[Federal Register Volume 60, Number 53 (Monday, March 20, 1995)]
[Rules and Regulations]
[Pages 14621-14630]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-6696]
=======================================================================
-----------------------------------------------------------------------
[[Page 14622]]
SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 200 and 270
[Release No. 34-35483]
Organization and Program Management
AGENCY: Securities and Exchange Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Securities and Exchange Commission is amending its rules
on organization and program management. This action is necessary to
reflect changes that have occurred over the years. It is intended to
update the rules.
EFFECTIVE DATE: March 20, 1995.
FOR FURTHER INFORMATION CONTACT: Diane A. Campbell, Office of the
Executive Director, (202) 942-4300; Elizabeth T. Tsai, Office of
Freedom of Information and Privacy Act Operations, (202) 942-4326.
SUPPLEMENTARY INFORMATION: The Commission has undertaken a
comprehensive review of the rules governing its organization and
program management. The present amendments and additions to its rules
result from that review.
Specifically, the Commission is amending Sec. 200.2 (b) and (d) to
clarify the description of the Securities Exchange Act of 19341
and the Trust Indenture Act of 1939.2 It is amending paragraphs
(c) and (e) of Sec. 200.2 to describe adequately the Commission's
current functions under the Public Utility Holding Company Act of
19353 and the Investment Company Act of 1940.4 The Commission
is revising Sec. 200.13 to designate the Executive Director as the
Chief Operating Officer of the Commission, to clarify the description
of the responsibilities of the Executive Director, and to update the
list of statutes, regulations, and Executive Orders to be implemented
by the Executive Director. It is revising Sec. 200.14(a) to describe
the work of the Office of Administrative Law Judges specifically and
accurately. The revised section refers to the Administrative Procedure
Act,5 under which hearings are conducted, and lists the tasks of
administrative law judges in administrative proceedings. The Commission
makes only minor editorial changes in Secs. 200.14(b) and 200.30-9.
\1\15 U.S.C. 78a et seq.
\2\15 U.S.C. 77aaa et seq.
\3\15 U.S.C. 79a et seq.
\4\15 U.S.C. 80a-1 et seq.
\5\5 U.S.C. 551-559.
---------------------------------------------------------------------------
The Commission is revising Sec. 200.16a to reflect the
establishment of the Office of the Inspector General (OIG) in March
1989 and the transfer of the Office of Internal Audit to it in
accordance with the 1988 amendments to the Inspector General Act of
1978.6 The Commission established the OIG as an independent and
objective unit to conduct audits and investigations, to keep Congress
and the Chairman informed about problems and deficiencies in the
Commission's programs and operations, and to further the other purposes
of the Inspector General Act. Under this Act, the Inspector General
shall report to the Commission Chairman, who ``shall not prevent or
prohibit the Inspector General from initiating, carrying out, or
completing any audit or investigation, or from issuing any subpoena
during the course of any audit or investigation.'' Under
Sec. 200.16a(e), any such subpoena shall be served by any method
prescribed for service of subpoenas under Sec. 201.232 of this chapter.
\6\5 U.S.C. app.
---------------------------------------------------------------------------
The Commission is revising Sec. 200.17 to describe clearly the
duties of the Chief Management Analyst. It is amending Sec. 200.18(b)
(3) and (5) to make technical clarifications.
The Commission is amending Sec. 200.19a to reflect the current
responsibilities of the Director of the Division of Market Regulation.
As amended, the Director would have oversight of the entities and
activities enumerated in the section, such as the national market
system, government securities dealers, and the Securities Investor
Protection Corporation. The Commission is also amending Sec. 200.30-3,
which delegates authority to the Director, to update citations to
certain rules mentioned there.
The Commission is amending Secs. 200.19b and 200.27 to reflect the
reorganization of the Regional Offices under the general supervision of
the Director of the Division of Enforcement. A further amendment to
Sec. 200.19b reflects the adoption of procedures for handling requests
from regulatory and law enforcement agencies for access to nonpublic
information in enforcement files.
The Commission is amending Sec. 200.20b to clarify that the duties
of the Director of the Division of Investment Management do not include
enforcement activities under the jurisdiction of the Division of
Enforcement and that the functions of the Director described in
paragraphs (f) and (g) of the section relate to the Public Utility
Holding Company Act. The Commission added paragraphs (f) and (g) in
1985 when it transferred the duties under this Act to the Division of
Investment Management7 from the Office of Public Utility
Regulation, which then ceased to exist. At that time, however,
introductory language to paragraphs (f) and (g) was inadvertently
omitted.
\7\Investment Company Act Release No. 14341 (Jan. 30, 1985) [50
FR 5064] (Feb. 6, 1985)].
---------------------------------------------------------------------------
The Commission is amending Sec. 200.21a to clarify the
responsibilities of the Ethics Counsel vis-a-vis those of the Inspector
General. Specifically, the amendments reflect (1) Referral by the
Ethics Counsel to the Inspector General of matters of alleged staff
misconduct, and complaints appearing to involve violations of Federal
criminal statutes, (2) the transfer of the Ethics Counsel's
investigative responsibilities in those matters to the Inspector
General, and (3) the transfer from the Ethics Counsel to the Inspector
General of the responsibility to act as liaison with the Department of
Justice with respect to such referred matters.
