
that are not currently provided in a structured data language, but
would be provided in a structured data language (specifically, Inline
XBRL) under the proposed rule amendments. The probability that, and
extent to which, the observed effects can be extrapolated are thus
likely greater for those affected documents than for the remaining
affected documents, which do not contain financial statements.
    In addition, unlike the public company financial statement
information evaluated in the literature referenced above, several of
the affected documents are submitted confidentially or are otherwise
non-public, either in whole or in part. This includes Form 17-H, Form
X-17A-19, Form X-17A-5 Part III (in part), Form CA-1 (in part), and the
CCO reports.\573\ The expected benefits of structuring non-public
information would accrue to investors and markets indirectly, by
enhancing the Commission's regulatory capabilities.\574\ By contrast,
the expected benefits of structuring public information would accrue
directly to public users of the data (which could include investors and
the previously

discussed information intermediaries), as well as indirectly to
investors and markets through the enhancement of the Commission's
regulatory capabilities (and, where relevant, those of other
regulators).
---------------------------------------------------------------------------

    \573\ Additionally, the Commission does not automatically make
public the information provided to it pursuant to Rule 15fi-3(c);
however, the Commission may make the information available upon
appropriate request (including requests made pursuant to the Freedom
of Information Act) or otherwise as permitted under applicable law,
subject to SBS Entities making appropriate requests for confidential
treatment. See supra notes 293 and 294 and accompanying text.
Whether any material is confidential is determined pursuant to
applicable law, including but not limited to the Freedom of
Information Act and Commission rules governing requests for
confidential treatment. If the Commission makes the information
provided pursuant to Rule 15fi-3(c) available, the information made
available may not be in structured format.
    \574\ See supra note 595. An example of a structured non-public
disclosure form is Form PF, which registered investment advisers
file with the Commission to disclose information regarding private
funds under their management. See 17 CFR 275.204(b); Division of
Investment Management: Electronic Filing of Form PF for Investment
Advisers on PFRD, available at https://www.sec.gov/divisions/investment/pfrd.shtml.
---------------------------------------------------------------------------

    The benefits of structuring would also vary based on the number of
entities in a particular population of reporting entities. As noted,
one benefit of structured disclosure is the ability to run large-scale
comparisons across reporting entities and across reporting periods. For
those affected documents that have a small population of reporting
entities, this benefit would be limited largely (or, in the case of
Form 15A, wholly) to the latter. For those affected documents that have
a large population of reporting entities (such as Form X-17A-5 Part
III, which is filed by over 3,000 entities), the benefits of efficient
cross-entity comparisons would be much more relevant.\575\ Similarly,
the benefits of efficient access, retrieval, sorting, and filtering
structured disclosures would be heightened for those affected documents
generated in high volume (such as Form 19b-4(e) and Form X-17A-19)
compared to those affected documents that the Commission receives in
low volume (such as Form CA-1).\576\
---------------------------------------------------------------------------

    \575\ See supra section IX.C.9.
    \576\ See supra sections IX.D.5, IX.D.6, and IX.D.11.
---------------------------------------------------------------------------

    Finally, the Commission expects the benefits of structuring data
would vary based on the type of disclosures included in each particular
affected document. Structured numerical disclosures lend themselves to
mathematical functionality, such as the calculation of leverage or
other ratios to assess potential exposure to insolvency or other risk.
Structured textual disclosures lend themselves to period-over-period
redline comparisons, targeted keyword searching, and more sophisticated
sentiment analysis. The CCO report consists primarily of textual
responses to required disclosure items, so the latter benefit would be
relevant for that document.\577\ Other affected documents feature both
numeric and textual disclosures, so both of these benefits would be
relevant.
---------------------------------------------------------------------------

    \577\ See 17 CFR 240.15fk-1(c)(2)(i).

