[Federal Register Volume 88, Number 74 (Tuesday, April 18, 2023)]
[Proposed Rules]
[Pages 23920-24055]
[FR Doc No: 2023-06330]

Vol. 88

Tuesday,

No. 74

April 18, 2023

Part III

Securities and Exchange Commission

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17 CFR Parts 202, 232, 240, et al.

Electronic Submission of Certain Materials Under the Securities
Exchange Act of 1934; Amendments Regarding the FOCUS Report; Proposed
Rule

Federal Register / Vol. 88 , No. 74 / Tuesday, April 18, 2023 /
Proposed Rules

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 202, 232, 240, 249, and 249b

[Release Nos. 33-11176; 34-97182; IC-34864; File No. S7-08-23]
RIN 3235-AL85

Electronic Submission of Certain Materials Under the Securities
Exchange Act of 1934; Amendments Regarding the FOCUS Report

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

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SUMMARY: The Securities and Exchange Commission (``Commission'' or
``SEC'') is proposing to require electronic filing or submission of
certain forms and other filings or submissions that are required to be
filed with or submitted to the Commission under the Securities Exchange
Act of 1934 (``Exchange Act'') and the rules and regulations under the
Exchange Act. The proposal would require the electronic filing or
submission on the Commission's Electronic Data Gathering, Analysis, and
Retrieval (``EDGAR'') system, using structured data where appropriate,
for certain forms filed or submitted by self-regulatory organizations
(``SROs''). The proposal would require the information currently
contained in Form 19b-4(e) to be publicly posted on the SRO's website
and remove the manual signature requirements for SRO proposed rule
change filings. The Commission is also proposing that a clearing agency
post supplemental material to its website. In addition, the proposal
would amend rules under the Exchange Act and the Securities Act of 1933
(``Securities Act'') to require the electronic filing or submission on
EDGAR, using structured data where appropriate, of certain forms,
reports and notices provided by broker-dealers, security-based swap
dealers and major security-based swap participants. The proposed
amendments also would require withdrawal in certain circumstances of
notices filed in connection with an exception to counting certain
dealing transactions toward determining whether a person is a security-
based swap dealer. Finally, the Commission is proposing to allow
electronic signatures in certain broker-dealer filings, and is
proposing amendments regarding the Financial and Operational Combined
Uniform Single Report (``FOCUS Report'') to harmonize with other rules,
make technical corrections, and provide clarifications.

DATES: Comments should be received on or before May 22, 2023.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/regulatory-actions/how-to-submit-comments); or
     Send an email to [email protected]. Please include
File No. S7-08-23 on the subject line.

Paper Comments

     Send paper comments to Secretary, Securities and Exchange
Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File No. S7-08-23. This file number
should be included on the subject line if email is used. To help the
Commission process and review your comments more efficiently, please
use only one method. The Commission will post all comments on the
Commission's website (https://www.sec.gov/rules/proposed.shtml).
Comments are also available for website viewing and printing in the
Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10 a.m. and 3 p.m.
Operating conditions may limit access to the Commission's public
reference room. All comments received will be posted without change.
Persons submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly.
    Studies, memoranda, or other substantive items may be added by the
Commission or staff to the comment file during this rulemaking. A
notification of the inclusion in the comment file of any such materials
will be made available on the Commission's website. To ensure direct
electronic receipt of such notifications, sign up through the ``Stay
Connected'' option at www.sec.gov to receive notifications by email.

FOR FURTHER INFORMATION CONTACT: For Form 1--Justin Pica, Assistant
Director, and David Remus, Special Counsel; for Form 1-N--David
Dimitrious, Senior Special Counsel, and Michou Nguyen, Special Counsel;
for Form 15A--Molly Kim, Assistant Director, and David Michehl, Special
Counsel; for Form CA-1--Matthew Lee, Assistant Director, and Claire
Noakes, Special Counsel; for Form 19b-4(e) and technical amendment to
Form 19b-4--Cristie March, Senior Special Counsel, and Edward Cho,
Special Counsel; for Rule 17a-22--Matthew Lee, Assistant Director, and
Susan Petersen, Special Counsel; for Form X-17A-5 Part III and related
annual filings, Form X-17A-5 Parts II, IIA, and IIC, Form 17-H, and
Form X-17A-19--Raymond A. Lombardo, Assistant Director, Rose Wells,
Special Counsel, and Valentina Minak Deng, Special Counsel; for notices
provided pursuant to Exchange Act Rules 3a71-3(d)(1)(vi) and 15fi-
3(c)--Carol McGee, Associate Director, and Russell Mancuso, Special
Counsel; and for reports submitted pursuant to Rule 15fk-
1(c)(2)(ii)(A), Kelly Shoop, Branch Chief, and Katherine Lesker,
Special Counsel, Division of Trading and Markets, at<PHONE_NUMBER>,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549.

SUPPLEMENTARY INFORMATION: The Commission is proposing to require the
electronic filing or submission, using structured data where
appropriate, of certain forms and other filings,\1\ which are currently
filed with or submitted to the Commission in paper or via email or are
new filing requirements. The proposal is divided into five parts: (1)
forms that are filed or submitted by or otherwise made available
electronically by SROs (``Covered SRO Forms''); (2) supplementary
materials (``Covered Supplementary Materials'') that are proposed to be
posted on the internet websites of clearing agencies; (3) forms and
related filings filed or submitted by broker-dealers and over-the-
counter derivatives dealers (``OTC derivatives dealers''), as well as
security-based swap dealers (``SBSDs'') and major security-based swap
participants (``MSBSPs'') (each SBSD and each MSBSP also referred to as
an ``SBS Entity'' and together referred to as ``SBS Entities''); (4)
other notices, filings, and reports consisting of (a) Form X-17A-19;
(b) 17 CFR 240.3a71-3(d)(1)(vi) (``Rule 3a71-3(d)(1)(vi)'') Notices;
(c) 17 CFR 240.15Fi-3(c) (``Rule 15fi-3(c)'') Notices; and (d) 17 CFR
240.15Fk-1(c)(2)(ii)(A) (``Rule 15fk-1(c)(2)(ii)(A)'') Compliance
Reports; and (5) amendments regarding the FOCUS Report and signature
requirements in Exchange Act Rules 17a-5, 17a-12, and 18a-7.\2\ The
Commission is proposing

amendments to or relating to the following rules:
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    \1\ For purposes of this proposing release, the term ``form''
means any Commission-created document labeled as a ``Form'' that is
proposed to be submitted or filed electronically, and the term
``filing'' means any form, notice, report, or material proposed to
be submitted or filed electronically or proposed to be posted on an
internet website in lieu of being submitted or filed.
    \2\ The Commission's proposal also includes proposed amendments
to CFR designations in order to ensure regulatory text conforms more
consistently with section 2.13 of the Document Drafting Handbook.
See Office of the Federal Register, Document Drafting Handbook (Aug.
2018 Edition, Revision 1.4, dated January 7, 2022), available at
https://www.archives.gov/files/federal-register/write/handbook/ddh.pdf. For rules proposed to be amended in this release that
contain an uppercase letter in their CFR citations, the Commission
is proposing to amend their CFR section designations to replace each
such uppercase letter with the corresponding lowercase letter, and,
in one case, to also redesignate the rule numbering. For example, 17
CFR 240.15Fi-3 is proposed to be redesignated as 17 CFR 240.15fi-3,
17 CFR 240.15Fk-1 is proposed to be redesignated as 17 CFR 240.15fk-
1, 17 CFR 240.15Aa-1 is proposed to be redesignated as 17 CFR
240.15aa-1, and 17 CFR 240.15Aj-1 is proposed to be redesignated as
17 CFR 240.15aa-2.

------------------------------------------------------------------------
            Commission reference                CFR citation (17 CFR)
------------------------------------------------------------------------
Administrative Practice and Procedure,
 Securities:
    Rule 202.3.............................  Sec.   202.3.
------------------------------------------------------------------------
             Securities Act of 1933 (``Securities Act'') \3\
------------------------------------------------------------------------
Regulation S-T:
    Rule 100...............................  Sec.   232.100.
    Rule 101...............................  Sec.   232.101.
    Rule 201...............................  Sec.   232.201.
    Rule 202...............................  Sec.   232.202.
    Rule 405...............................  Sec.   232.405.
------------------------------------------------------------------------
         Securities Exchange Act of 1934 (``Exchange Act'') \4\
------------------------------------------------------------------------
Rule 3a71-3................................  Sec.   240.3a71-3.
Rule 6a-1..................................  Sec.   240.6a-1.
Rule 6a-2..................................  Sec.   240.6a-2.
Rule 6a-3..................................  Sec.   240.6a-3.
Rule 6a-4..................................  Sec.   240.6a-4.
Rule 15Aa-1................................  Sec.   240.15Aa-1.
Rule 15Aa-2................................  Sec.   240.15Aa-2.
Rule 15Aj-1................................  Sec.   240.15Aj-1.
Rule 15c3-1................................  Sec.   240.15c3-1.
Rule 15fi-3................................  Sec.   240.15Fi-3.
Rule 15fk-1................................  Sec.   240.15Fk-1.
Rule 17a-5.................................  Sec.   240.17a-5.
Rule 17a-12................................  Sec.   240.17a-12.
Rule 17a-19................................  Sec.   240.17a-19.
Rule 17a-22................................  Sec.   240.17a-22.
Rule 17ab2-1...............................  Sec.   240.17ab2-1.
Rule 17h-2T................................  Sec.   240.17h-2T.
Rule 18a-7.................................  Sec.   240.18a-7.
Rule 19b-4.................................  Sec.   240.19b-4.
Rule 19b-7.................................  Sec.   240.19b-7.
Rule 24b-2.................................  Sec.   240.24b-2.
Form 1.....................................  Sec.   249.1.
Form 1-N...................................  Sec.   249.10.
Form CA-1..................................  Sec.   249.200.
Form 17-H..................................  Sec.   249.328T.
Form X-17A-5 Part II.......................  Sec.   249.617.
Form X-17A-5 Part IIA......................  Sec.   249.617.
Form X-17A-5 Part IIC......................  Sec.   249.617.
Form X-17A-5 Part III......................  Sec.   249.617.
Form X-17A-19..............................  Sec.   249.635.
Form X-15AA-1..............................  Sec.   249.801.
Proposed new Form 15A......................  Sec.   249.801 (as proposed
                                              to be amended).
Form 19b-4.................................  Sec.   249.819.
------------------------------------------------------------------------

    Finally, the Commission is proposing to rescind:
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    \3\ See 15 U.S.C. 77a through 77mm.
    \4\ See 15 U.S.C. 78a through 78qq.

