SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 240 and 249
Release No. 34-41356; File No. S7-17-96
RIN 3235-AG69
Broker-Dealer Registration and Reporting
AGENCY: Securities and Exchange Commission
ACTION: Final rule
SUMMARY: The Securities and Exchange Commission is amending Form
BDW and related filing procedures under the Securities Exchange
Act of 1934. The amendments implement changes recommended to
allow filings from the World Wide Web. The amendments clarify
Form BDW and its filing procedures. Some other minor rule
revisions relating to the status of Form BDW as a report under
the Securities Exchange Act of 1934 and when a filed Form BDW
becomes effective are also being adopted.
EFFECTIVE DATE: [insert date thirty days after publication in
the Federal Register.]
FOR FURTHER INFORMATION CONTACT: Catherine McGuire, Chief
Counsel, or Brian Baysinger, Attorney, (202) 942-0073, Office of
Chief Counsel, Division of Market Regulation, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C.
20549-1001.
SUPPLEMENTARY INFORMATION
I. INTRODUCTION
As part of its continuing effort to simplify the
registration forms used by broker-dealers, the Securities and
Exchange Commission ("Commission") is revising Form BDW,[1] the
uniform request for broker-dealer withdrawal under the Securities
Exchange Act of 1934 ("Exchange Act").[2] The amendments to Form
BDW adopted today by the Commission are the result of discussions
held among the Commission staff, the Forms/CRD Committee of the
North American Securities Administrators Association, Inc.
("NASAA"), National Association of Securities Dealers, Inc.
('NASD'), the New York Stock Exchange, and representatives of the
securities industry. The amendments adopted today were proposed
in Securities Exchange Act Release No. 37432.[3] The comment
period for the Proposing Release ended on August 19, 1996. No
comments were received.
By simplifying the form and clarifying its requirements, the
revisions are designed to reduce the regulatory burden on broker-
dealers and to improve the usefulness of the information
contained in Form BDW to the Commission, self-regulatory
organizations ("SROs"), and state securities regulators. The
amendments are also designed to implement changes recommended in
connection with changes to the Central Registration Depository
system ('CRD') that will allow filings from the World Wide Web.
The CRD, a computer system operated by the NASD, maintains
registration information regarding broker-dealers and their
registered personnel for use by the Commission, SROs and state
securities regulators.[4] The new system will be known as 'Web
CRD'.[5]
The NASD anticipates Web CRD will become operational on
August 16, 1999. Adoption of the amendments to Form BDW now will
facilitate the NASD’s implementation of the new system. Web CRD
is expected to provide the Commission, SROs, and state securities
regulators with (i) streamlined capture and display of data; (ii)
better access to information through the use of standardized and
specialized computer searches; and (iii) electronic filing by
broker-dealers of uniform forms, including Forms BD, BDW, U-4,
and U-5.[6]
The Commission is also amending Exchange Act Rule 15b6-1[7]
to permit broker-dealers that are withdrawing from registration
to consent to a delay in the effectiveness of their notice of
withdrawal. The amendments will also permit the Commission to
extend the effective date for such period as the Commission by
order may determine is necessary or appropriate in the public
interest or for the protection of investors. The Commission is
similarly amending Rules 15Bc3-1[8] and 15Cc1-1[9] relating to
the withdrawal from registration of municipal securities dealers
and government securities brokers and government securities
dealers. These amendments are being adopted, in part, to provide
the broker-dealers, municipal securities dealers and government
securities brokers and government securities dealers adequate
flexibility to bring their business operations to an orderly
close in circumstances in which the 60-day period currently
provided under Rule 15b6-1, 15Bc3-1 or 15Cc1-1 would not be
sufficient. These amendments are also being adopted to provide
the Commission greater flexibility in concluding investigations
of broker-dealers, municipal securities dealers and government
securities brokers and government securities dealers before they
complete the withdrawal process.
The amendments to Rules 15b6-1, 15Bc3-1 and 15Cc1-1,
together with amendments to Form BDW, are discussed further
below.
II. FORM BDW
A. Items 4, 5, 6, and 8
The Commission is amending Items 4, 5, 6, and 8 of Form BDW.
Item 4 asks when the withdrawing broker-dealer stopped doing
business and, in the case of partial withdrawals from
registration,[10] when the broker-dealer stopped doing business
in the states designated in Item 3. As currently drafted, Item 4
presumes that broker-dealers filing Form BDW are registered
entities. Certain states, however, also require broker-dealers
with pending applications for registration on Form BD to file
Form BDW to withdraw their pending applications.[11] In order to
accommodate those states, Item 4 is being amended to require
disclosure of the date on which the broker-dealer withdrew its
request for registration.
