SEC Rule 8c-1 Information Collection Extension: Broker-Dealer Customer Securities Hypothecation Restrictions

The Securities and Exchange Commission (SEC) is soliciting public comments for a 60-day period on the proposed extension of the information collection requirements under Rule 8c-1 (17 CFR 240.8c-1) of the Securities Exchange Act of 1934. This is a routine Paperwork Reduction Act renewal, not a new rule. The comment deadline is June 1, 2026, with a second comment opportunity to follow via a 30-Day Submission Notice in the Federal Register. Rule 8c-1 prohibits broker-dealers from using customer securities as collateral to finance their own trading, speculation, or underwriting activities. The rule establishes three core prohibitions: commingling different customers' securities as collateral without each customer's consent; commingling customer securities with the broker-dealer's own securities under the same pledge; and pledging customer securities beyond the amount customers owe to the broker-dealer. The rule also requires broker-dealers to deliver written notifications to pledgees when customer securities are used as collateral. These requirements are designed to protect investors and support the SEC's mandate to prevent improper hypothecation of customer assets. As of end of 2025, approximately 54 broker-dealers are subject to this rule. Each respondent submits an estimated 45 annual responses, totaling 2,430 responses per year. At 0.5 hours per response, the aggregate annual compliance burden is estimated at 1,215 hours. The SEC is seeking OMB approval to continue this collection under Control No. 3235-0514.

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