------------------------------------------------------------------------
                                                        CFR citation (17
                 Commission reference                         CFR)
------------------------------------------------------------------------
Exchange Act:
    Form X-15AJ-1....................................    Sec.   249.802.
    Form X-15AJ-2....................................    Sec.   249.803.
    Form 19b-4(e)....................................    Sec.   249.820.
------------------------------------------------------------------------

    In developing this proposal with regard to SBS Entities, the
Commission has consulted and coordinated with the Commodity Futures
Trading Commission (``CFTC'') and the prudential regulators in
accordance with the Dodd-Frank Wall Street Reform and Consumer
Protection Act (``Dodd-Frank Act'').\5\
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    \5\ See Public Law 111-203, 124 Stat. 1376 (2010). Section
712(a)(2) of the Dodd-Frank Act provides in part that the Commission
shall ``consult and coordinate to the extent possible with the
Commodity Futures Trading Commission and the prudential regulators
for the purposes of assuring regulatory consistency and
comparability, to the extent possible.''
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Table of Contents

I. Introduction
    A. Experience With Targeted Regulatory Assistance During the
COVID-19 Pandemic
    B. Covered SRO Forms
    C. Covered Supplementary Materials
    D. Filings by Broker-Dealers, OTC Derivatives Dealers, SBSDs,
and MSBSPs
    E. Other Forms, Reports or Notices
    F. Structured Data Requirements
    G. Amendments Regarding the FOCUS Report and Signature
Requirements in Rule 17a-5, 17a-12, and 18a-7 Filings
II. Proposed Requirements To Electronically File Covered SRO Forms
    A. Form 1
    B. Form 1-N
    C. Proposed Form 15A
    D. Form CA-1
    E. Form 19b-4(e)
    F. Rule 19b-4(j) and Form 19b-4
    G. Conforming Technical Amendment to Rule 202.3(b) Under the
Exchange Act
III. Proposed Requirements for Clearing Agencies to Electronically
File Covered Supplemental Materials
    A. Current Rule 17a-22
    B. Updated Staff Statement and Resulting Alternate Arrangements
for Rule 17a-22 Compliance
    C. Proposed Amendments to Rule 17a-22
    D. Request for Comment
IV. Proposed Requirements To Electronically File Broker-Dealer, OTC
Derivatives Dealer, and SBS Entity Reports
    A. Rules 17a-5, 18a-7, and 17a-12
    B. Rule 17h-2T and Form 17-H
V. Other Forms, Reports or Notices
    A. Notices Pursuant To Rule 17a-19 and Form X-17A-19
    B. Notice (and Any Withdrawal of a Notice) Filed Pursuant to
Rule 3a71-3(d)(1)(vi)
    C. Notice (and Any Amendment, Including Notice of Dispute
Termination) Provided Pursuant to Rule 15fi-3(c)
    D. Compliance Reports Submitted to the Commission Pursuant to
Rule 15fk-1(c)(2)(ii)(A)
VI. Amendments Regarding the FOCUS Report and Signature Requirements
in Rule 17a-5, 17a-12, and 18a-7 Filings
    A. Corrective and Clarifying Amendments to the FOCUS Report Part
II
    B. Harmonizing FOCUS Report Part IIC With the Call Report
    C. OTC Derivatives Dealer FOCUS Report Filing Requirement
    D. Signature Requirements in Rule 17a-5, 17a-12, and 18a-7
Filings
VII. Proposed Amendments to Regulation S-T (Including Structured
Data Requirements) and Rule 24b-2
    A. Proposed Amendments to Regulation S-T (Including Structured
Data Requirements)
    B. Proposed Amendments to Rule 24b-2
VIII. General Request for Comments
IX. Paperwork Reduction Act
    A. Summary of Collection of Information
    B. Proposed Use of Information
    C. Respondents
    D. Total Initial and Annual Reporting and Recordkeeping Burdens
    E. Collection of Information is Mandatory
    F. Confidentiality of Responses to Collection of Information
    G. Retention Period for Recordkeeping Requirements
    H. Request for Comments
X. Economic Analysis
    A. Broad Economic Considerations
    B. Baseline
    C. Economic Effects
    D. Efficiency, Competition, and Capital Formation
    E. Reasonable Alternatives
    F. Request for Comment
XI. Initial Regulatory Flexibility Act Analysis
    A. Regulatory Flexibility Act Certification
    B. Initial Regulatory Flexibility Analysis
    C. Reasons for, and Objectives of, the Proposed Action
    D. Legal Basis
    E. Small Entities Subject to the Proposed Rules
    F. Reporting, Recordkeeping, and Other Compliance Requirements
    G. Duplicative, Overlapping, or Conflicting Federal Rules
    H. Significant Alternatives
    I. Request for Comment
XII. Small Business Regulatory Enforcement Fairness Act
Statutory Authority

I. Introduction

A. Experience With Targeted Regulatory Assistance During the COVID-19
Pandemic

    As part of its response to the COVID-19 pandemic, the Commission
and its staff provided assistance and regulatory relief to market
participants, as appropriate, to facilitate the continued orderly and
fair functioning of the securities markets.\6\ As part of these
efforts, Division of Trading and Markets (``Division'') staff issued a
statement providing that the staff would not recommend enforcement
action if filers and registrants made alternative arrangements, as
detailed in the statement, for delivery, execution, and notarization of
certain paper filings.\7\ More specifically, the staff stated that it
would not recommend that the Commission take enforcement action with
respect to any failure to comply with the paper format submission
requirement or manual signature requirement of certain ``Impacted Paper
Submissions'' (as defined in the Updated Staff Statement), which
included, but were not limited to, broker-dealer audited annual
reports, Form 1 filings for national securities exchanges, and Form CA-
1 filings for clearing agencies.
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    \6\ See generally, e.g., An Update on the Commission's Targeted
Regulatory Relief to Assist Market Participants Affected by COVID-19
and Ensure the Orderly Function of our Markets (public statement by
Chairman Jay Clayton, William Hinman, Director, Division of
Corporation Finance, Dalia Blass, Director, Division of Investment
Management, Brett Redfearn, Director, Division (Jan. 26, 2020,
updated Jan. 5, 2021)), available at https://www.sec.gov/news/public-statement/update-commissions-targeted-regulatory-relief-assist-market-participants.
    \7\ See generally Division Updated Staff Statement Regarding
Certain Paper Submissions in Light of COVID-19 Concerns (``Updated
Staff Statement''), available at https://www.sec.gov/tm/paper-submission-requirements-covid-19-updates-061820. Staff reports,
Investor Bulletins, and other staff documents cited in this release
represent the views of Commission staff and are not a rule,
regulation, or statement of the Commission. The Commission has
neither approved nor disapproved the content of these documents and,
like all staff statements, they have no legal force or effect, do
not alter applicable law, and create no new or additional
obligations for any person.
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    In general, electronic filing of Impacted Paper Submissions has
been practical and efficient. It also has been the Commission's
experience that electronic filing has been positively received by the
various registrants that have used it. Based in part on these positive
experiences with electronic filing during the COVID-19 pandemic, and as
part of its efforts to modernize the methods by which it collects and
analyzes information from registrants, the Commission is proposing to
amend some of the rules and forms discussed in this release, as set
forth in more detail below, to require that certain filings be
submitted to the Commission electronically using the Commission's EDGAR
system. As part of the effort to modernize its information collection
and analysis methods, and as discussed more fully below, the Commission
is proposing that a number of the filings submitted to the Commission
electronically on EDGAR use structured data where appropriate.

B. Covered SRO Forms

    The Commission is proposing to require that the following forms be
filed electronically on EDGAR:

------------------------------------------------------------------------
             Form                   Filer type      Proposed amendments
------------------------------------------------------------------------
Form 1: Application for, and    Exchange.........  Amend 17 CFR 249.1
 Amendments to Application                          (``Form 1''),
 for, Registration as a                             including the form
 National Securities Exchange                       and instructions to
 or Exemption from                                  the form, and 17 CFR
 Registration pursuant to                           240.6a-1 (``Rule 6a-
 section 5 of the Exchange Act.                     1''), 17 CFR 240.6a-
                                                    2 (``Rule 6a-2''),
                                                    and 17 CFR 240.6a-3
                                                    (``Rule 6a-3'')
                                                    under the Exchange
                                                    Act.
Form 1-N: Form and Amendments   Exchange.........  Amend 17 CFR 249.10
 for Notice of Registration as                      (``Form 1-N''),
 a National Securities                              including the form
 Exchange for the Sole Purpose                      and instructions to
 of Trading Security Future                         the form, and 17 CFR
 Products Pursuant to section                       240.6a-4 (``Rule 6a-
 6(g) of the Exchange Act.                          4'') under the
                                                    Exchange Act.
Form X-15AA-1: Application for  Securities         Form X-15AA-1 (re-
 Registration as a National      Association.       numbered as Form
 Securities Association or                          15A) and the
 Affiliated Securities                              instructions to the
 Association, Form X-15AJ-1:                        form, and
 Amendatory and/or                                  corresponding
 Supplementary Statements to                        Exchange Act Rule
 Registration Statement of a                        15Aa-1 (redesignated
 National Securities                                as Rule 15aa-1).
 Association or an Affiliated                      Forms X-15AJ-1 and X-
 Securities Association, and                        15AJ-2 (repealed and
 Form X-15AJ-2: Annual                              the information
 Consolidated Supplement of a                       requirements
 National Securities                                incorporated into
 Association or an Affiliated                       new Form 15A),\8\
 Securities Association.                            and corresponding
                                                    Exchange Act Rule
                                                    15Aj-1 (re-numbered
                                                    as Rule 15aa-2).
Form CA-1: Application for      Clearing Agency..  The form and
 Registration or for Exemption                      instructions to the
 from Registration as a                             form, and
 Clearing Agency and for                            corresponding
 Amendment to Registration                          Exchange Act Rule
 Pursuant to the Exchange Act.                      17ab2-1.
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    The Commission's regulatory framework currently requires an entity
seeking to be registered as a national securities exchange (or seeking
an exemption from such registration based on limited volume), a
national securities association, a clearing agency (or seeking an
exemption from such registration), and a national securities exchange
solely for the purpose of trading futures on individual stocks or on
narrow-based stock indexes \9\ (``Security Futures Product Exchange'')
to file, in a paper-based format, certain forms that are mandated by
rules under the Exchange Act. Registered national securities exchanges,
registered national securities associations, registered clearing
agencies, and registered Security Futures Product Exchanges
(collectively, SROs), as well as exempt exchanges and exempt clearing
agencies (together with prospective SROs, ``Filers''), are also
required to submit paper-based amendments to their respective forms.
The Commission's proposal would modernize the filing process for these
various forms by requiring that the forms and information contained
therein be submitted to the Commission electronically, thereby removing
the burden of preparing and submitting paper forms by the Filers, and
of receiving, acting upon, and maintaining the paper forms by the
Commission and its staff.
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    \8\ See 17 CFR 249.802 and 803. The forms and instructions to
the form are incorporated by reference into the Code of Federal
Regulations.
    \9\ Futures on individual stocks or on narrow-based stock
indexes are hereinafter referred to as ``security futures
products.''
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    In particular, as required by 17 CFR 240.6a-1 (``Rule 6a-1''), 17
CFR 240.6a-2 (``Rule 6a-2''), and 17 CFR 240.6a-3 (``Rule 6a-3'') under
the Exchange Act, a prospective exchange must file on 17 CFR 249.1
(``Form 1'') an application for registration as a national securities
exchange (or for an exemption from the requirement to register as a
national securities exchange based on limited volume), and, once
registered, the exchange must file as an amendment to its Form 1
certain updating information, as well as certain supplemental material
and reports. In addition, as required by 17 CFR 240.6a-4 (``Rule 6a-
4'') under the Exchange Act, a prospective exchange may register as a
Security Futures Product Exchange by filing 17 CFR 249.10 (``Form 1-
N'') (``notice registration'') if it satisfies certain prerequisites,
and must file amendments to its initial filing and certain supplemental
materials on Form 1-N as well. An applicant for registration as a
national securities association must file a registration statement with
the Commission on Form X-15AA-1, and every association applying for
registration or registered as a national securities association must
file amendments and supplements to its registration statement with the
Commission on Form X-15AJ-1 and annual supplements to its registration
statement with the Commission on Form X-15AJ-2. Moreover, as required
by Rule 17ab2-1 (``Rule 17ab2-1'') under the Exchange Act, a
prospective clearing agency must file on Form CA-1 an application for
registration as a clearing agency (or for an exemption from such
registration), and both registered and exempt clearing agencies must
file amendments to their Form CA-1 as necessary. In each of the
foregoing situations, these forms are submitted to the Commission in a
paper-based format. As a result, the prospective and existing SROs,
exempt exchanges, and exempt clearing agencies must incur the costs of
completing their respective paper-based forms, making the requisite
number of copies, and submitting the original version and copies to the
Commission.
    The Commission also is proposing to rescind the following form and
instead require that the information currently contained in the form be
publicly posted on the relevant SRO's internet website:

------------------------------------------------------------------------
             Form                   Filer type       Proposed amendment
------------------------------------------------------------------------
Form 19b-4(e): Information      SRO..............  Rescind the form and
 Required of a Self-Regulatory                      instructions to the
 Organization Listing and                           form, and amend 17
 Trading a New Derivative                           CFR 240.19b-4(e)
 Securities Product Pursuant                        (``Exchange Act Rule
 to Rule 19b-4(e) Under the                         19b-4(e)'').
 Exchange Act.
------------------------------------------------------------------------

    Currently, 17 CFR 240.19b-4(e) (``Rule 19b-4(e)'') under the
Exchange Act requires an SRO to submit to the Commission reports
regarding the listing and trading of new derivative securities products
on Form 19b-4(e) in a paper-based format. As with the forms discussed
above in this section, SROs must incur the costs of completing the
paper-based form, making the requisite number of copies, and submitting
the original version and copies to the Commission.