   Types of Disclosures and Associated Benefits in Proposed Structured
                                Documents
------------------------------------------------------------------------
                                                            Textual
                                        Numeric           disclosures
                                      disclosures          (redline
  Proposed structured document       (mathematical       comparisons,
                                     functionality    targeted searches,
                                      applicable)     sentiment analyses
                                                          applicable)
------------------------------------------------------------------------
Form X-17A-5 Part III...........  Yes...............  Yes.
Form 17-H.......................  Yes...............  Yes.
Form CA-1.......................  Yes...............  Yes.
Form 1..........................  Yes...............  Yes.
Form 1-N (execution page only)..  No................  Yes.
Form 15A (execution page only)..  No................  No.
Rule 19b-4(e) Information.......  In some cases.....  No.
Form X-17A-19...................  No................  Yes.
Notices of Security-Based Swap    Yes...............  Yes.
 Valuation Disputes pursuant to
 Rule 15fi-3(c).
CCO Report......................  In some cases.....  Yes.
------------------------------------------------------------------------

    For Rule 19b-4(e), numeric disclosures are required only when the
disclosure of position limits for new derivative products is
applicable.\578\ For notices of security-based swap valuation disputes
pursuant to Rule 15fi-3(c), SBS Entities must notify the Commission of
any valuation disputes in excess of $20,000,000 if not resolved within
three or five business days, depending on the counterparty.\579\ SBS
Entities are provided flexibility to submit the required
information.\580\ For CCO reports, while Rule 15fk-1(c) does not
expressly call for numeric disclosures, a CCO report could include
numeric disclosures nested within textual responses, such as the
description of financial, managerial, operational, and staffing
resources set aside for compliance with the Exchange Act.\581\
---------------------------------------------------------------------------

    \578\ See Item 9 of Form 19b-4(e).
    \579\ See 17 CFR 240.15Fi-3(c)(1). See also 17 CFR 240.15Fi-
3(c)(2) regarding required amendments.
    \580\ See supra section V.C.
    \581\ See 17 CFR 240.15Fk-1(c)(2)(i)(E).
---------------------------------------------------------------------------

    For Form 15A, its execution page (i.e., the portion of proposed
Form 15A that would precede Section I) would include a series of
structured checkboxes to indicate the basis for filing the Form, and
the reporting period to which the Form applies. Structured checkboxes
and pick lists are more relevant to the filtering and sorting benefits
enabled by structured data requirements. For example, structuring the
checkboxes on the Form 15A execution page would enable a data user to
retrieve only those Form 15As that are current supplements to
registration reported pursuant to Rule 15Aa-2(b) of the Exchange Act,
and further filter those results to only those Form 15A filings that
include a change to Exhibit C (list of members).
    Third-party structured data service providers (including providers
of structured data compliance services and/or software, as well as
providers of structured data research software) would also likely
realize benefits as a result of the proposed rule amendments. Most
affected entities would be newly required to file or submit structured
data, resulting in additional clients/customers and revenues for third-
party structured data compliance service providers. Similarly, some
users of the affected documents would likely seek to use third-party
structured data research software to facilitate their analysis of the
structured data, resulting in additional customers and revenues for
third-party structured data research software providers.
    The Commission is proposing a specific structured data language for
each Proposed Structured Document, rather than leaving the structured
data language requirement open-ended (i.e., requiring only that the
Proposed Structured Document be provided in a structured, machine-
readable data language). Specifying a single structured data language
that a filer or submitter must use for each Proposed Structured
Document would benefit users of the disclosed information, including
investors, market participants, other filers or submitters, information
intermediaries, and the Commission, because it would help ensure the
disclosures are provided in a uniform structured data language that is
most suitable for the document in question, and would prevent a
potential coordination failure that could occur if different
respondents chose to provide inputs in different data languages.

