Recordkeeping and Reporting Requirements for Trading Systems Operated by Brokers and Dealers

SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 240

[Release No. 34-33965; File No. S7-3-94]

RIN 3235-AG03

Recordkeeping and Reporting Requirements for Trading Systems

Operated by Brokers and Dealers

AGENCY: Securities and Exchange Commission.

ACTION: Extension of comment period.

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SUMMARY: The Securities and Exchange Commission is extending the date

by which comments must be received on proposed rule 17a-23 under the

Securities Exchange Act of 1934 (``Act'') from April 19, 1994 to May

19, 1994. The proposed rule would establish recordkeeping and reporting

requirements for broker-dealer sponsors of certain automated securities

trading systems (``broker-dealer trading systems'' or ``BDTSs'').

DATES: Comments should be received on or before May 19, 1994.

ADDRESSES: Comments should be submitted in triplicate and addressed to

Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450

Fifth Street NW., Mail Stop 6-9, Washington D.C. 20549. Comment letters

should refer to File No. S7-3-94. All comment letters received will be

made available for public inspection and copying in the Commission's

Public Reference Room, 450 Fifth Street NW., Washington, DC 20549.

FOR FURTHER INFORMATION CONTACT:

Gordon K. Fuller, Special Counsel, Sheila C. Slevin, Branch Chief, or

Kristen N. Geyer, Attorney Advisor, 202/942-0794 or 202/942-0792.

SUPPLEMENTARY INFORMATION: On February 9, 1994, the Commission

published proposed rule 17a-23 under the Act.\1\ The proposal would

establish a uniform recordkeeping and reporting structure for broker-

dealer sponsors of broker-dealer trading systems, requiring those

broker-dealer sponsors to make available to the Commission and the

appropriate self-regulatory organization (``SRO''), system-specific

information about activity occurring in those systems. The Commission

is extending the comment period on the proposal from April 19, 1994 to

May 19, 1994 in order to receive the benefit of comments from the

greatest possible number of interested persons.

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\1\Securities Exchange Act Release No. 33605 (February 9, 1994),

59 FR 8368 (February 18, 1994).

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The proposal raises a number of complex issues with respect to the

regulation of broker-dealer trading systems, including the consistency

of the proposal with the policies underlying the Act and the

appropriate scope of the requirements imposed under the proposal. The

Commission has received only two comments on the proposal to date.

Accordingly, the Commission is concerned that the current comment

period may not permit interested persons sufficient time to address

these issues in a thorough manner.\2\ Moreover, the lack of a

sufficient volume of comments to comprise an adequate record

potentially undermines the quality of any determination the Commission

ultimately may make with respect to the proposal.\3\ Accordingly, in

order to receive the benefit of comments from the greatest possible

number of interested persons, the Commission is extending the comment

period on the proposal from April 19, 1994 to May 19, 1994.

\2\A number of potential commenters have called the staff to

inquire whether the Commission will extend the comment period.

\3\The Commission's experience with proposed rule 15c2-10 under

the Act, which the Commission recently withdrew (Securities Exchange

Act Release No. 33621 [February 14, 1994], 59 FR 8379), indicates

that an extension of time may assist interested persons in

formulating their views and help ensure that the Commission is

provided with an adequate record. Proposed rule 15c2-10 would have

established a comprehensive regulatory framework for certain

automated securities trading systems that are not operated as

facilities of national securities exchanges or associations. The

Commission twice extended the comment period on proposed rule 15c2-

10, for a total of 45 days (from June 19 to August 2, 1989). The

Commission received 17 comments on its proposal. However, only five

of those 17 comments were received during the initial comment

period; the remaining 12 comments were submitted during the

subsequent 45-day extended period. If the same pattern holds with

respect to the current proposal, extension of the comment period

could provide the Commission with a substantial number of additional

comments upon which to base its determination.

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Dated: April 26, 1994.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-10540 Filed 5-2-94; 8:45 am]

BILLING CODE 8010-01-M