C. Covered Supplementary Materials

    Rule 17a-22 requires a registered clearing agency to file with the
Commission three copies of any material within 10 days after issuing,
or making generally available, such materials to its participants or to
other entities with whom it has a significant relationship.\10\ A
registered clearing agency for which the Commission is not the
appropriate regulatory agency is required at the same time to file one
copy of such material with its ``appropriate regulatory agency''
(``ARA'').\11\
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    \10\ See 17 CFR 240.17a-22. Such materials are hereinafter
referred to as ``supplementary materials.''
    \11\ See id. When used with respect to a clearing agency, the
term ``appropriate regulatory authority'' is defined under section
3(a)(34)(B) of the Exchange Act to mean broadly the Comptroller of
the Currency, the Board of Governors of the Federal Reserve System
(``Federal Reserve''), or the Federal Deposit Insurance Corporation,
depending on the type of bank that is acting as a registered
clearing agency. See 15 U.S.C. 78c(a)(34).
---------------------------------------------------------------------------

    Since the Commission adopted Rule 17a-22 in 1980, technology has
evolved significantly and the internet has played an increasingly vital
role in information distribution.\12\
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    \12\ See, e.g., The Impact of Recent Technological Advances on
the Securities Market (Sep. 1997), available at https://www.sec.gov/news/studies/techrp97.htm. In this report, the Commission stated
that it was mindful of the benefits of increasing use of new
technologies, such as the internet, to access information more
efficiently.
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    During this period, the Commission has encouraged the dissemination
of information electronically via the internet and other automated
systems and services.\13\ In general, transitioning from a requirement
to file paper with the Commission to an electronic filing requirement
can help improve efficiency and transparency in the securities markets
for registered clearing agencies, its participants and the general
public. Most recently, under the Updated Staff Statement described
above,\14\ registered clearing agencies have established alternate
arrangements to satisfy the requirements of Rule 17a-22 that do not
require the submission of paper filings.
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    \13\ Id; see also, e.g., Commission Interpretation: Use of
Electronic Media, Exchange Act Release No. 42728 (Apr. 28, 2000), 65
FR 25843 (May 4, 2000), available at https://www.sec.gov/rules/interp/34-42728.htm; Press Release: SEC Provides Guidance to Open Up
Use of Corporate websites for Disclosures to Investors (July 30,
2008), available at https://www.sec.gov/news/press/2008/2008-158.htm.
    \14\ See supra note 5.
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    The Commission is now proposing to amend Rule 17a-22 to eliminate
the paper filing requirement altogether and require registered clearing
agencies to post any supplementary materials to its internet website,
as discussed further below.\15\ The Commission believes that the
amended rule would increase efficiency in the distribution of
supplementary materials required under the rule and promote
transparency regarding their contents, as these supplementary materials
are intended to be made generally available to participants in the
clearing agency or other categories of market participants with whom
the clearing agency has a significant relationship. In addition, the
cost associated with the proposal is likely to be less than the costs
currently incurred by clearing agencies utilizing alternative
arrangements consistent with the Updated Staff Statement.
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    \15\ See generally infra section III.
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D. Filings by Broker-Dealers, OTC Derivatives Dealers, SBSDs, and
MSBSPs

------------------------------------------------------------------------
              Form                    Filer type      Proposed amendment
------------------------------------------------------------------------
Form X-17A-5 Part III:            Broker-Dealer,      Require the form
 Information Required Pursuant     Security-Based      to be filed on
 to Rules 17a-5, 17a-12, and 18a-  Swap Dealer,        EDGAR.
 7 under the Exchange Act.         Major Security-
                                   Based Swap
                                   Participant.
Form 17-H: Risk Assessment        Broker-Dealer.....  Require the form
 Report for Brokers and Dealers.                       to be filed on
                                                       EDGAR.
------------------------------------------------------------------------

    The Commission believes that the certain forms and other filings
that are proposed to be filed on EDGAR by broker-dealers, OTC
derivatives dealers, SBSDs, and MSBSPs are appropriate for electronic
filing because many of them are voluminous (in number, size, or both)
and some of them contain certain information that must be disclosed
publicly.\16\ Electronic conversion and/or publication of these filings
by Commission staff, to make them available to the public and/or
Commission staff, can be labor intensive and time consuming. The
Commission believes that requiring submission of these filings on the
Commission's established EDGAR filing system would facilitate more
efficient transmission, analysis, dissemination, storage, and retrieval
of information, and would benefit the Commission, the submitting
entities, investors, and other market participants.
---------------------------------------------------------------------------

    \16\ See generally infra section IV.
---------------------------------------------------------------------------

    The Commission is proposing to use the existing EDGAR system for
certain filings because Form X-17A-5 Part III and Form 17-H are already
permitted to be filed on EDGAR and the Commission believes that some of
these filings may be readily transitioned to electronic filing on
EDGAR.

E. Other Forms, Reports or Notices

------------------------------------------------------------------------
                                    Filer/submitter
     Form, report or notice              type         Proposed amendment
------------------------------------------------------------------------
Form 17a-19: Information          National            Require the form
 Required of National Securities   securities          to be filed on
 Exchanges and Registered          exchanges,          EDGAR.
 National Securities               national
 Associations Pursuant to          securities
 Section 17 and 19 of the          associations.
 Securities Exchange Act of 1934
 and Rule 17a-19 Thereunder,
 Report of Change in Membership
 Status.

Notices (and any withdrawals of   Certain registered  Require the
 notices) filed pursuant to Rule   SBSDs or            notices and
 3a71-3(d)(1)(vi) under the        registered          withdrawals to be
 Exchange Act.                     brokers that meet   filed on EDGAR;
                                   certain capital     require
                                   and other           withdrawal in
                                   requirements.       specified
                                                       circumstances.
Notices (and any amendments to    SBS Entities......  Require the
 the notices) of Security-Based                        notices (and any
 Swap Valuation Disputes                               amendments to the
 pursuant to Rule 15fi-3(c).                           notices) to the
                                                       Commission to be
                                                       submitted on
                                                       EDGAR using
                                                       structured data;
                                                       specify that
                                                       notices
                                                       (including
                                                       amendments)
                                                       required to be
                                                       provided to any
                                                       applicable
                                                       prudential
                                                       regulator be in a
                                                       form and manner
                                                       acceptable to
                                                       such prudential
                                                       regulator.
Compliance Reports Submitted to   SBS Entities......  Require reports to
 the Commission pursuant to Rule                       be submitted on
 15fk-1(c)(2)(ii)(A).                                  EDGAR in a
                                                       structured data
                                                       language.
------------------------------------------------------------------------

    The Commission is proposing to use the EDGAR system for the
following notices, reports, and filings: (1) notices made pursuant to
Rule 17a-19 under the Exchange Act and on accompanying Form X-17A-19;
(2) notices made pursuant to Rule 3a71-3(d)(1)(vi) under the Exchange
Act; (3) notices made to the Commission pursuant to Rule 15fi-3(c)
under the Exchange Act; and (4) reports made pursuant to Rule 15fk-
1(c)(2)(ii)(A) under the Exchange Act. Currently, the notices made
pursuant to Rule 17a-19 under the Exchange Act and on accompanying Form
X-17A-19 are submitted via paper.\17\ The notices made pursuant to Rule
3a71-3(d)(1)(vi) under the Exchange Act are filed via email.\18\ The
notices made to the Commission pursuant to Rule 15fi-3(c) and the
reports required under Rule 15fk-1(c)(2)(ii)(A) are either submitted
via email or submitted on EDGAR, at the filer's option.\19\
---------------------------------------------------------------------------

    \17\ See infra section V.A.
    \18\ See infra section V.B.
    \19\ See infra section V.C. Rule 15fi-3(c) requires that SBS
Entities ``notify the Commission'' (emphasis added). See infra
section V.C.1. Requiring these notices and amendments to be
submitted to the Commission via EDGAR as proposed would not cause
them to be deemed filed for purposes of the Exchange Act. See e.g.,
section 18 of the Exchange Act. 17 CFR 240.15Fk-1(c) (``Rule 15fk-
1(c)'') requires that the chief compliance officer of an SBS Entity
prepare and sign an annual compliance report that ``shall [b]e
submitted to the Commission.'' 17 CFR 240.15Fk-1(c) (emphasis
added). Requiring these reports to be submitted via EDGAR as
proposed would not cause the report to be deemed filed for purposes
of the Exchange Act.
---------------------------------------------------------------------------

F. Structured Data Requirements

    The Commission is proposing to require certain of the disclosures
required by the following filings to be provided in a structured,
machine-readable data language: (1) the Covered SRO Forms; (2) the
information required under Rule 19b-4(e); (3) Form X-17A-19; (4) the
annual reports (and related annual filings) filed by broker-dealers
(including OTC derivatives dealers) and SBS Entities on Form X-17A-5
Part III; (5) the risk assessment reports filed by certain broker-
dealers on Form 17-H; and (6) the notices and reports provided to the
Commission by SBS Entities under Exchange Act Rules 15fi-3(c) and 15fk-
1(c)(2)(ii)(A), respectively (together, the ``Proposed Structured
Documents'').\20\
---------------------------------------------------------------------------

    \20\ For certain affected documents, only some aspects are
proposed to be provided in a structured data language. For example,
only the execution pages of Form 1-N and Form 15A are proposed to be
provided in a structured data language. See infra section VII.A.
---------------------------------------------------------------------------

    Specifically, the Commission is proposing to require the report
required by Exchange Act Rule 15fk-1(c)(2)(ii)(A) and portions of Form
1, Form CA-1, Form 17-H, and Form X-17A-5 Part III and related annual
filings to be provided in the Inline eXtensible Business Reporting
Language (``Inline XBRL'') structured data language. The Commission is
also proposing to require Form X-17A-19, the notice to the Commission
(and any amendments to the notices) required by Exchange Act Rule 15fi-
3(c), and portions of Form 1-N, Form 15A, Form 1, Form CA-1, Form 17-H,
and Form X-17A-5 Part III and related annual filings to be provided in
machine-readable, eXtensible Markup Language (``XML'')-based data
languages specific to those documents (``custom XMLs''). As noted,
these structured documents would be filed or submitted on EDGAR.\21\
---------------------------------------------------------------------------

    \21\ The details of the proposed structured data requirements,
including the specific portions of affected documents that would be
structured in Inline XBRL versus custom XML, are discussed in
Section VII.A below.
---------------------------------------------------------------------------

    In addition, the Commission is proposing to require SROs to
electronically post the information required under Rule 19b-4(e) using
a custom XML-based data language (also referred to as a ``schema'')
that the Commission would create and publish on its website for SROs to
use.\22\ The Commission is also proposing to require SROs to post a
rendered Portable Digital Format (``PDF'') version of the custom XML
document using a PDF renderer that the Commission would also create and
publish on its website for SROs to use.\23\
---------------------------------------------------------------------------

    \22\ This requirement would mirror the existing requirement for
registered broker-dealers to electronically post reports containing
order routing information using the most recent versions of the XML
schema and the associated PDF renderer as published on the
Commission's website. See 17 CFR 242.606. The custom XML schema and
PDF renderer for Rule 606 reports are available at https://www.sec.gov/structureddata/dera_taxonomies.
    \23\ See id.
---------------------------------------------------------------------------

    As discussed in further detail below, the Commission believes the
proposed structured data requirements would facilitate access to the
disclosures by users (e.g., investors, market participants, analysts,
the Commission), enabling more efficient retrieval, aggregation, and
comparison across different filers and time periods, as compared to an
unstructured PDF, HyperText Markup Language (``HTML''), or American
Standard Code for Information Interchange (``ASCII'') requirement.\24\
---------------------------------------------------------------------------

    \24\ See infra sections VII.A and X.C. The addition of
structured data requirements would also be generally consistent with
objectives of the recently enacted Financial Data Transparency Act
(``FDTA''), which concerns the manner in which the Commission
collects and disseminates information. The FDTA was signed into law
on Dec. 23, 2022, as Title LVIII of the James M. Inhofe National
Defense Authorization Act for Fiscal Year 2023. See James M. Inhofe
National Defense Authorization Act for Fiscal Year 2023, Public Law
117-263 (Dec. 23, 2022). Section 5811 of the FDTA directs the
Commission and other covered agencies (e.g., financial regulators)
to jointly issue proposed rules for public comment that establish
data standards for the collections of information reported to each
covered agency by financial entities and for the data collected from
covered agencies on behalf of the Financial Stability Oversight
Council. The data standards must meet specified criteria relating to
openness and machine-readability and promote interoperability of
financial regulatory data across members of the Financial Stability
Oversight Council. In addition, Section 5822 of the Financial Data
Transparency Act requires that all public data assets published by
the Commission under the securities laws and the Dodd-Frank Act be
made available in accordance with specified criteria relating to
openness and machine-readability. See 44 U.S.C. 3502(20) (defining
the term ``open Government data asset'' to mean, among other things,
machine-readable and available (or could be made available) in an
open format).
---------------------------------------------------------------------------