The Commission is also amending Item 5, which requests
information concerning any funds and securities that withdrawing
broker-dealers may owe to their customers or to other broker-
dealers. Specifically, Item 5 requires disclosure of the number
of customers to which funds or securities are owed, the amount of
money and the market value of securities owed to customers or
other broker-dealers, and the arrangements that have been made
for payment. As amended, Item 5 will require a broker-dealer
that files a partial withdrawal (i.e., a withdrawal from
registration with a specific state or SRO) to provide the names
of the states from which it is requesting withdrawal and in which
it still owes customer funds or securities. This amendment will
assist state securities regulators in monitoring the amount of
funds or securities owed to customers in their states.
The proposed revisions to Item 5 will also change the
requirement that broker-dealers submit a FOCUS report or a
statement of financial condition when filing Form BDW.
Currently, a broker-dealer is required to file with Form BDW, a
FOCUS report or, if the broker-dealer is not subject to the FOCUS
filing requirement, a statement of financial condition,
regardless of whether the broker-dealer owes funds or securities
to customers or to other broker-dealers. The Commission is
reducing the filing burden on broker-dealers by requiring only
that a FOCUS report or a statement of financial condition be
filed with Form BDW when a broker-dealer is requesting full
withdrawal from registration (i.e., a withdrawal from
registration with the Commission, all SROs, and all states) and
the broker-dealer owes money or securities to any customer or to
any other broker-dealer.
In addition, the Commission is amending Item 6 of Form BDW,
which requires disclosure of certain regulatory and other
disciplinary matters that are also reportable on Form BD. Item 6
is being amended to delete the requirement that broker-dealers
reiterate information already required to be disclosed on Form BD
or elsewhere on Form BDW.[12] Instead, Item 6 will remind
broker-dealers that they must update any incomplete or inaccurate
disciplinary information on Form BD prior to filing Form BDW.[13]
Item 6 is also being amended to ask whether the broker-
dealer is the subject of, or is named in, any investment-related
investigation, consumer-initiated complaint, or private civil
litigation. Item 6 currently requires disclosure if the broker-
dealer is the subject of any "proceeding" not reported on Form
BD, or any complaint or investigation. The question, therefore,
is being revised to elicit more precise information by using
specific, rather than general, terms.
Finally, the Commission is expanding Item 8, the execution
paragraph, to require the registrant's agent to certify that the
information contained on Form BDW is complete and current, and to
certify further that all of the information on Form BD is
accurate and complete at the time Form BDW is filed.
B. Instructions
The Commission is also expanding the general filing
instructions to Form BDW to provide greater guidance to broker-
dealers filing Form BDW.[14] The revised instructions also
clarify attendant requirements that may arise out of filing Form
BDW, particularly those raised by filing the form electronically
with Web CRD. As amended, the instructions also include an
explanation of the terms 'jurisdiction,' 'investment-related,'
and 'investigation.'[15] These definitions are intended to
assist broker-dealers in responding to questions about their
disciplinary history and are consistent with the definitions
adopted in the Form BD Release.[16]
C. Clarifying Amendments
In addition to the substantive amendments to Form BDW
discussed above, the Commission is adopting several clarifying
amendments to Form BDW. Item 3, for example, is being revised to
inform broker-dealers that the 'SEC' box should be checked only
if a broker-dealer is intending to conduct an intrastate
brokerage business and is not a municipal securities dealer.[17]
III. RULE 15b6-1
The Commission is also amending Exchange Act Rule 15b6-
1,[18] which requires broker-dealers to file a notice of
withdrawal on Form BDW in accordance with that form’s
instructions. The rule provides generally that withdrawal from
broker-dealer registration automatically becomes effective 60
days after the filing date of the Form BDW, unless the Commission
institutes a proceeding to impose terms or conditions upon the
withdrawal.[19] As amended, the rule will also permit broker-
dealers to consent to a delay in the effectiveness of their
notice of withdrawal. In addition, the amendments will allow the
Commission to extend the effective date of withdrawal for the
period of time that the Commission determines is necessary or
appropriate in the public interest or for the protection of
investors. Under the rule, the Commission must make this
determination by order.