    By contrast, an open-ended data language requirement would allow
different filers or submitters of the same document to provide their
disclosures in different data languages. In such instances, data users
such as Commission staff and market participants would be unable to
incorporate disclosures from filers or submitters using one data
language into the same datasets and applications as disclosures of
other filers or submitters using different data languages without
undertaking data conversion processes that are frequently burdensome
and imprecise. This may hinder investors, the Commission, and market
participants from efficiently comparing disclosures across the complete
set of entities within a given filer population, and could therefore
dampen the benefits that would otherwise accrue from requiring the
disclosures to be machine-readable. Thus, specifying the data language
to be used may increase the probability of realizing the anticipated
benefits of machine-readability for users of the Proposed Structured
Documents.
    As noted above, we are requesting comment on all aspects of this
proposal. By specifying the structured data language to be used for
each Proposed Structured Document, we invite comment, including from
affected entities, on the proposed use and effects of the proposed
specified data languages. As further detailed elsewhere in this
economic analysis, different structured data languages have different
implications (e.g., varying compliance costs) for different affected
entities. Thus, proposing a specific structured data language would
allow affected entities to assess the implications of the proposed
specific structured data language to be used, and comment accordingly.
2. Costs
    The proposal would alter the manner in which the affected entities
provide the affected documents, specifically by requiring electronic
submission or posting of the affected documents, and by requiring most
of the content of the affected documents to be provided in a structured
data language. The affected entities already are required to prepare
and submit the affected forms with the Commission pursuant to Exchange
Act rules that currently govern each category of affected entity.\582\
Thus, we generally do not expect the affected entities to incur
incremental costs associated with preparing (e.g., collecting,
drafting, reviewing) the information required to be disclosed in the
affected documents prior to filing or posting under the proposed rule
amendments.\583\ Rather, we expect certain entities to incur
incremental costs associated with structuring the prepared information.
---------------------------------------------------------------------------

    \582\ ANE Exception Notice withdrawals currently are not
required. However, a Registered Entity seeking withdrawal could send
a request to a designated electronic mailbox. See supra note 272 and
accompanying text, and section IX.D.12
    \583\ A subset of SBS broker-dealers would incur additional
costs associated with filing, due to the FOCUS report amendments
that would require them to file information that under the baseline
they currently do not file.
---------------------------------------------------------------------------

a. Electronic Submission and Posting
    As discussed above, a significant number of the entities subject to
the proposed rule amendments already have experience with EDGAR due to
other reporting obligations and thus are not expected to incur EDGAR-
related costs incremental to the proposed rule amendments. Entities
that use EDGAR for purposes of complying with reporting obligations
under existing rules generally are not expected to incur additional
EDGAR access costs due to the proposed rule amendments.\584\ Reporting
entities that do not have experience with EDGAR may incur initial
compliance burdens, including the one-time burden associated with
filing a Form ID for the first time to obtain the access codes needed
to submit an application on the Commission's EDGAR system.\585\ The
Commission estimates that the cost for these entities will be $5,056 on
a one-time basis to become familiar with the EDGAR system for the
purposes of filing for Rules 17a-5, 18a-7, and 17a-12.\586\
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    \584\ If some reporting entities with EDGAR experience require
time to switch the affected documents from paper to EDGAR, they may
incur an additional initial cost.
    \585\ See 17 CFR 232.10(b).
    \586\ See supra section IX.D.9. The one-time cost is estimated
to require sixteen hours of labor from a programmer. 16 hours x $316
per hour = $5,056.
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    Due to the widespread use of the internet, the cost of establishing
and maintaining internet access is not expected to stem from the
proposed amendments. We preliminarily believe that the costs associated
with providing materials pursuant to Rule 17a-22 by registered clearing
agencies on websites, and the costs associated with posting information
currently required on Form 19b-4(e) by SROs, in addition to the reduced
timeframe for compliance, is likely not to add significant costs to a
registered clearing agencies' 17a-22 obligations or an SRO's 19b-4(e)
obligations.
    The proposed rule contains several amendments related to FOCUS
reports, which could impose burdens on market participants. The
proposed amendments to FOCUS Report Part II are expected to result in
an initial burden of $2,130 on each Part II filer so firms can
familiarize themselves with the amendments to FOCUS Report Part
II.\587\ These proposed amendments are expected to either have no
impact on or reduce the ongoing burden on the vast majority of filers,
because they will reduce questions about where and how to report items
on the form. However, because the proposed amendments require stand-
alone swap dealers and stand-alone introducing brokers to complete a
new section of FOCUS Report Part II that these types of firms were not
previously required to complete (i.e., Computation of CFTC Minimum
Capital Requirements), these amendments are likely to result in an
ongoing annual burden of $426 hour per stand-alone swap dealer or
stand-alone introducing broker.\588\
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    \587\ 5 hours x $426 per hour (compliance attorney) = $2,130.
    \588\ 1 hour x $426 per hour (compliance attorney) = $426.
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    The proposed amendments to Part IIC are expected to result in an
initial burden of five hours on each bank SBS Entity so that firms can
compare the revised FOCUS Report Part IIC with FFIEC Form 031. However,
these proposed amendments are expected to either have no impact on or
reduce the ongoing burden on bank SBS Entities, because they will
reduce questions about how to complete FOCUS Report Part IIC
consistently with FFIEC Form 031.
    The proposed amendment to signature requirements for the FOCUS
report is expected to result in an initial burden of $426 on each filer
so that the firm can review the standards for an electronic signature
on the FOCUS Report Part II, IIA, or IIC, as applicable.\589\ However,
this proposed amendment is expected to either have no impact on or
reduce the ongoing burden on FOCUS Report filers, because they will not
be required to furnish as many signatures as before the amendment, and
it may be easier to prepare electronic signatures rather than manual
signatures since firms will already be familiar with the process and
can easily obtain these signatures while working remotely.
---------------------------------------------------------------------------