    The Commission is proposing some disclosures to be structured in
Inline

XBRL, and other disclosures to be structured in custom XML, because the
Commission believes Inline XBRL is well-suited for certain types of
content--such as financial statements and extended narrative
discussions--whereas other types of content can be readily captured
using custom XML data languages that yield smaller file sizes than
Inline XBRL and thus facilitate more streamlined data processing. Such
custom XML languages also enable EDGAR to generate fillable web forms
that permit affected entities to input disclosures into form fields
rather than encode their disclosures in custom XML themselves, thus
likely easing compliance burdens on affected entities. Finally, certain
of the proposed structured documents--Form X-17A-5 Part III and Form
17-H--are already partially subject to custom XML structured data
requirements when voluntarily filed on EDGAR. For these forms, the
Commission is proposing to require the same custom XML requirements so
as to minimize the associated burdens on registrants already using
these languages for these forms.
    Certain of the proposed structured documents also include
requirements to attach copies of existing documents, such as copies of
by-laws, written agreements, user manuals, and listing applications.
The Commission is proposing to require affected entities to file these
copies of documents as unstructured PDF attachments to the otherwise
structured forms. The Commission believes requiring affected entities
to retroactively structure such existing documents, which were prepared
for purposes outside of fulfilling the Commission's disclosure
requirements, could impose compliance burdens on affected entities that
may not be justified in light of the commensurate informational
benefits associated with having such documents in structured form.\25\
---------------------------------------------------------------------------

    \25\ See infra sections II.A.3, II.D.5, IV.B, and VII.A.
---------------------------------------------------------------------------

    Similarly, Forms 1-N and 15A (other than the cover pages--i.e.,
execution pages--of those Forms) would not be subject to structured
data requirements, given that the very limited number of Form 1-N and
Form 15A filers and filings limits the benefit that would accrue from
machine-readability of the disclosures contained therein.\26\ ANE
Exception Notices also would not be subject to structured data
requirements, as the very limited number of data points in such notices
may lessen the utility of any functionality enabled by structured data
(such as efficient retrieval of individual data points from structured
documents).\27\
---------------------------------------------------------------------------

    \26\ See infra sections II.B.3, II.C.3, and VII.A.
    \27\ See infra sections V.B.2 and VII.A.
---------------------------------------------------------------------------

G. Amendments Regarding the FOCUS Report and Signature Requirements in
Rule 17a-5, 17a-12, and 18a-7 Filings

    Finally, the Commission is proposing amendments regarding the FOCUS
Report to harmonize with other rules, make technical changes, and
provide clarifications. In addition, the Commission is proposing to
allow electronic signatures in Rule 17a-5, 17a-12, and 18a-7 filings,
including the FOCUS Report.

II. Proposed Requirements To Electronically File Covered SRO Forms

    The Commission proposes to amend certain Exchange Act rules and the
Covered SRO Forms, including their instructions, to eliminate the
current paper copy filing method and instead require electronic
submission of the Covered SRO Forms. Changing from the current method
of paper filing to electronic submission of the Covered SRO Forms
ultimately should increase efficiencies and decrease costs for Filers
with respect to their filing obligations.\28\ In addition, the
Commission believes that the electronic filing of the Covered SRO Forms
would facilitate the Commission's oversight of SROs by streamlining the
process of tracking and reviewing the filings made on the Covered SRO
Forms.
---------------------------------------------------------------------------

    \28\ See infra section X.
---------------------------------------------------------------------------

    The proposal would require the use of EDGAR to file the Covered SRO
Forms. The Commission is proposing to use the existing EDGAR system for
the Covered SRO Forms because the Commission believes that these
filings are similar to other filings that are currently submitted on
EDGAR. Furthermore, many of the Covered SRO Forms contain information
that must be disclosed publicly, and electronic conversion and/or
publication of these filings by Commission staff, to make them
available to the public and Commission staff, is labor intensive and
time consuming. The Commission believes that requiring the submission
of these filings on EDGAR would facilitate more efficient transmission,
analysis, dissemination, storage, and retrieval of information, and
would benefit the Commission, the submitting entities, investors, and
other market participants. As a result of the proposed amendments to
relevant Commission rules and forms as described below, any Filer of
the Covered SRO Forms who has not previously made an electronic filing
on EDGAR would need to apply for EDGAR access pursuant to the EDGAR
Filer Manual \29\ in order to file documents on EDGAR.\30\
---------------------------------------------------------------------------

    \29\ See https://www.sec.gov/edgar/filermanual.
    \30\ As discussed in more detail in the Paperwork Reduction Act
section of this release, the Commission does not believe that the
Filers of Covered SRO Forms have previously made an electronic
filing on EDGAR. See infra section IX.C (Form ID).
---------------------------------------------------------------------------

    For each of the Covered SRO Forms, the Commission is proposing to
add technical requirements to the form's general instructions to
specify when a form would be considered incomplete or deficient when
filed. Specifically, each Filer would be required to provide all the
information required by the form, including the exhibits, and a filing
that is incomplete or otherwise deficient may be returned to the Filer.
The proposed general instructions for each form also would set forth
what comprises a complete filing. For instance, the proposed general
instructions for Form 1 would state that a completed form filed with
the Commission shall consist of Form 1, responses to all applicable
items, and any exhibits required in connection with the filing.
    The Commission also proposes that, for each of the Covered SRO
Forms, the general instructions would require some or all of the
information reported on the forms (including, where applicable, the
exhibits to the forms) to be provided in a structured, machine-readable
data language. For Form 1 and Form CA-1, the general instructions would
require the submissions to be provided in part using Inline XBRL and in
part using custom XML data languages specific to those Forms, with
certain submissions that constitute copies of existing documents of a
Filer (such as copies of governing documents or copies of contracts) to
be included as text-searchable PDF attachments rather than structured
data.\31\ For Form 1-N and Form 15A, only the cover page (i.e.,
execution page) of each form would be structured in a custom XML data
language, while the remainder of each form would remain unstructured.
For Form X-17A-19, the entire form would be structured in a custom XML
data language. Finally, the information under proposed Rule 19b-
4(e)(2)(ii) would be required to be provided on the listing SRO's
website using a custom XML data language, thus making the information
machine-readable.
---------------------------------------------------------------------------

    \31\ For example, the copies of governing documents that are
required to be attached as Exhibit A to Form 1 and as part of
Exhibit E to Form CA-1 would be included as a PDF attachment, rather
than being structured in Inline XBRL or custom XML. See infra notes
37 and 38.

                           Proposed Structured Data Requirements for Covered SRO Forms
----------------------------------------------------------------------------------------------------------------
                                             Inline XBRL                                     Unstructured PDF
                 Form                        requirements       Custom XML requirements        requirements
----------------------------------------------------------------------------------------------------------------
Form CA-1............................  Schedule A, Exhibits C,  Execution page,          Exhibits A (in part), E
                                        F, H, J, K, L, M, O,     Exhibits A (in part),    (in part), G, P, T.
                                        R, S.                    B, D, E (in part), I,
                                                                 N, Q.
Form 1...............................  Exhibits D, E (in        Execution page,          Exhibits A, B, C (in
                                        part), I.                Exhibits C (in part),    part), E (in part), F,
                                                                 H (in part), J, K, L,    G, H (in part), 17 CFR
                                                                 M, N, 17 CFR 240.6a-     240.6a-3(a)(1) (``Rule
                                                                 3(b) (``Rule 6a-         6a-3(a)(1)'')
                                                                 3(b)'') volume reports.  supplemental
                                                                                materials.
Form 1-N.............................  None...................  Execution page only....  Remainder of form.
Form 15A.............................  None...................  Execution page only....  Remainder of form.
----------------------------------------------------------------------------------------------------------------

    For Form CA-1, Schedule A and Exhibits C, F, H, J, K, L, M, O, R,
and S would be filed in Inline XBRL.\32\ The execution page and
Exhibits A (in part), B, D, E (in part), I, N, and Q would be filed in
custom XML.\33\ Exhibits A (in part), E (in part), G, P, and T would be
filed as unstructured PDF documents.\34\
---------------------------------------------------------------------------

    \32\ Schedule A to the execution page requires certain
descriptive responses to complement the clearing agency's execution
page disclosures. Exhibit C requires a description of the clearing
agency's organizational structure. Exhibit F requires a description
of material pending legal proceedings involving the clearing agency.
Exhibit H requires the clearing agency's financial statements.
Exhibit J requires a description of the clearing agency's services
and functions. Exhibit K requires a description of the clearing
agency's security measures and procedures. Exhibit L requires a
description of the clearing agency's safeguarding measures and
procedures. Exhibit M requires a description of the clearing
agency's backup systems. Exhibit O requires a description of
criteria governing access to the clearing agency's services and a
description of the reasons for imposing such criteria. Exhibit R
requires a schedule of prohibitions and limitations on access to the
clearing agency's services. Exhibit S requires, if applicable, a
statement explaining why the clearing agency should be exempt.
    \33\ The execution page requires identifying information about
the filer and the document being filed. Exhibit A requires, in
relevant part, a list of persons controlling or directing the
management or policies of the clearing agency, and descriptions of
any unwritten agreements or arrangements through which such persons
may exercise control or direction. Exhibit B requires a list of the
clearing agency's officers, managers, and individuals occupying
similar positions. Exhibit D requires a list of persons who are
controlled by, or are under common control with, the clearing
agency, as well as a description of each control relationship.
Exhibit E requires, in relevant part, a list of dues, fees, and
other charges imposed by the clearing agency for its clearing
activities. Exhibit I requires the addresses of all offices in which
the clearing agency conducts its activities, and an identification
of the activities that are performed in each listed office. Exhibit
N requires a list of participants, or applicants for participation,
in the clearing agency. Exhibit Q requires a schedule of fees fixed
by the clearing agency for services rendered by its participants.
    \34\ Exhibit A requires, in relevant part, copies of written
agreements with persons who may control or direct the management or
policies of the clearing agency. Exhibit E requires, in relevant
part, a copy of the currently effective constitution, articles of
incorporation or association, by-laws, rules, procedures and
instruments corresponding thereto, of the clearing agency. Exhibit G
requires copies of all contracts with any national securities
exchange, national securities association or clearing agency or
securities market for which the clearing agency acts as a clearing
agency or performs clearing agency functions. Exhibit P requires
copies of any forms of contracts governing the terms on which
persons may subscribe to clearing agency services provided by the
registrant. Exhibit T requires any conditions, reports, notices or
other submissions to the Commission required as directed in any
Order approving applications for exemption from registration as a
clearing agency.
---------------------------------------------------------------------------

    For Form 1, Exhibits D, E (in part), and I would be filed in Inline
XBRL.\35\ The execution page, Exhibits C (in part), H (in part), J, K,
L, M, N, and the 17 CFR 240.6a-3(b) (``Rule 6a-3(b)'') volume reports
would be filed in custom XML.\36\ Exhibits A, B, C (in part), E (in
part), F, G, H (in part), and the 17 CFR 240.6a-3(a)(1) (``Rule 6a-
3(a)(1)'') supplemental materials would be filed as unstructured PDF
documents.\37\ For Forms 15A and 1-N, only the execution page would be
filed using a structured data language (custom XML).\38\
---------------------------------------------------------------------------