As explained in the Proposing Release, the Commission
determined that there may be circumstances in which it would be
advisable to provide broker-dealers seeking to withdraw from
registration greater flexibility in scheduling the termination of
their business operations. While a broker-dealer must cease all
securities activities when it files a request for withdrawal on
Form BDW, it may need additional time to unwind its non-
securities business operations before its Form BDW becomes
effective. The Commission, too, may determine that it would be
appropriate for a broker-dealer that is under investigation by
the Commission to maintain its registered status in order to
allow the Commission to conclude its pending investigation
without prematurely instituting a proceeding to impose conditions
on the broker-dealer's withdrawal. In such instances, the
interests of the Commission may be served by having the broker-
dealer consent to an extension of the effective date of the
broker-dealer's withdrawal from registration beyond the 60-day
period currently provided under Rule 15b6-1. The Commission's
interests also may be served by permitting the Commission to
extend the effective date for a period that it determines by
order is necessary or appropriate in the public interest or for
the protection of investors.
Withdrawal from broker-dealer registration will continue to
become effective automatically 60 days after the filing date in
all other cases -- that is, unless there has been express consent
by the broker-dealer, the issuance of a Commission order, or the
initiation of a proceeding by the Commission extending the
effective date of withdrawal.
. The Commission is similarly amending Rules 15Bc3-1[20]
and 15Cc1-1[21] relating to the withdrawal from registration of
municipal securities dealers and government securities brokers
and government securities dealers.
IV. CONFORMING AMENDMENTS
The Commission is amending Exchange Act Rule 15b1-1[22] to
clarify that an application for registration filed on Form BD
with the Central Registration Depository shall be considered a
"report" filed with the Commission for purposes of Section 15(b)
of the Exchange Act.[23] This amendment is intended to conform
the language in Rule 15b1-1 with language already contained in
corresponding rules governing the filing requirements for
municipal securities dealers, government securities brokers, and
government securities dealers. The Commission is also amending
Rules 15b1-1, 15b3-1, 15b6-1, 15Ba2-2, 15Bc3-1, and 15Cc1-1 under
the Exchange Act[24] to clarify that the filing of Form BD or
Form BDW by broker-dealers, municipal securities dealers, and
government securities brokers and government securities dealers
would, in each instance, constitute a "report" filed with the
Commission within the meaning of Sections 15(b),15B(c), 15C(c)
17(a), 18(a), and 32(a) of the Exchange Act.[25] The Commission
is also amending Rule 15Ca1-1 to clarify when notice of
government securities broker-dealer activities would be
considered filed with the Commission.
V. EFFECTIVE DATE
Use of the revised Form BDW adopted today is intended to
coincide with the implementation of Web CRD scheduled to begin on
August 1, 1999. As a result, the amendments to Form BDW become
effective on August 1, 1999. Thus, all Form BDW filings made on
or after August 1, 1999 must be made on the revised Form BDW
adopted today.
Amendments to Rules 15b1-1, 15b3-1, 15b6-1, 15Ba2-2, 15Bc3-
1, 15Ca1-1, and 15Cc1-1 become effective [insert date 30 days
after date of publication in the Federal Register]
VI. COST BENEFIT ANALYSIS
Form BDW is filed only one time by a registered broker-
dealer. The amendments to Form BDW adopted today do not
materially alter the disclosure required on Form BDW. As a
result, the costs to broker-dealers of gathering the information
necessary to complete a Form BDW will remain the same as those
currently applicable under the present Form BDW.
The actual filing of the Form on Web CRD will result in
savings of approximately 15 minutes per Form over the current
paper filing system according to staff estimates.
In addition, the implementation of the amendments to Form
BDW will facilitate the overall internet-based filing system of
Web CRD covering Forms BD and BDW as well as U-4 and U-5. This
internet-based filing system will provide ongoing efficiencies
for filers, regulators, and the public through reductions in the
time required for filing and accessing filed information.
VII. EFFECTS ON COMPETITION, EFFICENCY, AND CAPITAL FORMATION
Section 23(a)(2) of the Exchange Act[26] requires the
Commission, in adopting rules under the Exchange Act, to consider
the competitive effects of such rules, if any, and to refrain
from adopting a rule that would impose a burden on competition
not necessary or appropriate in furthering the purpose of the
Exchange Act. Moreover, Section 3 of the Exchange Act as amended
by the National Securities Markets Improvement Act of 1996
provides that whenever the Commission is engaged in a rulemaking
and is required to consider or determine whether an action is
necessary or appropriate in the public interest, the Commission
shall consider, in addition to the protection of investors,
whether the action will promote efficiency, competition and
capital formation.