    \589\ 1 hour x $426 per hour (compliance attorney) = $426.
---------------------------------------------------------------------------

    The proposed amendment to OTC derivatives dealer requirements is
expected to result in an initial burden of $4,740 on each OTC
derivatives dealer so that the firm can familiarize itself with the SEC
eFOCUS system.\590\

However, this proposed amendment is expected to either have no impact
on or reduce the ongoing burden on OTC derivatives dealers, because
filing the FOCUS Report electronically is an automated process as
compared to filing by paper. In addition, OTC derivatives dealers are
required to be affiliated with a broker-dealer, which means that OTC
derivatives dealers' operational staff already are familiar with the
FINRA eFOCUS system's interface, and can use the same preexisting
templates, software, and procedures currently used by the broker-dealer
to file FOCUS Reports on the FINRA system.
---------------------------------------------------------------------------

    \590\ 15 hours x $316 per hour (programmer) = $4,740.
---------------------------------------------------------------------------

b. Structured Data
    The Commission expects that certain structured data requirements
under the proposed amendments would impose additional compliance costs
on affected entities. Specifically, the Commission believes the
proposed Inline XBRL requirements for Form 1, Form CA-1, Form X-17A-5
Part III and related annual filings, Form 17-H, and the CCO reports
would result in additional compliance costs, both initial and ongoing,
for the SROs, broker-dealers (including OTC derivatives dealers), and
SBS Entities filing or submitting those documents relative to the
current baseline, because those entities would be newly required to
apply Inline XBRL tags to the documents before filing or submitting
them to the Commission (or pay a third-party tagging service provider
to do so).
    The Commission does not expect the proposed requirements to provide
Form X-17A-19, the execution pages of the Covered SRO Forms, the facing
page of Form X-17A-5 Part III, the facing page and Part II of Form 17-
H, and the notices to the Commission (and any amendments to the
notices) required by Exchange Act Rule 15fi-3(c) using custom XML-based
data languages would impose similar structured data implementation
costs on the SROs, broker-dealers, and SBS Entities that would be
subject to those requirements. For the custom XML requirements on
proposed EDGAR filings, EDGAR would provide filers or submitters with
the option of using a fillable web form that would convert inputted
disclosures into the relevant custom XML.\591\ Other than the exchanges
and clearing agencies filing Form 1 and Form CA-1, respectively, we
expect these entities to input their disclosures into the fillable
EDGAR web form, and thus avoid compliance costs associated with
structuring disclosures in custom XML data languages. By contrast, we
expect exchanges and clearing agencies, which would be subject to more
extensive custom XML disclosure requirements as a result of the
proposed rule amendments, would have the requisite sophistication to
encode their Exhibit disclosures in custom XML and submit the custom
XML Exhibits to EDGAR directly rather than manually completing lengthy
fillable forms to be converted into custom XML documents.\592\ This
would cause exchanges and clearing agencies to incur implementation
costs associated with integrating any new or updated custom XML schemas
into their existing data systems.\593\ Nonetheless, exchanges and
clearing agencies may find direct submission in custom XML beneficial,
because it allows for greater automation in the process of submitting
data that is already structured directly to EDGAR, and removes the need
for the final manual step of converting structured data into
unstructured information to be typed into fillable web fields.
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    \591\ See supra note 230 at 8.