    \35\ Exhibit D requires the unconsolidated financial statements
for the latest fiscal year for each of the exchange's subsidiaries
and affiliates. Exhibit E requires, in relevant part, a description
of the manner of operation of the electronic trading system that the
exchange uses to effect transactions. Exhibit I requires audited
financial statements for the exchange's latest fiscal year.
    \36\ The execution page requires identifying information about
the filer and the document being filed. Exhibit C requires, in
relevant part, information regarding each subsidiary or affiliate of
the exchange, and each entity with whom the exchange has an
agreement relating to the operation of an electronic trading system
to be used to effect transactions on the exchange (such as the name
and address of the organization, a brief description of the nature
and extent of the affiliation, and the a brief description of the
business or functions of the organization). Exhibit H requires, in
relevant part, a schedule of listing fees and a brief description of
the criteria governing which securities may be traded on the
exchange. Exhibit J requires a list of the exchange's officers,
governors, standing committee members, or persons performing similar
functions. Exhibit K requires a list of the exchange's significant
owners, shareholders, or partners. Exhibit L requires descriptions
of the criteria, conditions, and procedures governing membership in
the exchange. Exhibit M requires a list of members, participants,
subscribers, or other users of the exchange, as well as a
description of each user's activities. Exhibit N requires schedules
of securities traded on the exchange. Rule 6a-3(b) of the Exchange
Act requires a report concerning the securities sold on the exchange
during the previous calendar month. See 17 CFR 240.6a-3(b).
    \37\ Exhibit A requires copies of the constitution, articles of
incorporation or association with all subsequent amendments, and of
existing by-laws or corresponding rules or instruments, whatever the
name, of the exchange. Exhibit B requires copies of all written
rulings, settled practices having the effect of rules, and
interpretations of the Governing Board or other committee of the
exchange in respect of any provisions of the constitution, by-laws,
rules, or trading practices of the exchange which are not included
in Exhibit A. Exhibit C requires, in relevant part, copies of the
constitution, a copy of the articles of incorporation or association
including all amendments, and copies of the existing by-laws or
corresponding rules or instruments for each of the exchange's
subsidiaries or affiliates and for each entity with whom the
exchange has an agreement relating to the operation of an electronic
trading system to be used to effect transactions on the exchange.
Exhibit E requires, in relevant part, a copy of the exchange's
users' manual. Exhibit F requires a complete set of all forms
pertaining to membership, participation, or subscription to the
exchange, application for approval as a person associated with a
member, participant, or subscriber of the exchange, or any other
similar materials. Exhibit G requires a complete set of all forms of
financial statements, reports, or questionnaires required of
members, participants, subscribers, or any other users relating to
financial responsibility or minimum capital requirements for such
members, participants, or any other users. Exhibit H requires, in
relevant part, a complete set of documents comprising the exchange's
listing applications, including any agreements required to be
executed in connection with listing. Rule 6a-3(a)(1) of the Exchange
Act requires any material (including notices, circulars, bulletins,
lists, and periodicals) issued or made generally available to
members of, or participants or subscribers to, the exchange. See 17
CFR 240.6a-3(a)(1).
    \38\ The execution page requires identifying information about
the filer and the document being filed.
---------------------------------------------------------------------------

    Similarly, the information under proposed Rule 19b-4(e)(2)(ii)
would be required to be provided on the listing SRO's website using a
custom XML data language, thus making the information machine-readable.

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

----------------------------------------------------------------------------------------------------------------
Rule 19b-4(e) Information............  None...................  Entire Rule 19b-4(e)     The entire posting
                                                                 posting.                 would also be
                                                                                available as a
                                                                                rendered PDF document.
----------------------------------------------------------------------------------------------------------------

    The Commission believes that the proposed requirement that the
Covered SRO Forms be filed, and information pursuant to Rule 19b-4(e)
be posted, using structured data languages would allow the Commission
and, if applicable, investors, market participants, and other
interested parties, to efficiently review and analyze the
information.\39\ In addition, the requirement to file Covered SRO Forms
on EDGAR in a structured data language would enable EDGAR to perform
technical validations (i.e., programmatic checks to ensure the
documents are appropriately standardized, formatted, and complete) upon
intake of the documents, potentially improving the quality of the filed
data by decreasing the incidence of non-substantive errors (such as the
omission of values from fields that should always be populated).
---------------------------------------------------------------------------

    \39\ For more detailed discussions of the anticipated benefits
associated with structured data requirements, see infra sections
VII.A. and X.C.1.b.
---------------------------------------------------------------------------

    Based on the Commission's experience in reviewing the Covered SRO
Forms and information posted pursuant to Rule 19b-4(e), the Commission
also believes that the proposed requirement to electronically file the
Covered SRO Forms and electronically post the information required
pursuant to Rule 19b-4(e) would allow for more efficient use of
Commission resources related to reviewing, assessing, and processing
these filings and postings. In addition, information provided on the
Covered SRO Forms would be captured automatically by EDGAR and would be
text-searchable or machine-readable. The information posted pursuant to
Rule 19b-4(e) would be machine-readable as well. As a result, the
Commission believes that these features would facilitate its oversight
of SROs.
    Substantive changes would not be required to the information
required to be filed on the Covered SRO Forms or the information
required to be posted pursuant to Rule 19b-4(e). Rather, the proposal
is intended simply to require and facilitate the electronic filing of
the Covered SRO Forms and the disclosure of the information required
under Rule 19b-4(e), which the SROs currently are required to provide
to the Commission.

A. Form 1

1. Relevant Statutory Framework
    Section 6(a) of the Exchange Act states, ``[a]n exchange may be
registered as a national securities exchange . . . by filing with the
Commission an application for registration in such form as the
Commission, by rule, may prescribe containing the rules of the exchange
and such other information and documents as the Commission, by rule,
may prescribe as necessary or appropriate in the public interest or for
the protection.'' \40\ Rules 6a-1, 6a-2, and 6a-3 \41\ under the
Exchange Act and Form 1 \42\ set forth the filing requirements for
registration as a national securities exchange and for exempt
exchanges, as well as requirements for the filing of supplemental
material and reports.
---------------------------------------------------------------------------

    \40\ See 15 U.S.C. 78f(a).
    \41\ See 17 CFR 240.6a-1; 17 CFR 240.6a-2; 17 CFR 240.6a-3.
    \42\ See 17 CFR 249.1.
---------------------------------------------------------------------------

2. Current Requirements for Filing Form 1
    Rule 6a-1 under the Exchange Act generally requires that an entity
seeking to register as a national securities exchange, or seeking an
exemption from such registration based on limited volume, file an
application on Form 1 and correct any inaccuracy therein upon
discovery.\43\ Form 1 contains an execution page as well as 14 exhibits
that must be filed by the exchange.\44\ The Form 1 execution page
requires certain basic information from the exchange, such as the name
and street and mailing addresses of the exchange; the name, title, and
telephone number of the exchange's contact employee; and the legal
status of the exchange (e.g., corporation or limited liability
company). The Form 1 exhibits require the exchange to provide, among
other things: its audited financial statements and unconsolidated
financial statements for each subsidiary or affiliate; its governing
documents and rules; the names of its members, participants,
subscribers, and users; information regarding its non-member owners,
shareholders, or partners; and the securities it lists or trades. The
instructions to Form 1 require that one original and two copies of all
the Form 1 materials be filed with the Commission in paper form.\45\
---------------------------------------------------------------------------

    \43\ See 17 CFR 240.6a-1.
    \44\ For purposes of this paragraph, these entities are
collectively referred to as ``exchanges.''
    \45\ See 17 CFR 249.1.
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    Rule 6a-2 requires a registered national securities exchange or an
exempt exchange \46\ to amend its Form 1 as specified therein.
Specifically, pursuant to 17 CFR 240.6a-2(a) (``Rule 6a-2(a)''), an
exchange must file an amendment to its Form 1 within 10 days after it
takes any action that renders any part of its Form 1 execution page or
the information provided in its Form 1 Exhibits C, F, G, H, J, K, or M
inaccurate or incomplete.\47\
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    \46\ For purposes of this paragraph, these entities are
collectively referred to as ``exchanges.''
    \47\ See 17 CFR 240.6a-2(a).
---------------------------------------------------------------------------

    Pursuant to 17 CFR 240.6a-2(b) (``Rule 6a-2(b)''), on or before
June 30 of each year, a national securities exchange or an exempt
exchange \48\ must file amendments to Exhibits D, I, K, M, and N with
the Commission.\49\ Pursuant to 17 CFR 240.6a-2(c) (``Rule 6a-2(c)''),
on a triennial basis, an exchange must file complete Exhibits A, B, C,
and J with the Commission.\50\ Further, 17 CFR 240.6a-2(d) (``Rule 6a-
2(d)'') provides alternative means for satisfying the requirements to
file amendments to certain exhibits.\51\ These alternative means
require that the exchange: (i) on an annual or more frequent basis
publish the information required by the pertinent exhibits, or
cooperate in its publication; \52\ (ii) keep the information up to date
and make it available to the Commission and the public upon request;
\53\ or (iii) make the required information available continuously on
an internet website controlled by the exchange.\54\ As with Form 1
filings pursuant to Rule 6a-1, all amendments to Form 1 pursuant to
Rule 6a-2 currently are submitted in paper form in accordance with the
instructions to Form 1.\55\
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    \48\ For purposes of this paragraph, these entities are
collectively referred to as ``exchanges.''
    \49\ See 17 CFR 240.6a-2(b).
    \50\ See 17 CFR 240.6a-2(c).
    \51\ See 17 CFR 240.6a-2(d). Rule 6a-2(d) applies to information
required to be filed pursuant to paragraphs (b)(2) and (c) of Rule
6a-2. Rule 6a-2(d) sets forth alternative means of providing access
to the information contained in Exhibits A, B, C, J, K, M, and N in
lieu of filing the information with the Commission.
    \52\ See The exchange would need to: (i) identify the
publication in which the information is available, the name,
address, and telephone number of the person from whom such
publication may be obtained, and the price of the publication; and
(ii) certify the accuracy of such information as of its publication
date. 17 CFR 240.6a-2(d)(1).
    \53\ The exchange would need to certify that the information is
kept up to date and is available to the Commission and the public
upon request. 17 CFR 240.6a-2(d)(2).
    \54\ The exchange would need to: (i) indicate the location of
the internet website where such information may be found; and (ii)
certify that the information available at such location is accurate
as of its date. 17 CFR 240.6a-2(d)(3).
    \55\ See 17 CFR 249.1.
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    Pursuant to Rule 6a-3, a national securities exchange or an exempt
exchange \56\ also must file certain supplemental material and reports
with the Commission.\57\ Specifically, Rule 6a-3(a)(1) requires an
exchange to file with the Commission any material issued or made
generally available to members of, or participants or

subscribers to, the exchange within 10 days after issuing or making
such material available to such members, participants or
subscribers.\58\ 17 CFR 240.6a-3(a)(2) (``Rule 6a-3(a)(2)'') provides
that, if information required by Rule 6a-3(a)(1) is available
continuously on a website controlled by the exchange, in lieu of filing
such information, the exchange may indicate the location of the website
where the information can be found, and certify that the information is
accurate as of its date.\59\ Rule 6a-3(b) requires an exchange to file,
within 15 days after the end of each calendar month, a volume report of
securities transactions on the exchange during the calendar month. As
with filings pursuant to Rules 6a-1 and 6a-2, all filings pursuant to
Rule 6a-3 currently are submitted in paper form.\60\
---------------------------------------------------------------------------

    \56\ For purposes of this paragraph, these entities are
collectively referred to as ``exchanges.''
    \57\ See 17 CFR 240.6a-3.
    \58\ See 17 CFR 240.6a-3(a)(1).
    \59\ See 17 CFR 240.6a-3(a)(2).
    \60\ See 17 CFR 240.6a-3(b). This report must set forth: (i) the
number of shares of stock sold and the aggregate dollar amount of
such stock sold; (ii) the principal amount of bonds sold and the
aggregate dollar amount of such bonds sold; and (iii) the number of
rights and warrants sold and the aggregate dollar amount of such
rights and warrants sold. Id.
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    Form 1 filings are currently made available to the public.\61\ Form
1 filings made pursuant to Rule 6a-1 are scanned and the resulting PDF
documents are posted on the Commission's website. Form 1 filings made
pursuant to Rule 6a-2 are scanned and the resulting PDF documents are
uploaded to EDGAR. Form 1 filings made pursuant to Rule 6a-3 are
available for inspection in paper form in the Commission's public
reading room.
---------------------------------------------------------------------------

    \61\ When the Commission previously amended Form 1 and Rules 6a-
1, 6a-2, and 6a-3, it stated that ``[t]he information collected,
retained, and/or filed pursuant to the rules for registration as a
national securities exchange will not be confidential and will be
available to the public.'' Exchange Act Release No. 40760 (Dec. 8,
1998), 63 FR 70844, 70912 (Dec. 22, 1998) (Regulation of Exchanges
and Alternative Trading Systems Adopting Release). Consistent with
this statement, the Instructions to Form 1 specify that ``[n]o
assurance of confidentiality is given by the Commission with respect
to the responses made in Form 1. The public has access to the
information contained in Form 1.''
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3. Proposed Requirement To Electronically File Form 1
    The Commission proposes to amend Rules 6a-1, 6a-2, and 6a-3 under
the Exchange Act, as well as Form 1 and the instructions to Form 1, to
require the electronic filing on EDGAR of all submissions required by
the rules. As explained in section II above, the Commission believes
that, among other benefits, these proposed amendments should increase
efficiencies related to the filing of these forms and the review and
analysis of the filed forms by the Commission and its staff as well as
by investors, market participants, and other interested parties. In
addition, the Commission proposes conforming changes to Rule 3(b)(2) of
its Informal and Other Procedures,\62\ discussed below,\63\ to clarify
that defective applications on Form 1 would be returned to the
applicant and, although permitted as an option under the current rule,
defective applications no longer would be held by the Commission. A
description of the Commission's proposed amendments to Rules 6a-1, 6a-
2, and 6a-3, Form 1, and the instructions to Form 1 to implement the
proposed electronic filing requirement is provided below.
---------------------------------------------------------------------------