The Commission is revising Sec. 200.24a to reflect reorganizations,
which moved the management of the public reference facilities to the
Office of Filings and Information Services and the administration of
the Freedom of Information Act8 and the Privacy Act of 19749
to the Office of Freedom of Information and Privacy Act Operations.
Both of these offices are now under the executive direction and
administrative control of the Executive Director. The former Office of
Consumer Affairs and Information Services has been renamed as the
Office of Consumer Affairs and the Director of this office reports
directly to the Chairman of the Commission.
\8\5 U.S.C. 552.
\9\5 U.S.C. 552a.
---------------------------------------------------------------------------
The Commission is amending Sec. 200.30-1 to reflect previous
amendments and revisions in regulations overseen by the Division of
Corporation Finance. These amendments are technical in nature, as the
amendments primarily update and revise regulatory citations.
The Commission is amending paragraphs (a)(1), (a)(2), (e)(3), and
(e)(4) of Sec. 200.30-5 to simplify the review of applications in the
Division of Investment Management. These provisions authorize the
Director of the Division of Investment Management to approve
applications under all sections of the Investment Company Act and the
Investment Advisers Act of 1940,10 except as specifically limited.
The amendments give some discretion to the [[Page 14623]] Director to
present applications to the Commission. The Director generally may
issue notices and orders if the matter does not appear to the Director
to present significant issues that have not been previously settled by
the Commission or to raise questions of fact or policy warranting
consideration by the Commission. The Commission proposed these
Sec. 200.30-5 amendments in March 1993, along with amendments to Rule
0-5 under the Investment Company Act,11 but has not received any
public comments on the former. These Sec. 200.30-5 amendments do not
authorize the Director to deny exemptive relief or to order a hearing
under the Investment Company Act or the Investment Advisers Act.12
\10\15 U.S.C. 80b-1 et seq.
\11\Investment Company Act Release No. 19362 (Mar. 26, 1993) (58
FR 16799 (Mar. 31, 1993)).
\12\In reviewing applications, the Division occasionally
determines that it will not recommend that the Commission order the
relief requested by an applicant, and notifies the applicant
accordingly. The applicant then may request that the Division submit
the application to the Commission with the Division's recommendation
that the application be set down for a hearing.
---------------------------------------------------------------------------
The Commission is revising paragraph (b) of Sec. 200.30-5 to
clarify that the Director of the Division of Investment Management has
the authority referred to in that paragraph with respect to all of the
types of entities listed. This amendment does not change the Director's
authority, but is intended to clarify that the Director of the Division
of Investment Management, rather than the Director of the Division of
Corporation Finance, has the authority listed with respect to certain
entities, such as business development companies, that are not
registered investment companies.
The Commission is changing the cross-reference to the Internal
Revenue Code in Sec. 200.30-5(d) to the Internal Revenue Code of
1986.13 It also is deleting paragraphs (g) and (h) of Sec. 200.30-
5 because the duties specified in those paragraphs fall within the
jurisdiction of the Division of Enforcement. In new Sec. 200.30-
5(g)(1), it updates the cross-reference to Sec. 200.30-6, which it
amended in 1992.14
\13\26 U.S.C. 1 et seq.
\14\Securities Act Release No. 6949 (July 30, 1992) (57 FR 36442
(Aug. 13, 1992)).
---------------------------------------------------------------------------
The Commission is also amending Sec. 200.30-5(f)(1) to authorize
the Director of the Division of Investment Management to issue notices
of applications and declarations under Sections 32 and 33 of the Public
Utility Holding Company Act. The Energy Policy Act of 199215 has
added these two sections. Also, the Commission is removing paragraph
(f)(5) of Sec. 200.30-5 because holding companies and their
subsidiaries no longer submit the type of applications it describes and
are not likely to submit any such applications in the future.
\15\Pub. L. No. 102-486, 106 Stat. 2776.
---------------------------------------------------------------------------
The Commission is amending Sec. 200.30-6(a) to clarify that the
delegated authority for the Regional Directors concerning Forms SB-1
and SB-2 is limited to filings made in their region. The Commission is
amending Sec. 200.20c and revising Sec. 200.30-11 to reflect recent
reorganizations and to clarify certain delegated authority to the
Associate Executive Director of the Office of Filings and Information
Services. The Commission is adopting new Sec. 200.23, which describes
the functions of the Office of Economic Analysis. It created this
Office in 1988 when it merged the Office of the Chief Economist and the
Directorate of Economic and Policy Analysis.
The Commission is removing Sec. 200.30-12, which delegated
authority to waive or reduce fees under the Freedom of Information Act
and the Privacy Act of 1974 to the director of an office that no longer
exists. The initial authority to waive or reduce such fees now lies
with the Freedom of Information Act/Privacy Act Officer, whose decision
is appealable to the General Counsel under Sec. 200.30-14(c) and (d).
The Commission is revising Sec. 200.30-15 to update the delegation
of authority to the Executive Director in two ways. First, it removes
the delegation of authority to publish quarterly compilations of
reimbursements for Commission attendees of non-Federal conferences
relating to the work of the Commission, since these reimbursements are
now required to be reported semi-annually to the Office of Government
Ethics. Second, it delegates the authority to the Executive Director,
as the Chief Operating Officer of the Commission, to perform certain
functions described in President Clinton's memorandum, dated October 1,
1993, on ``Implementing Management Reform in the Executive Branch.''