    \592\ See supra sections II.A.3, II.D.4, and VII.A.
    \593\ See infra text accompanying notes 651 and 659 for related
cost estimates.
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    With respect to the proposed requirement for SROs to post Rule 19b-
4(e) information using the custom XML schema for this information (such
schema would be posted on the Commission's website), the Commission
expects that the SROs would incur higher implementation costs than
those affected entities that are subject to EDGAR custom XML
requirements, because SROs would need to encode the posted information
in accordance with the schema rather than using a fillable web form on
EDGAR. This would also be the case for any entities that choose to
submit EDGAR documents directly in the relevant custom XML data
language rather than use the fillable form that EDGAR provides.
Surveys on Structured Data Costs
    Various XBRL and Inline XBRL preparation solutions have been
developed and used by operating companies and open-end funds to fulfill
their existing structuring requirements under the Commission's rules.
These existing requirements include multiple types of data, including
numerical data in the context of financial statements, numerical data
in the context of tables (along with the tables themselves), simple
text strings, longer textual narratives, numerical data nested within
textual narratives, and checkboxes.\594\
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    \594\ For example, an operating company's annual report on Form
10-K includes iXBRL-tagged checkboxes on the cover page, iXBRL-
tagged company name on the cover page (text string), iXBRL-tagged
numbers on the balance sheet (face financial statement), iXBRL-
tagged tables and numbers therein in the financial statement
footnotes, and iXBRL-tagged textual narratives and numbers therein,
also in the financial statement footnotes.
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    With respect to the magnitude of Inline XBRL compliance costs, an
American Institute of Certified Public Accountants (``AICPA'') survey
of 1,032 public operating companies with $75 million or less in market
capitalization in 2018 found an average cost of $5,850 per year, a
median cost of $2,500 per year, and a maximum cost of $51,500 per year
for fully outsourced XBRL creation and filing.\595\ These figures
represent tagging costs over an entire year, which typically
encompasses the Inline XBRL structuring of financial statements each
quarter. A separate survey of 151 Nasdaq-listed issuers in 2018 found
higher XBRL compliance costs, including an average XBRL compliance cost
of $20,000 per quarter, a median XBRL compliance cost of $7,500 per
quarter, and a maximum XBRL compliance cost of $350,000 per quarter in
XBRL costs per quarter.\596\ Unlike the AICPA survey, the Nasdaq survey
was not limited to smaller reporting companies (i.e., companies with
$75 million or less in market capitalization), nor did it assess trends
in compliance costs over time.
---------------------------------------------------------------------------

    \595\ See AICPA, XBRL Costs for Small Companies Have Declined
45% since 2014 (2018), https://us.aicpa.org/content/dam/aicpa/interestareas/frc/accountingfinancialreporting/xbrl/downloadabledocuments/xbrl-costs-for-small-companies.pdf. As
discussed below in this section, the population of affected filers
or submitters most analogous in size to the companies sampled here
are certain registered broker-dealers.
    \596\ See letter from Nasdaq, Inc. (Mar. 21, 2019), Request for
Comment on Earnings Releases and Quarterly Reports, Release No. 33-
10588 (Dec. 18, 2018), 83 FR 65601 (Dec. 21, 2018). Like the above-
cited AICPA survey, this survey was limited to operating companies.
In addition, both surveys were conducted before the transition from
XBRL to Inline XBRL and before the implementation of cover page
tagging requirements for periodic reports.
---------------------------------------------------------------------------