    \62\ See 17 CFR 202.3(b)(2).
    \63\ See infra section II.G.
---------------------------------------------------------------------------

a. Proposed Amendments to Rules 6a-1, 6a-2, and 6a-3
    The Commission proposes to add a new paragraph (e) to Rule 6a-1 to
require the electronic filing on EDGAR of all Form 1 filings and
amendments to such filings. The Commission also proposes to amend Rules
6a-2(a), (b), and (c) to mandate the electronic filing on EDGAR of the
Form 1 amendments under those paragraphs by requiring the electronic
filing of those amendments, in accordance with proposed 17 CFR 240.6a-
1(e) (``Rule 6a-1(e)'').\64\ Moreover, the Commission proposes to
update in Rule 6a-2(c) the due date for the next filings due pursuant
to Rule 6a-2(c), from June 30, 2001, to June 30, 2025.
---------------------------------------------------------------------------

    \64\ The Commission also proposes a technical amendment to
remove two extraneous commas from the text of Rule 6a-2(a). The
Commission further proposes to amend paragraph (d) of Rule 6a-2 to
clarify that any certifications and other information permitted
under that paragraph in lieu of filing the required documents as
exhibits to Form 1 must be provided using Form 1. The Commission
believes that this proposed change should facilitate compliance with
the Rule 6a-2 requirements by exchanges and exempt exchanges by
clarifying and standardizing the means to file any certifications
and other information submitted pursuant to paragraph (d) of Rule
6a-2.
---------------------------------------------------------------------------

    As stated earlier in this section, Rule 6a-3 requires national
securities exchanges and exempt exchanges to file certain supplemental
material and reports with the Commission after registration or being
granted an exemption from registration. The Commission proposes to
amend Rule 6a-3 to require national securities exchanges and exempt
exchanges to file on EDGAR such supplemental material and reports
electronically on Form 1, in accordance with proposed Rule 6a-1(e).
b. Proposed Amendments to Form 1 and the Form 1 Instructions
    In addition to the proposed revisions to Rules 6a-1, 6a-2, and 6a-
3, the Commission proposes to revise and reformat Form 1, and the
instructions thereto, to accommodate the electronic filing on EDGAR of
initial applications, subsequent amendments, supplemental material, and
reports that are made on Form 1. The proposed changes to Form 1 to
permit electronic submission to the Commission would require minimal
modifications to the form, as described below. The Commission also
proposes to revise the Form 1 instructions to facilitate the electronic
filing and machine-readability of Form 1.\65\ As discussed below,
Commission believes that these proposed revisions to Form 1 would
facilitate the filing and use of the information mandated by Form 1 and
related Rules 6a-1, 6a-2, and 6a-3.
---------------------------------------------------------------------------

    \65\ In addition, the Commission proposes to remove the
definition of the word ``applicant'' from the Form 1 instructions
and replace the word ``applicant'' with the word ``exchange'' on
Form 1. Currently, Form 1 uses both the words ``exchange'' and
``applicant'' to refer to the entity filing the Form 1. The
Commission proposes this technical, non-substantive change to make
consistent the terminology used in Form 1.
---------------------------------------------------------------------------

    The Commission proposes that electronic Form 1 would solicit
information through prompts on the form. Proposed electronic Form 1
also would require an exchange to attach exhibits via a new exhibit
table that would be part of electronic Form 1. Where Rule 6a-2 allows
for alternative means of filing the information required under certain
exhibits, the new exhibit table would permit an exchange to
electronically provide the certifications and details necessary for an
exchange to avail itself of those alternative means. The information
required to be filed with the exhibits is not changing. Currently, Rule
6a-2 provides that in lieu of filing certain exhibits as part of a
paper Form 1 submission, an exchange may: (i) identify where such
information is published and certify its accuracy as of its publication
date; (ii) certify that the information is available to the Commission
and the public upon request; or (iii) indicate the location of the
internet website where such information may be found and certify that
the information available at such location is accurate as of its
date.\66\ The proposal would not change the availability of these
alternative means, only the method of providing the necessary
certifications and details. As described above, instead of attaching
paper exhibits, the proposal would require the exhibits to be submitted

electronically on EDGAR. Similarly, instead of providing on paper the
certifications and details required for an exchange to avail itself of
these alternative means, the proposal would require those
certifications and details to be provided via the electronic Form 1. In
the event an exchange indicates on Form 1 an internet website where
such information may be found, where applicable, the Commission
proposes to require the exchange to provide on Form 1 the Uniform
Resource Locator(s) (``URL(s)'') of the location(s) on the internet
website where such information may be found, and to certify that
information posted on such a website is accurate as of its date and is
free and accessible (without any encumbrances or restrictions) by the
general public.
---------------------------------------------------------------------------

    \66\ See 17 CFR 240.6a-2(d).
---------------------------------------------------------------------------

    For electronic Form 1, the Commission proposes to add prompts prior
to Section I that would require the exchange to identify the basis for
submitting the form. Specifically, proposed electronic Form 1 would
require the exchange to check a box stating one of the following: (i)
whether the filing is an initial Form 1 application and if it is,
whether the exchange is applying to be a national securities exchange
or an exempt exchange; (ii) whether the filing is an amendment to an
initial Form 1 application prior to Commission action to grant
registration or an exemption based on limited volume; (iii) whether the
filing is to provide the exchange's consent to an extension of the time
period within which the Commission must take action on an initial Form
1 application; \67\ (iv) whether the filing is to withdraw an initial
Form 1 application prior to the Commission taking action on the
application; (v) whether the filing is an amendment to Form 1 pursuant
to Rule 6a-2 following the Commission's granting of registration or an
exemption; or (vi) whether the filing is supplemental material or
reports pursuant to Rule 6a-3.\68\ Currently, there is no place on Form
1 for an exchange to indicate the type of filing that it is submitting.
For example, current Form 1 does not provide an exchange the ability to
indicate whether an initial Form 1 filing is an application to be a
national securities exchange or an exempt exchange. Accordingly, the
Commission believes that capturing information regarding the type of
Form 1 filing would facilitate the exchange's communication with the
Commission and help the Commission more efficiently review Form 1
submissions.
---------------------------------------------------------------------------

    \67\ Such consents to an extension of the time period within
which the Commission must take action currently are submitted as
letters in paper form. Adding the ability to indicate that the
exchange consents to an extension of time on electronic Form 1 would
streamline the process for making such a submission. See 15 U.S.C.
78s(a)(1)(B).
    \68\ The Commission also proposes to amend the instructions to
Form 1 to add a new section titled ``When to Use the Form,'' which
would explain when Form 1 filings are required.
---------------------------------------------------------------------------

    The proposed electronic Form 1 would also capture contact
information for the exchange and certain individuals. Consistent with
current Form 1, the proposed electronic Form 1 would require the
exchange to identify contact information for the exchange, a contact
employee, and counsel for the exchange. Unlike current Form 1, proposed
electronic Form 1 would additionally require an email address for the
contact employee. The Commission believes that the requirement to
provide an email address for the exchange contact employee would
expedite communications between Commission staff and the relevant
exchange.
    Proposed electronic Form 1 would require an exchange to
electronically attach exhibits by using an exhibit table. The proposed
exhibit table would contain columns for the name of the exhibit,
information required by the exhibit, whether alternative means of
satisfying the filing of an exhibit are available for that particular
exhibit (e.g., URL(s)), if permitted by applicable Commission rule, and
checkboxes to indicate whether such alternative means are being
used.\69\ The information proposed to be required by the exhibits to
electronic Form 1 would remain the same as current Form 1. In addition,
to facilitate the electronic filing of the supplemental materials
required under 17 CFR 240.6a-3(a) (``Rule 6a-3(a)'') and the volume
reports required under Rule 6a-3(b), the Commission proposes to add new
Sections III and IV, respectively, to Form 1. Sections III and IV would
not add new requirements beyond those currently included in Rules 6a-
3(a) and (b). Currently, Rule 6a-3(a) requires exchanges to file
certain information with the Commission or, in the alternative, to
indicate where such information can be found on an internet website
controlled by the exchange. The proposal would require the filing of
this information through Section III of electronic Form 1 or, in the
alternative, to provide through Section III of electronic Form 1 the
URL(s) of the location(s) on the internet website where such
information can be found. If an exchange chooses this latter option and
provides URL(s) of an internet website where such information can be
found, Section III would also clarify that such website must be free
and accessible (without any encumbrances or restrictions) by the
general public. Likewise, Section IV would not change the substance of
what must be filed; it would merely require the filing of the volume
reports required under Rule 6a-3(b) to be made on electronic Form 1
instead of in paper format.
---------------------------------------------------------------------------

    \69\ See supra notes 69-71.
---------------------------------------------------------------------------

    Furthermore, electronic Form 1 would continue to require an
exchange to consent to service of any civil action brought by, or
notice of any proceeding before, the Commission in connection with its
activities. The current language under which the exchange consents to
service via registered or certified mail at the main or mailing address
provided on Form 1 would continue to be included in the electronic
form.\70\
---------------------------------------------------------------------------

    \70\ The Commission also proposes to delete the outdated
provision allowing for service of any civil action pursuant to
confirmed telegram.
---------------------------------------------------------------------------

    In addition, the proposed electronic Form 1 would require the
individual who is submitting the form to check a box on behalf of the
exchange to represent that the information and statements contained in
the Form 1, including exhibits, schedules, or other documents, are
current, true, and complete. The requirement to sign and notarize the
form would be eliminated because it is unnecessary, not compatible
with, and not required for electronic filing on EDGAR.
    Finally, electronic Form 1 would require exchanges to structure
Exhibits D (unconsolidated financial statements of each of the
exchange's subsidiaries or affiliates), E (description of the
electronic trading system's manner of operation, except for the
attached copy of the users' manual), and I (audited financial
statements of the exchange) in Inline XBRL. The execution page,
Exhibits C (information regarding each of the exchange's subsidiaries,
affiliates, and entities with whom the exchange has an agreement
relating to the operation of the exchange's electronic trading system,
except for the copies of existing documents listed below), H (listing
fee schedule and brief description of the criteria governing which
securities may be traded on the exchange, except for the copies of
existing documents listed below), J (list of officers, governors,
standing committee members, or persons performing similar functions), K
(list of significant shareholders or partners), L (description of
criteria, conditions, and procedures governing membership in the
exchange), M (list of members, participants, subscribers, or other
users

of the exchange and description of each user's activities), N
(schedules of securities traded on the exchange), and the information
required under Rule 6a-3(b) (reports regarding the securities sold on
the exchange over the previous calendar month) would also be
structured, albeit in a custom XML data language specific to Form 1
rather than in Inline XBRL.
    Attached copies of existing documents, including those filed with
Exhibits A (constitution, articles of incorporation or association, and
existing by-laws or corresponding rules or instruments of the
exchange), B (written rulings, settled practices having the effect of
rules, and interpretations of the Governing Board or other committee of
the exchange in respect of any provisions of the constitution, by-laws,
rules, or trading practices of the exchange), C (written rulings,
settled practices having the effect of rules, and interpretations of
the Governing Board or other committee of the exchange in respect of
any provisions of the constitution, by-laws, rules, or trading
practices of the exchange's affiliates, subsidiaries, or entities with
whom the exchange has an agreement related to the operation of the
exchange's electronic trading system), E (listing applications and
required agreements), F (forms pertaining to membership, participation,
or subscription, application for approval as a person associated with a
member, participant, or subscriber of the exchange, or any other
similar materials), G (forms of financial statements, reports, or
questionnaires required of members, participants, subscribers, or any
other users relating to financial responsibility or minimum capital
requirements for such members, participants, or any other users), H
(listing applications and agreements required to be executed in
connection with listing), and the information required under Rule 6a-
3(a)(1) (supplemental materials issued or made available to members of,
or participants or subscribers to, the exchange), would be filed as
unstructured PDF documents.