The Commission is of the view that the amendments to Form
BDW, and the amendments to Rules 15b1-1, 15b3- 1, 15b6-1, 15Ba2-
2, 15Bc3-1, 15Ca1-1, and 15Cc1-1 under the Exchange Act[27] would
not result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Exchange Act.
As noted above, the form revisions and rule amendments adopted
today will reduce the regulatory burden on broker-dealers by
clarifying the information required to be filed on Form BDW and
by facilitating the filing of Form BDW electronically with the
CRD.
VIII. REGULATORY FLEXIBILITY ACT CERTIFICATION
Pursuant to Section 605(b) of the Regulatory Flexibility
Act, 5 U.S.C. § 605(b), the Chairman of the Commission has
certified that the adoption of the amendments would not have a
significant economic impact on a substantial number of small
entities.[28] This certification, including the reasons
therefor, is attached to this release as Appendix A.
XI. PAPERWORK REDUCTION ACT ANALYSIS
Certain of the amendments to Form BDW contain "collection of
information" requirements within the meaning of the Paperwork
Reduction Act of 1995 (44 U.S.C. Section 3501 et seq.) ('PRA').
The Commission submitted the proposal to the Office of Management
and Budget ("OMB") for review in accordance with PRA requirements
in effect at the time the amendments were proposed. The title
for this collection of information is: "Form BDW." OMB has
approved the amendments to Form BDW and has assigned Form BDW OMB
Number 3235-0018, with an expiration date of October 31, 1999.
The Commission solicited public comment on the collection of
information requirements contained in the Proposing Release. No
comments were received.
The amendments to Form BDW are designed to reduce the
regulatory burden on broker-dealers and to improve the usefulness
of the information to federal and state securities regulators by
simplifying the form and clarifying its requirements. The
amendments are also designed to implement changes to the CRD
system, including providing for electronic filing of Form
BDW.[29]
This collection of information will be used by the
Commission to determine whether it is in the public interest to
permit a broker-dealer to withdraw its registration. This
collection of information is also important to a withdrawing
broker-dealer's customers and to the general public because it
provides, among other things, the name and address of the broker-
dealer's agent to contact regarding the broker-dealer's
unfinished business.
The likely respondents to the proposed collection of
information will be the 900 or fewer broker-dealers that withdraw
from registration annually. They will be required to respond to
the proposed collection of information before being allowed to
withdraw their registration with the Commission. The Commission
expects that the proposed collection of information on revised
Form BDW will result in no additional burdens to broker-dealers
seeking to withdraw from registration on Form BDW. The
Commission estimates that the average burden to complete Form BDW
will be approximately 15 minutes, or 0.25 hours. (based on the
Commission staff's experience in administering the form).
Approximately 900 respondents file one response per year,
resulting in an estimated total annual reporting burden of 225
hours.
As adopted, respondents will be required to retain the
collection of information for a period of no less than six years
and to make it available for inspection upon a regulatory
request. Disclosure of data solicited in this collection of
information by the respondents is mandatory before a request for
withdrawal from registration may become effective. Disclosure of
social security numbers, however, is voluntary. The responses
provided by the respondents will be made a matter of public
record and will be available for inspection by any member of the
public.
An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it
displays a currently valid control number.
X. STATUTORY BASIS
The foregoing amendments are adopted pursuant to Sections
15(b), 15B, 15C and 23(a) of the Exchange Act.
LISTS OF SUBJECTS IN 17 CFR PARTS 240 AND 249
Reporting and recordkeeping requirements, Securities,
Broker-dealers.
TEXT OF AMENDMENTS
In accordance with the foregoing, Title 17, Chapter II of
the Code of Federal Regulations is amended as follows:
PART 240 -- GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE
ACT OF 1934
1. The authority citation for Part 240 continues to read in
part as follows:
Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77eee,
77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78f, 78i, 78j, 78j-1, 78k,
78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s,
78u-5, 78w, 78x, 78ll(d), 78mm, 79q, 79t, 80a-20, 80a-23, 80a-29,
80a-37, 80b-3, 80b-4 and 80b-11, unless otherwise noted.
* * * * *
2. By amending § 240.15b1-1 by revising paragraph (c) to
read as follows:
§ 240.15b1-1 Application for registration of brokers or dealers.
* * * * *
(c) An application for registration that is filed with the
Central Registration Depository pursuant to this section shall be
considered a "report" filed with the Commission for purposes of
Sections 15(b), 17(a), 18(a), 32(a) (15 U.S.C. 78o(b), 78q(a),
78r(a), 78ff(a)) and other applicable provisions of the Act.
