The proposed changes to the rules are a part of the SEC’s continuing efforts to modernize and streamline its information collection and enable a more efficient analysis of that information.
The move covers forms submitted by SROs with electronic filing of the following forms required on EDGAR:
- Form 1 (Exchange);
- Form 1-N (Exchange);
- Form 15-A (Securities Association);
- This is a re-numbered Form X-15A A-1, incorporating also repealed Forms X-15 AJ-1 and X-15 AJ-2;
- Form CA-1 (Clearing Agency).
The changes also involve the introduction of structured data requirements for the forms, including XBRL, XML and unstructured PDF requirements for specific form components. Information on these requirements will be included in the general instructions accompanying each of the forms. Technical requirements that specify what would be considered an incomplete or deficient form will also be added to the instructions.
The amendments would also see the elimination of form 19b-4(e), which reports the listing and trading of new derivatives. Instead, the relevant SROs will be required to publicly post this information using custom XML that the SEC intends to create and publish, as well as a PDF renderer that would enable the consumption of this information by the wider public.
Structured data submission
The proposals do not extend the requirements for structured data submission to existing supporting documents, such as “copies of by-laws, written agreements, user manuals, and listing applications”, which are required to be submitted with some of the forms. According to the SEC a requirement to retroactively structure such documents would impose a burden on entities that would not be justified given the potential benefits.
The manual signature for form 19b-4 which is used to report an SRO rule change to the SEC would also be removed under the proposals, making this form entirely electronic.
Broker-Dealers, SBSDs and MSBSPs would be required to file Form 17-H and Form X-17A-5 Part III electronically.
Notices and reports under the following rules would also need to be submitted electronically using EDGAR:
- Rule 17a-19;
- Form X-17A-19;
- Rule 3a71-3(d)(1)(vi);
- Rule 15fi3(c);
- Rule 15fk1(c)(2)(ii)(A).
Finally, electronic signatures would be permitted in the FOCUS report as well as filings under:
- Rule 17a-5;
- Rule 17a-12;
- Rule 18a-7.
The SRO forms as well as the information required under Rule 19b-4(e) would be subject to recordkeeping requirements under Rule 17a-1. These would stipulate the retention of the information for at least five years, with the first two years in an easily accessible place.
Despite the fact that some work may be needed to facilitate the submission of the forms given the new structured data requirements, there is nothing but good news here for organisations given how work intensive the completion and production of paper forms generally tends to be.