Other changes reflect the current titles of certain offices and
office heads.
The Commission finds, in accordance with the Administrative
Procedure Act (``APA''),16 that these rule amendments relate
solely to agency organization, procedures, or practice. Hence, the
public notice and comment requirements of that Act are inapplicable.
Similarly, the provisions of the Regulatory Flexibility Act,17
which apply only when notice and comment are required by the APA or
other law, are not applicable. The Commission further finds that, since
these rule amendments relate solely to agency organization, procedures,
or practice, the provisions of the APA, which require publication for
not less than 30 days before the effective date of a substantive rule,
are inapplicable. Accordingly, the amendments adopted today are
effective March 20, 1995. -
\16\5 U.S.C. 553(b)(3)(A).
\17\5 U.S.C. 601 et seq.
Effects on Competition
Section 23(a)(2) of the Securities Exchange Act\18\ requires the
Commission, in adopting rules under the Act, to consider their anti-
competitive effects, if any. It also requires the Commission to balance
any adverse impact against the regulatory benefits that will flow by
advancing the purposes of the Act. The Commission has considered the
amendments and additions to its rules announced in this release in
light of the standards set forth in section 23(a)(2). It believes that
their adoption would not impose any burden on competition unnecessary
or inappropriate in furtherance of the Act.
\18\15 U.S.C. 78w(a)(2).
---------------------------------------------------------------------------
List of Subjects
17 CFR Part 200
Administrative practice and procedure, Authority delegations
(Government agencies), Freedom of information, Government employees,
Organization and functions (Government agencies), Reporting and
recordkeeping requirements.
17 CFR Part 270
Investment companies.
Text of Amendments
For the reasons set out in the preamble, Title 17, Chapter II of
the Code of Federal Regulations is amended to read as follows:
PART 200--ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND
REQUESTS
1. The authority citation for Part 200, Subpart A, continues to
read, in part, as follows:
Authority: 15 U.S.C. 77s, 78d-1, 78d-2, 78w, 78ll(d), 79t,
77sss, 80a-37, 80b-11, unless otherwise noted.
* * * * *
2. In Sec. 200.1(a), the word ``trade'' is revised to read
``traded''.
3. Section 200.2 is amended by revising paragraphs (b), (c), (d),
(e), and (g) to read as follows: [[Page 14624]]
Sec. 200.2 Statutory functions.
* * * * *
(b) Securities Exchange Act of 1934. This Act requires the filing
of registration applications and annual and other reports with national
securities exchanges and the Commission, by companies whose securities
are listed on the exchanges. Annual and other reports must be filed
also by certain companies whose securities are traded on the over-the-
counter markets. These must contain financial and other data prescribed
by the Commission for the information of investors. Material
misstatements or omissions are grounds for suspension or withdrawal of
the security from exchange trading. This Act makes unlawful any
solicitation of proxies, authorizations, or consents in contravention
of Commission rules. These rules require disclosure of information
about the subject of the solicitation to security holders. The Act
requires disclosure of the holdings and the transactions by an officer,
director, or beneficial owner of over 10 percent of any class of equity
security of certain companies. It also requires disclosure of the
beneficial owners of more than five percent of any class of equity
securities of a registered company. It provides substantive and
procedural protection to security holders in third-party and issuer
tender offers. The Act also provides for the registration with, and
regulation by, the Commission of national securities exchanges, brokers
or dealers engaged in an over-the-counter securities business, and
national associations of such brokers or dealers. It gives the
Commission rulemaking power with respect to short sales, stabilizing,
floor trading activities of specialists and odd-lot dealers, and such
matters as excessive trading by exchange members. The Act authorizes
the Board of Governors of the Federal Reserve System to prescribe
minimum margin requirements for listed securities.
(c) Public Utility Holding Company Act of 1935. This Act authorizes
the Commission to regulate gas and electric public-utility holding
companies under standards prescribed for the protection of the public
interest and the interest of investors and consumers. The Act generally
limits a public-utility holding company to a single integrated public-
utility system, and requires simple corporate and capital structures.
If not exempt, a public-utility holding company must register with the
Commission. Generally, a registered holding company must obtain
Commission approval before it can issue and sell securities, acquire
utility securities or assets or any other interest in any business, or
enter into transactions with its affiliates. It must also comply with
extensive reporting and record-keeping requirements. Although largely
free of these requirements, an exempt holding company remains subject
to the geographic limitations of the Act. The Act permits the
acquisition of interests in ``exempt wholesale generators'' and
``foreign utility companies'' unrelated to a system's utility
operations.
(d) Trust Indenture Act of 1939. This Act safeguards the interests
of purchasers of publicly-offered debt securities issued under trust
indentures by requiring the inclusion of certain protective provisions
in, and the exclusion of certain types of exculpatory clauses from,
trust indentures. The Act also requires that an independent indenture
trustee represent the debtors by proscribing certain relationships that
could conflict with proper exercise of duties.