3. By amending § 240.15b3-1 by revising paragraph (c) to
read as follows:
§ 240.15b3-1 Amendments to application.
* * * * *
(c) Every amendment filed with the Central Registration
Depository pursuant to this section shall constitute a "report"
filed with the Commission within the meaning of Sections 15(b),
17(a), 18(a), 32(a) (15 U.S.C. 78o(b), 78q(a), 78r(a), 78ff(a))
and other applicable provisions of the Act.
4. By revising § 240.15b6-1 to read as follows:
§ 240.15b6-1 Withdrawal from registration.
(a) Notice of withdrawal from registration as a broker or
dealer pursuant to Section 15(b) of the Act shall be filed on
Form BDW (17 CFR 249.501a) in accordance with the instructions
contained therein. Every notice of withdrawal from registration
as a broker or dealer shall be filed with the Central
Registration Depository (operated by the National Association of
Securities Dealers, Inc.) in accordance with applicable filing
requirements. Prior to filing a notice of withdrawal from
registration on Form BDW (17 CFR 249.501a), a broker or dealer
shall amend Form BD (17 CFR 249.501) in accordance with
§240.15b3-1(a) to update any inaccurate information.
(b) A notice of withdrawal from registration filed by a
broker or dealer pursuant to Section 15(b) of the Act (15 U.S.C.
78o(b)) shall become effective for all matters (except as
provided in this paragraph (b) and in paragraph (c) of this
section) on the 60th day after the filing thereof with the
Commission, within such longer period of time as to which such
broker or dealer consents or which the Commission by order may
determine as necessary or appropriate in the public interest or
for the protection of investors, or within such shorter period of
time as the Commission may determine. If a notice of withdrawal
from registration is filed with the Commission at any time
subsequent to the date of the issuance of a Commission order
instituting proceedings pursuant to Section 15(b) of the Act (15
U.S.C. 78o(b)) to censure, place limitations on the activities,
functions or operations of, or suspend or revoke the registration
of, such broker or dealer, or if prior to the effective date of
the notice of withdrawal pursuant to this paragraph (b), the
Commission institutes such a proceeding or a proceeding to impose
terms or conditions upon such withdrawal, the notice of
withdrawal shall not become effective pursuant to this paragraph
(b) except at such time and upon such terms and conditions as the
Commission deems necessary or appropriate in the public interest
or for the protection of investors.
(c) With respect to a broker's or dealer's registration
status as a member within the meaning of Section 3(a)(2) of the
Securities Investor Protection Act of 1970 (15 U.S.C.
78ccc(a)(2)) for purposes of the application of Sections 5, 6,
and 7 (15 U.S.C. 78eee, 78fff, and 78fff-1) thereof to customer
claims arising prior to the effective date of withdrawal pursuant
to paragraph (b) of this section, the effective date of a
broker's or dealer's withdrawal from registration pursuant to
this paragraph (c) shall be six months after the effective date
of withdrawal pursuant to paragraph (b) of this section or such
shorter period of time as the Commission may determine.
(d) Every notice of withdrawal filed with the Central
Registration Depository pursuant to this section shall constitute
a "report" filed with the Commission within the meaning of
Sections 15(b), 17(a), 18(a), 32(a) (15 U.S.C. 78o(b), 78q(a),
78r(a), 78ff(a)) and other applicable provisions of the Act.
5. By amending § 240.15Ba2-2 by revising paragraph (d) to
read as follows:
§ 240.15Ba2-2 Application for registration of non-bank
municipal securities dealers whose business is exclusively
intrastate.
* * * * *
(d) Every application or amendment filed with the Central
Registration Depository pursuant to this section shall constitute
a "report" filed with the Commission within the meaning of
Sections 15(b), 15B(c), 17(a), 18(a), 32(a) (15 U.S.C. 78o(b),
78o-4(c), 78q(a), 78r(a), 78ff(a)) and other applicable
provisions of the Act.
6. By revising § 240.15Bc3-1 to read as follows:
§ 240.15Bc3-1 Withdrawal from registration of municipal
securities dealers.
(a) Notice of withdrawal from registration as a municipal
securities dealer pursuant to Section 15B(c) (15 U.S.C. 78o-
4(c)) shall be filed on Form MSDW (17 CFR 249.1110), in the case
of a municipal securities dealer which is a bank or a separately
identifiable department or division of a bank, or Form BDW (17
CFR 249.501a), in the case of any other municipal securities
dealer, in accordance with the instructions contained therein.