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

------------------------------------------------------------------------
Inline XBRL..................  Exhibits D, E (in part), I.
Custom XML...................  Execution page, Exhibits C (in part), H
                                (in part), J, K, L, M, N, Rule 6a-3(b)
                                monthly reports.
Unstructured PDF.............  Exhibits A, B, C (in part), E (in part),
                                F, G, H (in part), Rule 6a-3(a)(1)
                                supplemental materials.
------------------------------------------------------------------------

    The proposed structuring requirements could facilitate access to
the exchange's disclosures (such as by enabling efficient retrieval of
only those disclosures filed by a subset of exchanges over particular
reporting periods) and their analysis (such as by enabling efficient
comparisons of individual disclosures or sets of disclosures across
different exchanges and reporting periods). This could benefit market
participants through enhanced oversight of the exchanges. For example,
Commission staff could leverage the machine-readability of Exhibit I to
automatically flag any atypical fluctuations in particular financial
line items across every exchange's financial statements, and assess
whether closer examination of any such fluctuations would be warranted.
Similarly, Commission staff could leverage the machine-readability of
Exhibit E by retrieving automated redline comparisons of the manner of
operations description disclosed by exchanges from prior reporting
periods to the current reporting period, thus pinpointing any
widespread operational changes for further assessment.
    Market participants (such as issuers, analysts, and other
exchanges) could also benefit from direct use of the machine-readable
disclosures on Form 1. For example, the structuring requirement for
Exhibit H could allow issuers to more efficiently compare listing fees
charged by different exchanges as they determine the exchange on which
they list their securities. Without the proposed structured data
requirements, these analyses, to the extent they are done, need to be
performed manually, such as by gathering the current and former
financial statements for each exchange and entering all financial line
items of interest into databases, resulting in a significantly less
efficient and precise process. In addition, the proposed structured
data requirement would enable EDGAR to perform technical validations
(i.e., programmatic checks to ensure the documents are appropriately
standardized, formatted, and complete) upon intake of the Form 1
disclosures, thus potentially improving the quality of the filed data
by decreasing the incidence of non-substantive errors (such as the
omission of values from fields that should always be populated).
    The nature and extent of such benefits may vary based on the
content of each Form 1 Exhibit. As discussed in the subsequent economic
analysis, studies of XBRL requirements for public operating company
financial statements indicate a number of benefits for investors and
market participants.\71\ The probability that, and extent to which,
these particular benefits would arise from structured Form 1
disclosures could be heightened for Exhibits D and I, which would
likewise include structured financial statements under the proposed
rule amendments. In addition, the particular benefits of structuring
data would likely vary based on the type of disclosures included in
each particular Exhibit. Structured numerical disclosures, such as
those that would be included on Exhibit I, lend themselves to
mathematical functionality, such as the calculation of key ratios or
the identification of extreme statistical outliers. Structured textual
disclosures, such as those that would be included on Exhibit E, lend
themselves to targeted keyword searching and more sophisticated
sentiment analysis.
---------------------------------------------------------------------------

    \71\ See infra section X.C.1.b.
---------------------------------------------------------------------------

    The Commission is proposing to require Inline XBRL for certain
exhibits to Form 1 and custom XML for others because the Commission
believes each data language is better suited for particular types of
disclosures. Exhibits D and I require disclosure of financial
statements, and Inline XBRL was designed to accommodate financial
statement information, including the particular metadata (e.g., the
relevant fiscal period, whether the line item is on the balance sheet,
whether the line item is a credit or debit) that must be linked to each
data point within the financial statements to fully convey its semantic
meaning to a machine reader. Exhibit E requires narrative disclosure
regarding the trading system's manner of operations, and whereas custom
XML data languages only have the capacity to accommodate brief
narrative descriptions, Inline XBRL can accommodate longer narrative
descriptions with presentation capabilities that preserve human-
readability while maintaining machine-readability.\72\
---------------------------------------------------------------------------

    \72\ Compare, for example, the Inline XBRL requirement for the
description of investment strategies that open-end funds disclose on
Form N-1A to the custom XML requirement for the brief description of
the applicant's business that SBS Entities disclose on Form SBSE.
See Item 4 of Form N-1A; Item 7 of Form SBSE.

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

    The execution page of Form 1, Exhibits C (in part), H (in part), J,
K, L, M, and N to Form 1, and the Rule 6a-3(b) reports filed on Form 1
do not require such content. For these disclosures, the Commission
believes the use of custom XML data languages would be preferable to
Inline XBRL, because it would yield smaller file sizes and therefore
enable more streamlined processing of the information.\73\ The
Commission believes requiring custom XML rather than Inline XBRL for
these disclosures would also be preferable because it would enable
EDGAR to generate fillable web forms that would permit exchanges to
input their disclosures into form fields rather than structure their
disclosures in custom XML themselves. This added flexibility could ease
the burden of compliance on exchanges in some instances, although
exchanges may have the requisite sophistication to encode the
disclosures in custom XML themselves without relying on fillable web
forms.\74\
---------------------------------------------------------------------------

    \73\ See also infra section X.E.4 (discussing other structured
data languages that would result in smaller file sizes than Inline
XBRL).
    \74\ See infra note 458, as well as the text accompanying note
654.
---------------------------------------------------------------------------

    The proposed approach of requiring Inline XBRL for some Form 1
exhibits and custom XML for others would entail drawbacks for users of
the information (including Commission staff and market participants).
Specifically, data users would be unable to incorporate the Inline XBRL
disclosures filed on Form 1 into the same datasets and applications as
the custom XML disclosures filed on Form 1, and run analyses across the
differently formatted Form 1 disclosures, without undertaking data
conversion processes that are frequently burdensome and imprecise.
Similarly, any technical validations programmed into EDGAR would be
unable to check for any inappropriate inconsistencies between
disclosures on Inline XBRL exhibits and disclosures on custom XML
exhibits on a given Form 1, thus reducing the benefit of improved data
quality that would be likely to result from structured data
requirements. Finally, some Form 1 filers may already be using Inline
XBRL to structure similar data for internal business purposes, such as
through the use of Enterprise Resource Planning (``ERP'') systems;
these filers may prefer to use Inline XBRL for all proposed structured
data requirements of Form 1, rather than using a combination of Inline
XBRL and custom XML.\75\ Nonetheless, the Commission believes the
streamlined data processing associated with the smaller sizes of the
proposed custom XML exhibits, as described earlier in this section,
would justify any such drawbacks.
---------------------------------------------------------------------------

    \75\ See infra note 570 (discussing the prevalence of XBRL
integration into ERP systems).
---------------------------------------------------------------------------

    The Commission is proposing to require exchanges to file copies of
existing documents, such as copies of by-laws, written agreements, and
listing applications, as unstructured PDF attachments. The Commission
believes an unstructured PDF requirement would be preferable to a
structured data requirement for these documents, because requiring
exchanges to retroactively structure these existing documents, which
were prepared for purposes outside of fulfilling the Commission's
disclosure requirements, would likely impose costly compliance burdens
on exchanges that may not be justified in light of the commensurate
informational benefits associated with more efficient disclosure use.
Thus, the Commission does not believe structured data requirements are
warranted for these copies of existing documents.
4. Request for Comment
    1. The Commission requests comment on all aspects of the proposed
revisions to Form 1 to facilitate electronic filing on EDGAR. Are there
any aspects of transitioning the form to electronic filing that the
Commission has not addressed above? Please explain.
    2. Would electronic filing of Form 1 on EDGAR and use of Inline
XBRL and custom XML for certain elements of Form 1 filings improve the
usefulness of Form 1 by members of the public? Would any market
participants derive benefit from regulatory use of the Inline XBRL and
custom XML disclosures on Form 1? Please explain why or why not.
    3. What, if any, costs would be associated with preparing Form 1
filings for electronic filing through EDGAR? Are those costs more, less
or the same as those currently expended under the current Form 1 filing
process?
    4. Form 1 filers would be required to prepare certain elements of
Form 1 filings using Inline XBRL and custom XML. Would Form 1 filers
experience practical difficulties or incur significant costs in
preparing and submitting those elements of Form 1 using Inline XBRL and
custom XML? If so, please explain the nature of those difficulties and
costs as well as any alternative approaches the Commission should
adopt.
    5. Would requiring different structured data languages for
different Exhibits of Form 1 provide benefits to data users or filers
that justify any drawbacks associated such an approach? Please explain
the nature of such benefits and drawbacks, and why the benefits would
justify the drawbacks (or vice versa).
    6. If a mix of structured data languages would be appropriate,
should the specific data languages proposed for each Form 1 Exhibit be
modified? For example, are there Form 1 Exhibits proposed as custom XML
documents that would be better suited as Inline XBRL documents, or vice
versa? Please explain why or why not.
    7. Are there other structured data languages (i.e., data languages
other than Inline XBRL and custom XML) that would be more appropriate
for some or all of the Form 1 disclosures? Please explain why or why
not, and, if another structured data language is deemed more
appropriate, please identify.
    8. Would requiring exchanges to file copies of existing documents
as unstructured PDF attachments, rather than requiring exchanges to
retroactively structure those documents in machine-readable data
languages, ease compliance burdens on exchanges? If so, would the
reduced compliance burden on exchanges justify foregoing the benefits
to data users of structuring these existing documents? Please explain
why or why not.

B. Form 1-N

1. Relevant Statutory Framework
    Section 6 of the Exchange Act \76\ sets out a framework for the
registration and regulation of national securities exchanges. The
Exchange Act was amended by the Commodity Futures Modernization Act of
2000 (``CFMA'') \77\ to allow the trading of security futures products.
Under the CFMA, markets that wish to trade security futures products
are regulated jointly by the SEC and the CFTC. The Exchange Act, as
amended by the CFMA, provides that futures exchanges that meet certain
criteria and that wish to trade security futures products may file
notice with the SEC to become a ``Security Futures Product Exchange.''
\78\
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    \76\ See 15 U.S.C. 78f.
    \77\ See Public Law 106-554, Appendix E, 114 Stat. 2763.
    \78\ See 15 U.S.C. 78f(g).
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2. Current Requirements for Filing Form 1-N
    Rule 6a-4 under the Exchange Act \79\ sets forth the notice
registration procedures for Security Futures Product Exchanges and
permits futures