(e) Investment Company Act of 1940. This Act establishes a
comprehensive regulatory framework for investment companies and
subjects their activities to regulation under standards prescribed for
the protection of investors. Among other things, the Act provides for
the registration of investment companies with the Commission; requires
them to disclose their financial condition and investment policies to
their shareholders; prohibits them from substantially changing
investment policies without shareholder approval; bars persons guilty
of securities fraud from serving as officers or directors; prevents
underwriters, investment bankers, or brokers from constituting more
than a minority of the directors of an investment company; requires
that management contracts be submitted to shareholders for their
approval; prohibits transactions between investment companies and their
directors, officers, or affiliated companies or persons, except when
approved by the Commission; and prohibits investment companies from
issuing senior securities except under specified terms and conditions.
The Act also regulates advisory fees, sales and repurchases of
securities, exchange offers, and other activities of investment
companies. The Act authorizes the Commission to exempt any person or
class of persons or securities from any provisions of, or rules under,
the Act and to conduct any investigation it deems necessary to
determine existing or potential violations of the Act. It also
authorizes the Commission to prepare reports to security holders on the
fairness of plans of reorganization, merger, or consolidation. The
Commission may institute a court action to enjoin acts or practices of
management involving, among other things, a breach of fiduciary duty
and the consummation of plans of reorganization, merger, or
consolidation that are grossly unfair to security holders.
(f) * * *
(g) Chapter 11 of the Bankruptcy Code. Chapter 11 of the Bankruptcy
Code (11 U.S.C. 1101 et seq.) provides for Commission participation as
a statutory party in reorganization cases. Under section 1109(a) of the
Bankruptcy Code (11 U.S.C. 1109(a)), which also applies to Chapter 9
cases regarding municipalities, the Commission ``may raise and may
appear and be heard on any issue in the case.''
4. In Sec. 200.12, the word ``judges'' is revised to read ``judges
and the Inspector General''.
5. Section 200.13 is revised to read as follows:
Sec. 200.13 Executive Director.
(a) The Executive Director is responsible for developing and
executing the overall management policies of the Commission for all its
operating divisions and staff offices. The Executive Director also
provides executive direction to, and exercises administrative control
over, the Office of Administrative and Personnel Management, the Office
of the Comptroller, the Office of Filings and Information Services, the
Office of Freedom of Information and Privacy Act Operations, and the
Office of Information Technology. In addition, the Executive Director
implements the following statutes, regulations, and Executive orders,
as well as those that the Chairman may designate:
(1) Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.).
(2) Small and Disadvantaged Business Utilization Program (15 U.S.C.
631 et seq.).
(3) Government Printing and Binding Regulations, U.S. Congress
Joint Committee on Printing (1977).
(4) Occupational Safety and Health Programs for Federal Employees
under Executive Order 12196 of February 26, 1980 (29 CFR 1960.1-
1960.90).
(5) Federal Managers' Financial Integrity Act of 1982 (31 U.S.C.
3512).
(6) National Security Information under Executive Order 12356 of
April 6, 1982.
(7) Government Performance and Results Act of 1993 (31 U.S.C. 1101
et seq.).
(8) Recommendations of the Report of the National Performance
Review (September 1993). [[Page 14625]]
(b) The Executive Director appoints personnel, reviews and approves
policies and procedures, and assures appropriate resources to implement
the programs set forth in paragraph (a) of this section, and authorizes
and transmits reports required by them.
(c) The Executive Director also designates certifying officers for
agency payments, prescribes procurement regulations, enters into
contracts, designates contracting officers, and makes procurement
determinations.
(d) As the Chief Operating Officer of the Commission, the Executive
Director shall be responsible for:
(1) Implementing the goals of the President and the Chairman and
the mission of the Commission;
(2) Providing overall organizational management to improve agency
performance;
(3) Assisting the Chairman in promoting ongoing quality
improvement, developing strategic plans, and measuring results;
(4) Directing ongoing reengineering of the Commission's
administrative processes;
(e) Overseeing Commission-specific application of performance
measures, procurement reforms, personnel reductions, financial
management improvements, telecommunications and information technology
policies, and other government-wide systems reforms adopted as a result
of the recommendations of the National Performance Review; and
(f) Reforming the Commission's management practices by
incorporating the principles of the National Performance Review into
day-to-day management.
6. In Sec. 200.13b, the words ``Public Affairs'' are revised to
read ``Public Affairs, Policy Evaluation, and Research'' in the section
heading and in the text, and the words ``coordination and production of
the Annual Report to Congress,'' are removed.
7. Section 200.14 is revised to read as follows:
Sec. 200.14 Office of Administrative Law Judges.
(a) Under the Administrative Procedure Act (5 U.S.C. 551-559) and
the federal securities laws, the Office of Administrative Law Judges
conducts hearings in proceedings instituted by the Commission. The
Administrative Law Judges are responsible for the fair and orderly
conduct of the proceedings and have the authority to:
(1) Administer oaths and affirmations;
(2) Issue subpoenas;
(3) Rule on offers of proof;
(4) Examine witnesses;
(5) Regulate the course of a hearing;
(6) Hold pre-hearing conferences;
(7) Rule upon motions; and
(8) Unless waived by the parties, prepare an initial decision
containing the conclusions as to the factual and legal issues
presented, and issue an appropriate order.
