Wednesday, July 01. 2020
The SEC’s Office of Inspector General published an order this year which stated that raising the reporting threshold for Form 17-H would, among other things, increase the overall efficiency of the Form 17-H filing intake along with its review processes. This change would also reduce the reporting burden on smaller broker-dealer firms. The new changes are in line with these recommendations by altering the filing threshold for the first time and providing an exemption from the 17h Rules for broker-dealers with capital between $20 million to $50 million so long as the broker-dealer maintains less than $1 billion in total assets. While continuing to provide important information to the SEC on the financial condition of covered broker-dealers and their affiliates, the changes now exempt certain smaller broker-dealers from the reporting requirements of the rules. Firms maintaining $50 million or more in capital, including subordinated debt, currently account for approximately 98 percent of the total capital of the broker-dealers subject to the 17h Rules; these firms will continue to remain subject to the rules.
The exemptive order is effective immediately.
Order Under Section 17(h)(4) of the Securities Exchange Act of 1934 Granting Exemption from Rule 17h-1T and Rule 17h-2T for Certain Broker-Dealers Maintaining Capital, Including Subordinated Debt of Greater than $20 Million but Less than $50 Million (www.sec.gov)