Prior to filing a notice of withdrawal from registration on Form
MSDW (17 CFR 249.1110) or Form BDW (17 CFR 249.501a), a municipal
securities dealer shall amend Form MSD (17 CFR 249.1100) in
accordance with § 240.15Ba2-1(b) or amend Form BD (17 CFR
249.501) in accordance with § 240.15Ba2-2(c) to update any
inaccurate information.
(b) Every notice of withdrawal from registration as a
municipal securities dealer that is filed on Form BDW (17 CFR
249.501a) shall be filed with the Central Registration Depository
(operated by the National Association of Securities Dealers,
Inc.) in accordance with applicable filing requirements. Every
notice of withdrawal on Form MSDW (17 CFR 249.1110) shall be
filed with the Commission.
(c) A notice of withdrawal from registration filed by a
municipal securities dealer pursuant to Section 15B(c) (15 U.S.C.
78o-4(c)) shall become effective for all matters on the 60th day
after the filing thereof with the Commission, within such longer
period of time as to which such municipal securities dealer
consents or which the Commission by order may determine as
necessary or appropriate in the public interest or for the
protection of investors, or within such shorter period of time as
the Commission may determine. If a notice of withdrawal from
registration is filed with the Commission at any time subsequent
to the date of the issuance of a Commission order instituting
proceedings pursuant to Section 15B(c) (15 U.S.C. 78o-4(c)) to
censure, place limitations on the activities, functions or
operations of, or suspend or revoke the registration of, such
municipal securities dealer, or if prior to the effective date of
the notice of withdrawal pursuant to this paragraph (c), the
Commission institutes such a proceeding or a proceeding to impose
terms or conditions upon such withdrawal, the notice of
withdrawal shall not become effective pursuant to this paragraph
(c) except at such time and upon such terms and conditions as the
Commission deems necessary or appropriate in the public interest
or for the protection of investors.
(d) Every notice of withdrawal filed with the Central
Registration Depository pursuant to this section shall constitute
a "report" filed with the Commission within the meaning of
Sections 15B(c), 17(a), 18(a), 32(a) (15 U.S.C. 78o-4(c), 78q(a),
78r(a), 78ff(a)) and other applicable provisions of the Act.
7. By amending § 240.15Ca1-1 by revising paragraph (c) to
read as follows:
§ 240.15Ca1-1 Notice of government securities broker-
dealer activities.
* * * * *
(c) Any notice required pursuant to this section shall be
considered filed with the Commission if it is filed with the
Central Registration Depository (operated by the National
Association of Securities Dealers, Inc.) in accordance with
applicable filing requirements.
8. By revising § 240.15Cc1-1 to read as follows:
§ 240.15Cc1-1 Withdrawal from registration of government
securities brokers or government securities dealers.
(a) Notice of withdrawal from registration as a government
securities broker or government securities dealer pursuant to
Section 15C(a)(1)(A) of the Act (15 U.S.C. 78o-5(a)(1)(A)) shall
be filed on Form BDW (17 CFR 249.501a) in accordance with the
instructions contained therein. Every notice of withdrawal from
registration as a government securities broker or dealer shall be
filed with the Central Registration Depository (operated by the
National Association of Securities Dealers, Inc.) in accordance
with applicable filing requirements. Prior to filing a notice of
withdrawal from registration on Form BDW (17 CFR 249.501a), a
government securities broker or government securities dealer
shall amend Form BD (17 CFR 249.501) in accordance with 17 CFR
400.5(a) to update any inaccurate information.
(b) A notice of withdrawal from registration filed by a
government securities broker or government securities dealer
shall become effective for all matters on the 60th day after the
filing thereof with the Commission, within such longer period of
time as to which such government securities broker or government
securities dealer consents or the Commission by order may
determine as necessary or appropriate in the public interest or
for the protection of investors, or within such shorter period of
time as the Commission may determine. If a notice of withdrawal
from registration is filed with the Commission at any time
subsequent to the date of the issuance of a Commission order
instituting proceedings pursuant to Section 15C(c) (15 U.S.C.
78o-5(c)) to censure, place limitations on the activities,
functions or operations of, or suspend or revoke the registration
of such government securities broker or government securities
dealer, or if prior to the effective date of the notice of
withdrawal pursuant to this paragraph (b), the Commission
institutes such a proceeding or a proceeding to impose terms or
conditions upon such withdrawal, the notice of withdrawal shall
not become effective pursuant to this paragraph (b) except at
such time and upon such terms and conditions as the Commission
deems necessary or appropriate in the public interest or for the
protection of investors.