(b) The Chief Administrative Law Judge performs the duties of an
Administrative Law Judge under the Administrative Procedure Act and the
duties delegated to him or her by the Commission that are compatible
with those duties. The Chief Administrative Law Judge is responsible
for the orderly functioning of the Office of Administrative Law Judges
apart from the conduct of administrative proceedings and acts as
liaison between that Office and the Commission.
8. Section 200.16a is revised to read as follows:
Sec. 200.16a Inspector General.
(a) Under the Inspector General Act of 1978, as amended, (5 U.S.C.
app.) the Inspector General performs independent and objective
investigations and audits relating to the Commission's programs and
operations. An investigation seeks to detect and prevent waste, fraud,
and abuse in the Commission's programs and operations, such as
violations of federal statutes or regulations by contractors and
Commission employees or the Standards Of Ethical Conduct For Employees
of the Executive Branch. An audit seeks to determine whether:
(1) Program goals and results identified in enabling legislation
are achieved.
(2) Resources are efficiently and economically used and managed.
(3) Financial operations are properly conducted.
(4) Financial reports are fairly presented.
(5) Applicable laws and regulations are complied with.
(b) In cooperation with Commission management, the Inspector
General generally promotes economy, efficiency, and the effectiveness
of waste or fraud detection and prevention in the Commission's programs
and operations. The Inspector General also keeps the Congress and the
Chairman informed about problems and deficiencies in the Commission's
programs and operations.
(c) The Inspector General reports to the Chairman, but is
independent of all other Commission management. In addition, the
Inspector General independently prepares semi-annual reports to the
Congress.
(d) With respect to misconduct of Commission employees and
contractors, the Inspector General, after consultation with the Ethics
Counsel, where appropriate, serves as the Commission's liaison with
other federal audit and investigative agencies, such as the Department
of Justice and the Executive Council on Integrity and Efficiency.
(e) Subpoenas issued in the course of an audit or investigation
conducted by the Office of the Inspector General shall be effected by
any method prescribed by Sec. 201.232(a) and (c) of this chapter.
9. Section 200.17 is revised to read as follows:
Sec. 200.17 Chief Management Analyst.
The Chief Management Analyst is responsible to the Executive
Director for overseeing the performance of management analysis tasks
which pertain, but are not limited, to:
(a) Agency work methods and procedures;
(b) Effective personnel and resource allocation and utilization;
(c) Organizational structures and delegations of authority;
(d) Management information systems and concepts; and
(e) The preparation of recurring special reports and analyses.
10. In Sec. 200.18(b)(3), the words ``information material'' are
revised to read ``information statements''.
11. In Sec. 200.18(b)(5), the words ``Section 16(a) thereof (15
U.S.C. 78p(a))'' are revised to read ``Section 16 thereof (15 U.S.C.
78p)''.
12. The introductory text of Sec. 200.19a is revised to read as
follows:
Sec. 200.19a Director of the Division of Market Regulation.
The Director of the Division of Market Regulation is responsible to
the Commission for the administration and execution of the Commission's
programs under the Securities Exchange Act of 1934 relating to the
structure and operation of the securities markets and the prevention of
manipulation in the securities markets. These responsibilities include
oversight of the national market system, the national clearance and
settlement system, and self-regulatory organizations, such as the
national securities exchanges, registered securities associations,
clearing agencies, the Municipal Securities Rulemaking Board, and the
Securities Investor Protection Corporation. Duties also include the
registration and regulation of brokers, dealers, municipal securities
dealers, government securities brokers and dealers, transfer agents,
and securities information processors. The functions involved in the
regulation of such entities include reviewing proposed rule changes of
self-regulatory organizations, [[Page 14626]] recommending the adoption
and amendment of Commission rules, responding to interpretive,
exemptive, and no-action requests, and conducting inspections,
examinations, and market surveillance. In addition, the Director shall
have the duties specified below:
* * * * *
13. Section 200.19b is revised to read as follows:
Sec. 200.19b Director of the Division of Enforcement.
The Director of the Division of Enforcement is responsible to the
Commission for supervising and conducting all enforcement activities
under the acts administered by the Commission. The Director recommends
the institution of administrative and injunctive actions arising out of
such enforcement activities and determines the sufficiency of evidence
to support the allegations in any proposed complaint. The Director
supervises the Regional Directors and, in collaboration with the
General Counsel, reviews cases to be recommended to the Department of
Justice for criminal prosecution. The Director grants or denies access
to nonpublic information in the Commission's enforcement files under
Sec. 240.24c-1 of this chapter; provided that access under that section
shall be granted only with the concurrence of the head of the division
or office responsible for the information or the files containing it.
14. Section 200.20b is amended by revising the last sentence of the
introductory text, revising paragraph (f), and removing paragraph (g)
to read as follows:
Sec. 200.20b Director of Division of Investment Management.
* * * These duties shall include inspections arising in connection
with such administration but shall exclude enforcement and related
activities under the jurisdiction of the Division of Enforcement.
* * * * *
(f) The administration and execution of the Public Utility Holding
Company Act of 1935 in connection with:
(1) The administration and processing of proxy solicitation
material subject to Secs. 240.14a-1--240.14a-14 of this chapter.
(2) The examination and processing of ownership reports filed under
section 17(a) of the Act (15 U.S.C. 79q(a)).