exchanges to submit a notice registration on Form 1-N.\80\ Form 1-N
requires information regarding how the futures exchange operates, its
rules and procedures, corporate governance, its criteria for
membership, its subsidiaries and affiliates, and the security futures
products it intends to trade. Rule 6a-4 also requires entities that
have submitted an initial Form 1-N to file: (1) amendments to Form 1-N
in the event any information provided in the initial Form 1-N is
rendered inaccurate or incomplete; (2) periodic updates of certain
information provided in the initial Form 1-N; (3) certain information
that is provided to the Security Futures Product Exchange's members;
and (4) a monthly report summarizing the Security Futures Product
Exchange's trading of security futures products. The information
required to be filed with the Commission pursuant to Rule 6a-4 is
designed to enable the Commission to carry out its statutorily mandated
oversight functions and to ensure that Security Futures Product
Exchanges continue to be in compliance with the Exchange Act.
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    \79\ See 17 CFR 240.6a-4.
    \80\ See 17 CFR 249.10.
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3. Proposed Requirement To Electronically File Form 1-N
    The Commission proposes to amend Rule 6a-4 under the Exchange Act,
as well as Form 1-N and the instructions to Form 1-N, to require the
electronic filing on EDGAR of all submissions required by the rule and
forms. As explained in section II above, the Commission believes that,
among other benefits, these proposed amendments should increase
efficiencies and decrease overall costs \81\ related to the filing of
these forms and the review of the filed forms by the Commission and its
staff. A description of the Commission's proposed amendments to Rule
6a-4, Form 1-N, and the instructions to Form 1-N to implement this
proposed electronic filing requirement is provided below.
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    \81\ As discussed in more detail in the Economic Analysis, some
entities that currently do not use EDGAR may incur relatively small
initial costs to submit filings on EDGAR and there are some
potential costs associated with structuring certain information.
However, the Commission believes that savings from filing these
forms electronically rather than in paper will be greater than the
costs. See infra X.C.1.a.
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a. Proposed Amendments to Rule 6a-4
    The Commission proposes to add a new paragraph (d) to Rule 6a-4 to
require the electronic filing of Form 1-N on EDGAR for exchange notice
registrations and amendments made under Rule 6a-4 in accordance with
the requirements of Regulation S-T.
    The Commission also proposes changes to the text of Rule 6a-4 to
accommodate electronic filing, as well as to make minor corrections and
clarifications. Specifically, the Commission proposes to modify Rules
6a-4(a)(1) and 6a-4(c)(2) to resolve existing typographical errors and
Rule 6a-4(b)(1)(i) to refer to the appropriate section of Form 1-N,
rather than the ``Execution Page,'' to reflect the shift to electronic
filing. The Commission proposes to modify Rules 6a-4(b)(5)(i), (ii) and
(iii) to delete the phrase ``satisfy this filing requirement by''
because the language is superfluous. The Commission further proposes to
make conforming changes to Rules 6a-4(b)(5)(i)(A) and (B), and 6a-
4(b)(5)(ii) and (iii)(A) and (B) to make clear that certain
certifications by the exchange and listing of websites containing
information required by Rule 6a-4 would be required to be made on
electronic Form 1-N. The Commission further proposes to update the due
dates in Rules 6a-4(b)(3) and (4) for the next annual and triennial
filings from June 30, 2002, and June 30, 2004, to June 30, 2023, and
June 30, 2025, respectively. Finally, the Commission proposes to make
non-substantive changes to Rules 6a-4(a)(1)(i), 6a-4(a)(1)(i)(B) and
6a-4(a)(1)(ii)(B) to update cross-references in those rules to the
Commodities Exchange Act to reflect changes to the Commodities Exchange
Act resulting from the Dodd-Frank Act.
b. Proposed Amendments to Form 1-N and the Form 1-N Instructions
    In addition to the proposed revisions to Rule 6a-4, the Commission
proposes to revise and reformat Form 1-N, and the instructions thereto,
to accommodate the electronic filing of initial notices, subsequent
amendments, supplemental material, and reports that are made on Form 1-
N. The proposed changes to Form 1-N to permit electronic filing to the
Commission would require minimal modifications to the form, as
described below. The Commission also proposes to revise the Form 1-N
instructions to facilitate the electronic filing of Form 1-N. As
explained in the introduction to this section,\82\ these revisions
would address when a form would be considered incomplete or deficient
when filed and use of a custom XML data language for the cover page.
The Commission believes that these proposed revisions to Form 1-N and
the Form 1-N instructions would facilitate the filing of the
information mandated by Form 1-N and Rule 6a-4.
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    \82\ See supra introductory text to section II.
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    The Commission proposes that electronic Form 1-N would solicit
information through prompts on the form that would better organize the
information collected. Proposed electronic Form 1-N also would require
an exchange to electronically attach exhibits (or provide website
URL(s) where applicable) via a new exhibit table that would be part of
electronic Form 1-N. The proposed exhibit table would contain columns
for the name of the exhibit, information required by the exhibit,
whether alternative means of satisfying the filing of an exhibit are
available for that particular exhibit (e.g., URL(s)), if permitted by
applicable Commission rule, and checkboxes to indicate whether such
alternative means are being used. Where Rule 6a-4 allows for
alternative means of filing the information required under certain
exhibits, the new exhibit table would permit an exchange to
electronically provide the certifications and details necessary for an
exchange to avail itself of these alternative means. The information
required to be filed with the exhibits is not changing. Currently, Rule
6a-4 provides that in lieu of filing certain exhibits as part of a
paper Form 1-N submission, an exchange may either: (i) identify where
such information is published and certify its accuracy as of its
publication date; (ii) certify that the information is available to the
Commission and the public upon request; or (iii) indicate the location
of the internet website where such information may be found and certify
that the information available at such location is accurate as of its
date.\83\ The proposal rule would not change the availability of these
alternative means, only the method of providing the necessary
certifications and details. As described above, instead of attaching
paper exhibits, the proposal would require those exhibits to be
submitted electronically. Similarly, instead of providing on paper the
certifications and details required for an exchange to avail itself of
these alternative means, the proposal would require those
certifications and details to be provided via the electronic Form 1-N.
In the event an exchange indicates on Form 1-N the location(s) of an
internet website where such information may be found, where applicable,
the Commission proposes to require the exchange to provide the URL(s)
of the location(s) on the internet website where such information may
be found, to certify that the information posted on such

website(s) is accurate as of its date and is free and accessible
(without any encumbrances or restrictions) to the general public, as an
alternative to filing certain exhibits required by electronic Form 1-N.
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    \83\ See 17 CFR 240.6a-2(b)(5).
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    For electronic Form 1-N, the Commission proposes to add prompts
prior to Section I that would require the exchange to identify the
basis for submitting Form 1-N. Specifically, proposed electronic Form
1-N would require the exchange to check a box stating one of the
following: (i) whether the filing is an initial notice of registration;
(ii) whether the filing is an amendment to the notice of registration;
(iii) whether the exchange is providing its annual filing for the year;
(iv) whether the exchange is providing a triennial filing; (v) whether
the exchange is providing supplemental materials; or (vi) whether the
exchange is providing a report of security futures products traded
during the prior calendar month.
    The Commission also proposes to amend the instructions to Form 1-N
to add a new section titled ``When to Use the Form,'' which would
explain when Form 1-N filings are required, and which of the six types
of Form 1-N filing is required (e.g., initial registration,
supplemental material). Currently, there is no place on Form 1-N for an
exchange to indicate the type of filing that it is submitting, other
than whether it is an application or an amendment. Accordingly, the
Commission believes that capturing information regarding the type of
Form 1-N filing would: (1) enhance the exchange's communication with
the Commission; (2) help the Commission more efficiently review Form 1-
N submissions; and (3) facilitate the searching and sorting through of
Form 1-N submissions by other potential users such as market
participants and investors.
    The proposed electronic Form 1-N would also capture contact
information for the exchange and certain individuals. Consistent with
current Form 1-N, the proposed electronic Form 1-N would require the
exchange to identify contact information for the exchange, a contact
employee, and counsel for the exchange. Unlike current Form 1-N,
proposed electronic Form 1-N would additionally require an email
address for the contact employee and an email address for the
exchange's counsel. The Commission believes that the requirement to
provide an email address for the exchange contact employee and the
exchange's counsel will expedite any subsequent communications between
Commission staff and the relevant exchange.
    In addition, to facilitate the electronic filing of the
supplemental materials and monthly reports required under Rule 6a-4(c),
the Commission proposes to add new Sections III and IV, respectively,
to Form 1-N. Sections III and IV would require such materials and
reports to be attached to Form 1-N via the new exhibit table in the
same manner as exhibits to Form 1-N, and Section III would provide the
exchange with the ability to enter URL(s) to the website location of
the supplemental materials in lieu of its filing the supplemental
materials via Form 1-N. Sections III and IV would not add new
requirements beyond those currently included in Rule 6a-4(c).
Currently, Rule 6a-4(c)(1) requires exchanges to file certain
information with the Commission or in the alternative to indicate where
such information can be found on an internet website controlled by the
exchange. The proposed rule would require the filing of this
information through Section III of electronic Form 1-N or, in the
alternative, to provide through Section III of electronic Form 1-N the
URL(s) of the location(s) on the internet website where such
information can be found. Section III would also clarify that such
website must be free and accessible (without any encumbrances or
restrictions) by the general public. Likewise, Section IV would not
change the substance of what must be reported; it would merely require
the reporting of information required under Rule 6a-4(c) to be made on
electronic Form 1-N instead of in paper format.
    Furthermore, the Commission proposes that electronic Form 1-N would
continue to require an exchange to consent to service of any civil
action brought by, or notice of any proceeding before, the Commission
in connection with its activities. The current language under which the
Security Futures Product Exchange consents to service via registered or
certified mail at the main or mailing address provided on Form 1-N
would continue to be included in the electronically filed form.\84\
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    \84\ The Commission also proposes to delete the provision
allowing for service of any civil action pursuant to confirmed
telegram.
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    In addition, the proposed electronic Form 1-N would require the
individual who is submitting the form to check a box on behalf of the
Security Futures Product Exchange to represent that the information and
statements contained in the Form 1-N, including exhibits, schedules, or
other documents, are current, true, and complete. The requirement to
sign and notarize the form would be eliminated because it is
unnecessary, not compatible with, and not required for electronic for
electronic filing through EDGAR.
    Finally, the proposed electronic Form 1-N would require filers to
submit the execution page in a custom XML data language specific to
Form 1-N. As with the other Covered SRO Forms, filers would be able to
input their execution page disclosures into a fillable web form that
EDGAR would subsequently convert to custom XML. The Commission believes
structuring the execution page in custom XML would improve the ability
to sort, filter, and otherwise organize Form 1-N filings without
creating significant additional burden on Form 1-N filers. The
remainder of Form 1-N would not be structured, however, because the
very limited number of Form 1-N filers and filings could mitigate much
of the benefit derived from machine-readability of the disclosures
contained therein.\85\
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    \85\ See infra Section IX.C.3.
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4. Request for Comment
    9. The Commission requests comment on all aspects of the proposed
revisions to Form 1-N to facilitate electronic filing on EDGAR. Are
there any aspects of transitioning the form to electronic filing that
the Commission has not addressed above? Please explain.
    10. Would allowing for the attachment of exhibits electronically on
Form 1-N or to provide through Section III of electronic Form 1-N the
internet website where such information can be found offer the most
efficient means of complying with the requirements of Form 1-N and Rule
6a-4?
    11. Do commenters agree with the Commission's belief that the
proposed amendments would increase efficiencies and decrease costs
compared to current requirements?
    12. What, if any, costs would be associated with preparing Form 1-N
filings for electronic filing through EDGAR? Are those costs more, less
or the same as those currently expended under the current Form 1-N
filing process?
    13. Do commenters agree with the Commission's belief that
structuring the execution page in custom XML would improve the ability
to sort, filter, and otherwise organize Form 1-N filings without
creating significant additional burden on Form 1-N filers?
    14. Should the Commission require structuring other portions of
Form 1-N (or the entirety of Form 1-N) rather than

only structuring the execution page? Please explain why or why not. If
so, which structured data language or languages should be used for
structuring the other portions of Form 1-N?

C. Proposed Form 15A

1. Relevant Statutory Framework
    Section 15A of the Exchange Act sets forth the statutory standards
for registration as a national securities association or as an
affiliated securities association.\86\ Section 15A(b) states that the
Commission shall not approve registration as a national securities
association unless the Commission determines that the applicant meets
specified statutory criteria.\87\ Under Exchange Act Rule 15Aa-1, an
applicant for registration as a national securities association must
file a registration statement with the Commission on Form X-15AA-1.\88\
The information required to be provided on Form X-15AA-1 includes,
among other things, lists of officers, governors, and committee
members, as well as membership lists.\89\ The Commission reviews the
completed Form X-15AA-1 to evaluate whether the applicant meets the
standards set forth in section 15A(b) for registration as a national
securities association.
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    \86\ See 15 U.S.C. 78o-3.
    \87\ See 15 U.S.C. 78o-3(b).
    \88\ See Exchange Act Rule 15Aa-1 (17 CFR 240.15Aa-1) and Form
X-15AA-1 (17 CFR 249.801). Currently, FINRA is the only national
securities association registered with the Commission. The National
Futures Association (``NFA''), as specified in Section 15A(k) of the
Exchange Act, is also registered as a national securities
association, but only for the limited purpose of regulating the
activities of NFA members that are registered as brokers or dealers
in security futures products under section 15(b)(11) of the Exchange
Act.
    \89\ See 17 CFR 249.801.
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    Furthermore, under Exchange Act Rule 15Aj-1(a), every association
applying for registration or registered as a national securities
association must file with the Commission an amendment to its
registration statement or any amendment or supplement thereto promptly
after discovering any inaccuracy therein. Similarly, under Exchange Act
Rule 15Aj-1(b), every association applying for registration or
registered as a national securities association, promptly after any
change which renders no longer accurate any information contained or
incorporated in its registration statement or in any amendment or
supplement thereto, must file with the Commission a current supplement
to its registration statement setting forth such change.\90\
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    \90\ See Exchange Act Rule 15Aj-1(a) and (b), 17 CFR 240.15Aj-
1(a) and (b). These filings are submitted on Form X-15AJ-1, 17 CFR
249.802. See 17 CFR 240.15Aj-1(d) (requiring that such filings be
made on Form X-15Aj-1).
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    Finally, under Exchange Act Rule 15Aj-1(c), every association
applying for registration or registered as a national securities
association must file annual amendments to its registration statement
with the Commission.\91\
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