    This observed variance in XBRL and Inline XBRL compliance costs is
likely attributable to variance in the number of discrete disclosures
(including numbers, blocks of narrative text, checkboxes, etc.)
contained in a tagged document, as well as the complexity of the
specific disclosures to be tagged. Larger, more organizationally
complex entities are likely to have more detailed and complex financial
statements (including footnotes and schedules), and thus have more tags
that they will need to apply to their documents, typically resulting in
higher compliance costs (as described in further detail below in this
section).\597\ To that end, a random

sample of annual reports on Form 10-K filed by Nasdaq-listed companies
for fiscal year 2021 with a parallel sample for companies with a public
float of $75 million or less showed approximately twice as many tagged
Inline XBRL facts in the Nasdaq-listed sample.\598\
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    \597\ See, e.g., Bok Baik, et al., Organizational Complexity,
Financial Reporting Complexity, and Voluntary Disclosure, presented
at the Am. Acct. Ass'n 2020 Virtual Ann. Meeting and Conf. on
Teaching & Learning (Aug. 13, 2020), https://doi.org/10.26226/morressier.5f0c7d3058e581e69b05d16d (finding ``firm complexity is
positively associated with financial reporting complexity holding
all else constant, consistent with the argument Guay et al. (2016)
put forward'').
    \598\ Targeted samples were obtained using data from XBRL and
Inline XBRL EDGAR filings through the Commission's internal
Financial Statement Query Viewer tool. Tagged fact counts were
obtained using ``Firm Complexity (Accounting Reporting Complexity)
Data'' from XBRL Research, available at https://www.xbrlresearch.com/firm-complexity/ (last visited Mar., 8, 2023).
---------------------------------------------------------------------------

Applicability and Variability of Structured Data Costs
    The affected documents that the Commission is proposing to be
required to be structured in Inline XBRL under the proposed rule
amendments consist of the same data types as the documents that are
currently required to be structured in Inline XBRL (e.g., numerical
data in the context of financial statements, numerical data in the
context of tables (along with the tables themselves), simple text
strings, longer textual narratives, numerical data nested within
textual narratives, and checkboxes). Because Inline XBRL tagging
software has already been developed to provide this functionality and
is already in use by public reporting companies to fulfill Inline XBRL
requirements, the Commission expects that vendors would update their
Inline XBRL tagging software to accommodate the proposed Inline XBRL
requirements for Form 1, Form CA-1, Form X-17A-5 Part III, Form 17-H,
and the CCO report, if such requirements are adopted. Because some
filers or submitters of these documents are not currently subject to
Inline XBRL requirements, it is unlikely that they currently use the
Inline XBRL compliance products offered by these vendors. However, as
discussed further below in this section, some filers or submitters are
affiliated with public reporting companies subject to existing Inline
XBRL requirements, and would potentially be able to leverage their
affiliates' Inline XBRL compliance software licenses or service
agreements and experience in complying with the proposed Inline XBRL
requirements.
    The Commission believes the compliance costs associated with the
proposed structured data requirements, as adjusted for inflation, would
likely decrease over time. Affected entities would likely comply with
structuring requirements more efficiently after gaining experience over
repeated filings, though such an effect would likely be diminished for
affected entities that already have experience structuring similar data
in other documents. Third-party vendors of structured data compliance
software or services may decrease the prices of their products over
time; the XBRL compliance costs reported in the 2018 AICPA survey of
smaller operating companies reflect such a trend, as they represented a
45% decline in average cost and a 69% decline in median cost from
2014.\599\
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    \599\ See supra note 627.
---------------------------------------------------------------------------

