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Comment Sought on Broker-Dealer Reporting Proposal

Oct 30 2015

The SEC is seeking comment on a proposed rule by the Securities Investor Protection Corp. (SIPC)to have broker-dealers file supplemental reports that include information about their assessments for SIPC’s insurance fund. The supplemental reports have to also include a report from the broker-dealer’s independent public accountant.

The SEC on October 28, 2015, issued Release No. SIPA-173, Securities Investor Protection Corporation, which seeks public comment on a proposal to have broker-dealers file supplemental reports with the Securities Investor Protection Corp. (SIPC) that include information about their assessments for SIPC’s insurance fund.

The SEC said it wants comments within 21 days of the rules’ publication in the Federal Register, which usually happens within a few weeks of rule’s posting to the SEC’s website.

SIPC, sometimes likened to a sibling of the FDIC but for investors rather than bank depositors, is a 45-year-old program that protects investors against if their broker collapses. Brokers that are members of SIPC pay into the insurance fund and are assessed based on their revenue. The SEC is responsible for overseeing the SIPC.

Release No. SIPA-173 seeks comment on the proposed SIPC Series 600 rules, “Rules Relating to Supplemental Report of SIPC Membership.”

The SIPC proposal deals with supplemental reports filed by broker-dealers with more than $500,000 in revenue. The reports contain information on assessment payments made by the broker-dealer or, if applicable, a statement detailing a broker-dealer’s exclusion from SIPC membership. The documents have to also include a report from the broker-dealer’s independent public accountant.

The report must be filed within 60 days of a broker-dealer’s fiscal year.

 

The SEC’s broker-dealer reporting requirements are contained within Rule 17a-5 of the Securities Exchange Act of 1934. In 2013, the SEC amended the reporting requirements in Release No. 34-70073, Broker-Dealer Reports, to require that brokerage firms be audited by accounting firms regulated by the PCAOB.


***Content from Thomson Reuters Checkpoint 10/30/15

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