15. In Sec. 200.20c, the words ``Applications and Reports'' are
revised to read ``Filings and Information'' in the section heading and
in the text, the last sentence is removed, and two new sentences are
added in its place to read as follows:
Sec. 200.20c Office of Filings and Information Services.
* * * The Office provides filer-support services relating to the
Commission's EDGAR system and the receipt of fees and filings for all
types of filers, regardless of filing media. The Office also manages
the Commission's public reference facilities to facilitate public
access to electronic filings and ensure that all information contained
in public filings with the Commission is timely made available to
investors.
16. Paragraph (a) of Sec. 200.21 is amended by:
(a) Adding in the second sentence after the words ``District
Courts,'' the words ``except for law enforcement actions filed on
behalf of the Commission,'';
(b) Revising in the fourth sentence the words ``officer'' to read
``office'' and ``professional persons'' to read ``lawyers'';
(c) Removing at the end of the fifth sentence the words ``and is
responsible for investigating any claims of staff improprieties'';
(d) Revising the sixth sentence to read ``He or she is responsible
(with the Associate Executive Director of the Office of Administrative
and Personnel Management) for administering the Commission's Ethics
Program, and (with the Ethics Counsel) for interpreting subpart M of
this part and 5 CFR part 2635.''; and
(e) Revising in the seventh sentence the words ``Personnel
Management'' to read ``Administrative and Personnel Management, the
Office of the Inspector General''.
17. Paragraph (b)(2) of Sec. 200.21 is amended by adding after the
words ``administrative proceedings'' the words ``against lawyers''.
18. Section 200.21a is revised to read as follows:
Sec. 200.21a The Ethics Counsel.
(a) The Ethics Counsel within the Office of the General Counsel of
the Commission shall oversee compliance with subpart M of this part and
5 CFR part 2635. When appropriate and subject to the authority of, and
in consultation with, the Inspector General, the Ethics Counsel shall
inquire into alleged violations of subparts C, F, and M of this part,
and 5 CFR part 2635.
(b) Subject to the oversight of the General Counsel or his or her
delegate, the Ethics Counsel shall:
(1) Receive and review allegations of misconduct by a Commission
employee.
(2) Refer matters involving management questions to Division
Directors, Office Heads, District Administrators, or Regional
Directors, and matters involving alleged or apparent employee
misconduct to the Office of the Inspector General, except for matters
involving alleged professional misconduct ultimately referable to state
professional boards or societies.
(3) Refer complaints that appear to involve a violation of Federal
criminal statutes, and do not appear to be frivolous, to the Inspector
General for referral to the Department of Justice under 28 U.S.C. 535.
(4) Act as liaison with the Office of the Inspector General on
matters that the Ethics Counsel has referred to that Office, and with
state or local authorities on matters that, on occasion, the Ethics
Counsel may refer to them.
(5) Arrange for the review of proposed publications and prepared
speeches under Sec. 200.735-4(e).
(6) Provide advice, counseling, interpretations, and opinions with
respect to subparts C, F, and M of this part, and 5 CFR part 2635.
(7) Oversee investigations and refer findings of professional
misconduct to state professional boards or societies.
(8) Draft rules and regulations as necessary to implement the
Commission's Ethics Program.
19. Section 200.22 is revised to read as follows:
Sec. 200.22 The Chief Accountant.
The Chief Accountant of the Commission is the principal adviser to
the Commission on, and is responsible to the Commission for, all
accounting and auditing matters arising in the administration of the
federal securities laws. The Chief Accountant oversees the accounting
profession's standard-setting and self-regulatory organizations,
develops or supervises the development of accounting and auditing
rules, regulations, opinions and policy, and interprets Commission
accounting policy and positions. The Chief Accountant is responsible
for recommending the institution of administrative and disciplinary
proceedings relating to the disqualification of accountants to practice
before the Commission. The Chief Accountant supervises the procedures
to be followed in the Commission's enforcement activities involving
accounting and auditing issues and helps resolve differences on
accounting issues between registrants and the Commission staff.
20. Section 200.23a is revised to read as follows: [[Page 14627]]
Sec. 200.23 Office of Economic Analysis.
The Office of Economic Analysis is responsible for providing an
objective economic perspective to understand and evaluate the economic
dimension of the Commission's regulatory oversight. It performs
economic analyses of proposed rule changes, current or proposed
policies, and capital market developments and offers advice on the
basis of these analyses. The Office also assists the Commission's
enforcement effort by applying economic analysis and statistical tools
to issues raised in enforcement cases. It reviews certifications and
initial and final regulatory flexibility analyses prepared by the
operating divisions under the Regulatory Flexibility Act.
21. Section 200.23b is removed and reserved.
22. In the text only of Sec. 200.24, the word ``Comptroller'' is
revised to read ``Associate Executive Director of the Office of the
Comptroller'' each time it appears, the word ``his'' is revised to read
``his or her'' and the word ``serves'' is revised to read ``serve''.
23. Section 200.24a is revised to read as follows:
Sec. 200.24a Director of the Office of Consumer Affairs.
The Director of the Office of Consumer Affairs is responsible to
the Chairman for the Commission's investor education and consumer
protection program. The program includes, but is not limited to:
(a) Presenting seminars and instructional programs to educate
investors about the securities markets and their rights as investors;
preparing and distributing to the public materials describing the
operations of the securities markets, prudent investor behavior, and
the rights of investors in disputes they may have with individuals and
entities regulated by the Commission; and increasing public knowledge
of the functions of the Commission.