    The Commission expects the direct relationship between filer size
and compliance costs described earlier in this section would apply to
Inline XBRL compliance costs that would arise under the proposed rule
amendments, and would be particularly relevant to Form X-17A-5 Part III
filers (which include broker-dealers--including OTC derivatives
dealers--and non-bank SBS Entities) for two reasons. First, like public
operating companies, Form X-17A-5 Part III filers would be tagging
financial statements (including footnotes and schedules) in Inline XBRL
under the proposal.\600\ Second, like public operating companies, Form
X-17A-5 Part III filers vary widely in size. For example, on December
31, 2021, approximately 300 broker-dealers reported over $100 million
in total assets, while approximately 1,600 broker-dealers reported less
than $1 million in total assets.\601\ Thus, as discussed in further
detail later in this section, the Commission expects the Inline XBRL
compliance costs for Form X-17A-5 Part III would vary inversely with
size, as has been observed for public operating companies.\602\
---------------------------------------------------------------------------

    \600\ In addition to financial statements and footnotes, Form X-
17A-5 Part III filers would also need to tag their auditor's reports
and other annual reports in Inline XBRL under the proposed rules. By
contrast, public operating companies only need to tag auditor
identification information in their auditor's reports. See Exchange
Act Release No. 93701 (Dec. 2, 2021), 86 FR 70027, 70031 (Dec. 9,
2021).
    \601\ We derive the broker-dealer financial data in this
economic analysis from FOCUS Reports that broker-dealers filed
through FINRA's eFOCUS system for the fiscal period ending Dec. 31,
2021. See supra note 588.
    \602\ See supra notes 627 and 628 and accompanying text for
additional detail on this observed correlation.
---------------------------------------------------------------------------

    We expect the correlation between entity size and tagging cost to
be less relevant to the other populations of entities that would be
subject to Inline XBRL requirements under the proposal, because those
populations are more limited in number and in the variation of size and
complexity across entities within those populations. For example, Form
CA-1 is filed by clearing agencies, including registered and exempt
clearing agencies; there are currently 12 such entities in
operation.\603\ Form 1 is filed by national securities exchanges, of
which there are 24 (and by exempt exchanges, of which there are
currently none).\604\ The CCO report is submitted by SBS Entities, of
which there are 50.\605\
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    \603\ See supra section IX.C.3.
    \604\ See supra section IX.C.1.
    \605\ See supra section IX.C.12.
---------------------------------------------------------------------------

    Some entities that would file or submit the documents to be
structured in Inline XBRL under the proposal may be affiliated with
entities that are subject to Inline XBRL requirements in other filings.
For example, 17 of the 24 national securities exchanges are affiliated
with public companies that file financial statements and cover page
information in EDGAR in Inline XBRL.\606\ In addition, of the largest
20 broker-dealers by asset size as of December 31, 2021, 18 were
affiliated with public companies that file financial statement and
cover page information in Inline XBRL on EDGAR.\607\ To the extent that
an affected entity shares compliance systems with an affiliated
company, or could otherwise leverage the affiliated company's
processes, licenses, service agreements, and/or experience in complying
with Inline XBRL requirements, the affected entity's compliance costs
incurred could likely be mitigated in part.
---------------------------------------------------------------------------

    \606\ See Self-Regulatory Organization Rulemaking, available at
https://www.sec.gov/rules/sro.shtml.
    \607\ This data is derived from FOCUS Reports filed through
FINRA's eFOCUS system for the fourth quarter of 2021. See supra note
588.
---------------------------------------------------------------------------

    As noted above, the Commission is proposing specific structured
data languages for each Proposed Structured Document, rather than
leaving the structured data language requirement open-ended (i.e.,
requiring only that the Proposed Structured Document be provided in a
structured, machine-readable data language). A cost associated with
this approach is that it would constrain the flexibility that filers or
submitters of a Proposed Structured Document would otherwise have in
preparing the Proposed Structured Document. For instance, some filers