Broker-Dealer Reports

The Securities and Exchange Commission (the "Commission') is proposing amendments to the broker-dealer financial reporting rule under the Securities Exchange Act of 1934 (the "Exchange Act'). The first set of amendments would, among other things, update the existing requirements of Exchange Act Rule 17a-5, facilitate the ability of the Public Company Accounting Oversight Board (the "PCAOB') to implement oversight of independent public accountants of broker-dealers as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act'), and eliminate potentially redundant requirements for certain broker-dealers affiliated with, or dually- registered as, investment advisers. The second set of amendments would require broker-dealers that either clear transactions or carry customer accounts to consent to allowing the Commission and designated examining authorities ("DEAs') to have access to independent public accountants to discuss their findings with respect to annual audits of the broker- dealers and to review related audit documentation. The third set of amendments would enhance the ability of the Commission and examiners of a DEA to oversee broker-dealers' custody practices by requiring broker- dealers to file a new Form Custody.