(b) Implementing and administering a nationwide system for
resolving investor complaints against individuals and entities
regulated by the Commission by processing complaints received from
individual investors and assuring that regulated individual and
entities process and respond to such complaints.
(c) Providing information to investors who inquire about
individuals and entities regulated by the Commission, the operation of
the securities markets, or the functions of the Commission.
(d) Advising the Commission and its staff about problems frequently
encountered by investors and possible solutions to them.
(e) Transmitting to other offices and divisions of the Commission
information provided by investors which concerns the responsibilities
of these offices and divisions.
(f) Providing for greater consumer input in Commission rulemaking
proceedings.
24. Section 200.25 is revised to read as follows:
Sec. 200.25 Office of Administrative and Personnel Management.
(a) The Office of Administrative and Personnel Management (OAPM) is
responsible for providing a wide variety of programs for human
resources, office services, and other administrative and management
services for the Commission. The Associate Executive Director of the
Office of Administrative and Personnel Management is responsible to the
Executive Director and the Chairman of the Commission for developing
and executing these programs.
(b) OAPM develops, implements, and evaluates the Commission's
programs for human resources and personnel management, such as position
management and pay administration; recruitment, placement, and
staffing; performance management and employee recognition; employee
training and career development; employee and labor relations;
personnel management evaluation; employee benefits and counseling; and
the processing and maintenance of employee records. OAPM administers
the Ethics Program, and helps the Office of the Executive Director
manage the Senior Executive Service Program. It reviews requests,
recommendations, and justifications for certain awards, recruitment and
relocation bonuses, retention allowances, special salary rates, and
other personnel compensation or benefit determinations for sufficiency
and compliance with law, regulations, and Commission policy. OAPM
develops and executes programs for office services, such as
telecommunications; procurement and contracting; property management;
contract and lease administration; space acquisition and management;
management of official vehicles; safety programs; emergency
preparedness plans; physical security; mail receipt and distribution;
and publications, printing, and desktop publishing.
(c) With respect to human resources management, the Associate
Executive Director of the Office of Administrative and Personnel
Management is the Commission's liaison with the Office of Personnel
Management, other agencies, professional organizations, educational
institutions, and private industry. He or she is also the Printing
Liaison with the Joint Committee on Printing, and the Contract Officer.
25. Section 200.26 is removed and reserved.
26. In Sec. 200.26a, the words ``Systems Management'' are revised
to read ``Technology'' in the section heading and in the text.
27. In Sec. 200.27, the phrase ``subject to policy direction and
review by the Division Directors'' is revised to read ``subject to
review by the Director of the Division of Enforcement and policy
direction and review by the other Division Directors''.
28. Section 200.30-1 is amended by revising paragraphs (e)(2),
(e)(6), (f)(4), (f)(8), (f)(12), and (g)(2) to read as follows:
Sec. 200.30-1 Delegation of authority to Director of Division of
Corporation Finance.
* * * * *
(e) * * *
(2) To authorize the issuance of orders exempting certain
securities from the Act under sections 304(c) and (d) thereof (15
U.S.C. 77ddd(c) and 77ddd(d)) and Sec. 260.4c-1 and Sec. 260.4d-7 of
this chapter.
* * * * *
(6) To authorize the issuance of an order permitting a foreign
person to act as sole trustee under qualified indentures under section
310(a) of the Act (15 U.S.C. 77jjj(a)) and Sec. 260.10a-1 through
Sec. 260.10a-5 of this chapter.
* * * * *
(f) * * *
(4) To authorize the use of forms of proxies, proxy statements, or
other soliciting material within periods of time less than that
prescribed in Secs. 240.14a-6, 240.14a-8(d), and 240.14a-11 of this
chapter; to authorize the filing of information statements within
periods of time less than that prescribed in Sec. 240.14c-5a of this
chapter; and to authorize the filing of information under Sec. 240.14f-
1 of this chapter within periods of time less than that prescribed
therein.
* * * * *
(8) At the request of the issuer to accelerate the termination of
registration of any class of equity securities as provided in section
12(g)(4) of the Act (15 U.S.C. 78l(g)(4)) or as provided in
Sec. 240.12g-4(a) of this chapter.
* * * * *
(12) To grant an exemption from Sec. 240.14b-2(b) or Sec. 240.14b-
2(c), or both, of this chapter.
* * * * * [[Page 14628]]
(g) * * *
(2) The Director of the Division of Corporation Finance shall have
the same authority as that delegated to each Regional Director in
Sec. 200.30-6(a) and (c).
29. Section 200.30-3 is amended by revising paragraphs (a)(21),
(a)(22), and (a)(32), adding an introductory text to paragraph (a)(35),
and revising paragraph (a)(35)(i), the introductory text to paragraph
(a)(39), and paragraphs (a)(39)(ii) and (a)(42) to read as follows:
Sec. 200.30-3 Delegation of authority to Director of Division of
Market Regulation.
(a) * * *
(21) Under section 17A(c)(4)(B) of the Act (15 U.S.C. 78q-
1(c)(4)(B)), to set terms and conditions upon which transfer agents
registered with the Commission may withdraw from registration as a
transfer agent by filing a written notice of withdrawal.