(c) Every notice of withdrawal filed with the Central
Registration Depository pursuant to this section shall constitute
a "report" filed with the Commission within the meaning of
Sections 15(b), 15C(c), 17(a), 18(a), 32(a) (15 U.S.C. 78o(b),
78o-5(c), 78q(a), 78r(a), 78ff(a)) and other applicable
provisions of the Act.
PART 249 - FORMS, SECURITIES EXCHANGE ACT OF 1934
9. The authority citation for Part 249 continues to read in
part as follows:
Authority: 15 U.S.C. 78a, et seq., unless otherwise noted;
* * * * *
10. By revising Form BDW (referenced in § 249.501a) to read
as follows:
Note: Form BDW does not and the amendments will not appear
in the Code of Federal Regulations. Revised Form BDW is attached
as an Appendix to this document.
By the Commission.
Jonathan G. Katz
Secretary
April 30, 1999
Note: The Form BDW is available in the Commission’s Public Reference
Room and will be available on the Commission’s Web site at "www.sec.gov".
**FOOTNOTES**
[1]: Form BDW is required to be used by all broker-dealers that
seek to withdraw from registration with the Commission. See 17
CFR 240.15b6-1; 17 CFR 249.501a.
[2]: 15 U.S.C. 78a et seq.
[3]: Securities Exchange Act Release No. 37432 (July 12, 1996),
61 FR 37701 (July 19, 1996)('Proposing Release'). The Proposing
Release also proposed amendments relating to filing procedures
for Forms BD and BDW that are not being adopted today because
changes to the design of the CRD system made since the Proposing
Release, have necessitated changes to those proposed filing
procedures. The Commission is today proposing in a separate
release revisions to Form BD, the rules and instructions relating
to Form BD, and the filing procedures relating to Forms BD. See
Securities Exchange Act Release No. 34-41351.
[4]: The revisions to Form BDW in certain respects conform it to
analogous amendments to Form BD that were adopted on July 12, 1996.
Although adopted, those amendments to Form BD have not yet been
implemented because Web CRD is not yet operational. See Securities
Exchange Act Release No. 37431 (July 12, 1996), 61 FR 37701 ("Form BD
Release"). The Commission is today proposing in a separate release
further revisions to the adopted but not implemented Form BD that will
facilitate its use on Web CRD scheduled to become operational on
August 16, 1999. See Securities Exchange Act Release No. 34-41351.
[5]: CRD/PD Bulletin, Volume 6, No. 5, March 1999 (available from
the www.nasdr.com website).
[6]: Forms BD and BDW are joint forms used by the Commission, certain
SROs, and all of the states to register, and terminate the registration
of, broker-dealers. Forms U-4 and U-5 are used by the SROs and states
to register, and terminate the employment of, broker-dealer personnel.
[7]: 17 CFR 240.15b6-1.
[8]: 17 CFR 240.15Bc3-1
[9]: 17 CFR 240.15Cc1-1
[10]: The instructions to the form have been revised to explain
that a partial withdrawal terminates registration only with
designated states and SROs, but does not terminate registration
with the Commission and at least one SRO and state.
[11]: The Commission does not require a broker-dealer that has an
application for registration pending to file Form BDW in order to
withdraw its pending application. Broker-dealers may withdraw a
pending application simply by providing notice in writing to the
Commission and the applicable SRO.
[12]: Specifically, the question "is broker-dealer now the
subject of any unsatisfied customer claims for funds or
securities not reported under Item 5" would be deleted. These
claims generally are already reportable under Item 5.
[13]: Exchange Act Rule 15b3-1 [17 CFR 240.15b3-1] requires
broker-dealers to amend any information on Form BD whenever it
becomes inaccurate.
[14]: The changes to Form BDW and its instructions are those
identified in the proposing release except that the words 'or
paper' are being deleted from the second sentence of section
'A.1.' of the Form BDW Instructions and the abbreviations 'ASE'
and 'PSE' in section 3 of Form BDW are being updated to 'AMEX'
and 'PCX'.
[15]: E.g., the definition of the term "investigation" includes
grand jury investigations, Commission investigations after the
"Wells" notice has been given, formal investigations by SROs, or
actions or procedures designated as investigations by states.
The definition does not include subpoenas, preliminary or routine
regulatory inquiries or requests for information, deficiency
letters, "blue sheet" requests or other trading questionnaires,
or examinations.
[16]: See supra notes 1 and 4 and accompanying text.
[17]: Exchange Act Rule 15Ba2-2 [17 CFR 240.15Ba2-2] requires a
non-bank municipal securities dealer whose business is
exclusively intrastate to file with its application on Form BD a
statement that it is filing for registration as an intrastate
dealer. Thus, a non-bank municipal securities dealer cannot
conduct an intrastate municipal securities business without being
registered with the Commission.
[18]: 17 CFR 240.15b6-1. See also supra notes 6, 7 and 8 and
accompanying text. The Commission is considering further
amendments to Rules 15b6-1, 15Bc3-1, and 15Cc1-1 [17 CFR
240.15b6-1, 17 CFR 15Bc3-1, and 17 CFR 15Cc1-1] to provide for
electronic filing of Form BDW with Web CRD.
[19]: The amendment to Rule 15b6-1 [17 CFR 240.15b6-1] is
consistent with a similar provision under Section 15(b)(1) of the
Exchange Act [15 U.S.C. § 78o(b)]. Section 15(b)(1) generally
requires broker-dealer registration to be granted within 45 days
after the filing of Form BD, unless the applicant consents to a
longer period of time.
[20]: 17 CFR 240.15Bc3-1
[21]: 17 CFR 240.15Cc1-1
[22]: 17 CFR 240.15b1-1.
[23]: 15 U.S.C. 78o(b).
[24]: 17 CFR 240.15b1-1, 17 CFR 240.15b3-1, 17 CFR 240.15b6-1, 17
CFR 240.15Ba2-2, 17 CFR 240.15Bc3-1, and 17 CFR 240.15Cc1-1.
[25]: 15 U.S.C. 78o(b), 78o-4(c), 78o-5(c), 78q(a), 78r(a), and
78ff(a).
[26]: 15 U.S.C. 78w(a)(2).
[27]: 17 CFR 240.15b1-1, 17 CFR 240.15b3-1, 17 CFR 240.15b6-1, 17
CFR 240.15Ba2-2, 17 CFR 240.15Bc3-1, 17 CFR 240.15Ca1-1, and 17
CFR 240.15Cc1-1.
[28]: Under the Exchange Act, a small broker or dealer entity
is defined as 'a broker or dealer that had total capital (net
worth plus subordinated liabilities) of less than $500,000 on the
last business day of the preceding fiscal year as of which its
audited statements were prepared pursuant to § 240.17a-5(d) or,
if not required to file such statements, a broker or dealer that
had total capital (net worth plus subordinated liabilities) of
less than $500,000 on the last business day of the preceding
fiscal year (or in the time that it has been in business, if
shorter) and is not affiliated with any person (other than a
natural person) that is not a small business or small
organization as defined in this section.' 17 CFR 240.010(c).
[29]: Rules 15b6-1, 15Bc3-1, and 15Cc1-1 under the Exchange Act
[17 CFR 240.15b6-1, 17 CFR 240.15B3-1, and 17 CFR 240.15Cc1-1]
require broker-dealers to file a notice of withdrawal on Form BDW
in accordance with the instructions contained therein.
Appendix A:
SECURITIES AND EXCHANGE COMMISSION
REGULATORY FLEXIBILITY ACT CERTIFICATION
I, Arthur Levitt, Jr., Chairman of the U.S. Securities and
Exchange Commission ("Commission"), hereby certify, pursuant to 5
U.S.C. § 605(b), that the proposed amendments to Form BDW and
Rules 15b1-1, 15b3-1, 15b6-1, 15Ba2-2, 15Bc3-1, 15Ca1-1, and
15Cc1-1 ("Rules") under the Securities Exchange Act of 1934
("Exchange Act') would not, if adopted, have a significant
economic impact on a substantial number of small entities. The
proposed amendments would facilitate implementation of filing of
Form BDW (the form on which broker-dealers request withdrawal
from registration) via the internet as part of Web CRD. The
Commission receives roughly 900 Forms BDW a year. The proposed
amendments would also clarify certain provisions of Form BDW and
its status as a report under the Exchange Act, as well as permit
the Commission to delay, or broker-dealers to consent to delay,
the effectiveness of a filed Form BDW. The proposed amendments
should not materially affect the substance of the required
disclosures or the filing and delivery obligations under Form BDW
or the Rules. Consequently, no new preparation, printing, or
distribution costs would be incurred. Finally, the proposed
amendments would impose no new recordkeeping requirements or
compliance burdens on small entities. Accordingly, the proposed
amendments would not have a significant economic impact on a
substantial number of small entities.
Dated: ________
______________
Arthur Levitt, Jr.
Chairman