(22) Under section 17A(c)(4)(B) of the Act (15 U.S.C. 78q-
1(c)(4)(B)), to authorize the issuance of orders canceling
registrations of transfer agents registered with the Commission or
denying applications for registration as a transfer agent with the
Commission, if such transfer agents are no longer in existence or are
not engaged in business as transfer agents.
* * * * *
(32) Under Sec. 240.10b-10(f) of this chapter, to grant exemptions
from Sec. 240.10b-10 of this chapter.
* * * * *
(35) Under Sec. 240.13e-4(h)(8) of this chapter:
(i) To grant exemptions from Sec. 240.13e-4 of this chapter; and
* * * * *
(39) Under Sec. 240.9b-1 of this chapter:
(i) * * *
(ii) To require refiling of an amendment to an options disclosure
document pursuant to the procedure set forth in Sec. 240.9b-1(b)(2)(i)
of this chapter.
* * * * *
(42) Under Sec. 240.11Aa3-2(f) of this chapter, to grant or deny
exemptions from Sec. 240.11Aa3-2 of this chapter.
* * * * *
30. Section 200.30-4(a)(2) is revised to read as follows:
Sec. 200.30-4 Delegation of authority to Director of Division of
Enforcement.
* * * * *
(a) * * *
(2) In nonpublic investigative proceedings, to grant requests of
persons to procure copies of the transcript of their testimony under
Sec. 203.6 of this chapter.
* * * * *
31. Section 200.30-5 is amended by revising paragraphs (a)(1),
(a)(2), (b), (d), (e)(3), and (e)(4), adding paragraphs (f)(1)(xxiv)
and (f)(1)(xxv), removing paragraphs (g) and (h), redesignating present
paragraphs (i), (j), (k), (l), (m), and (n) as paragraphs (g), (h),
(i), (j), (k), and (l), respectively, and revising newly designated
paragraph (g)(1) to read as follows:
Sec. 200.30-5 Delegation of Authority to Director of Division of
Investment Management.
* * * * *
(a) * * *
(1) Except as otherwise provided in this section, to issue notices,
under Sec. 270.0-5 of this chapter, with respect to applications for
orders under the Act and the rules and regulations thereunder and, with
respect to section 8(f) of the Act (15 U.S.C. 80a-8(f)), in cases where
no application has been filed, where, upon examination, the matter does
not appear to the Director to present significant issues that have not
been previously settled by the Commission or to raise questions of fact
or policy indicating that the public interest or the interest of
investors warrants that the Commission consider the matter.
(2) Except as otherwise provided in this section, to authorize the
issuance of orders where a notice, under Sec. 270.0-5 of this chapter,
has been issued and no request for a hearing has been received from any
interested person within the period specified in the notice and the
Director believes that the matter presents no significant issues that
have not been previously settled by the Commission and it does not
appear to the Director to be necessary in the public interest or the
interest of investors that the Commission consider the matter.
(b) With respect to matters pertaining to investment companies
registered under the Investment Company Act of 1940 (15 U.S.C. 80a et
seq.), pooled investment funds or accounts, and the general assets or
separate accounts of insurance companies, all arising under the
Securities Act of 1933 (15 U.S.C. 77a, et seq.), the Securities
Exchange Act of 1934 (15 U.S.C. 78a, et seq.), and the Trust Indenture
Act of 1939 (15 U.S.C. 77aaa, et seq.), the same functions as are
delegated to the Director of the Division of Corporation Finance in
regard to companies other than such investment companies in paragraphs
(a), (e), and (f) of Sec. 200.30-1.
* * * * *
(d) To issue certifications to investment companies that are
principally engaged in the furnishing of capital to corporations that
are principally engaged in the development or exploitation of
inventions, technological improvements, new processes, or products not
previously generally available, under Section 851(e) of the Internal
Revenue Code of 1986 (26 U.S.C. 851(e)), where applications from the
investment companies do not present issues that have not been
previously settled by the Commission and do not require a hearing.
(e) * * *
(3) To issue notices, under Sec. 275.0-5 of this chapter, with
respect to applications for orders under the Act and the rules and
regulations thereunder where, upon examination, the matter does not
appear to the Director to present significant issues that have not been
previously settled by the Commission or to raise questions of fact or
policy indicating that the public interest or the interest of investors
warrants that the Commission consider the matter.
(4) To authorize the issuance of orders where a notice, pursuant to
Sec. 275.0-5 of this chapter, has been issued, no request for a hearing
has been received from any interested person within the period
specified in the notice, and the Director believes that the matter
presents no significant issues that have not been previously settled by
the Commission and it does not appear to the Director to be necessary
in the public interest or the interest of investors that the Commission
consider the matter.
* * * * *
(f) * * *
(1) * * *
(xxiv) Section 32, 15 U.S.C. 79ff.
(xxv) Section 33, 15 U.S.C. 79gg.
(g) * * *
(1) The Director of the Division of Investment Management shall
have the same authority with respect to the Securities Act of 1933 (15
U.S.C. 77a, et seq.), Secs. 230.251-230.263, and Secs. 230.651-
230.703(T) of this chapter as that delegated to each Regional Director
in Sec. 200.30-6 (b) and (c).
32. Section 200.30-6 is amended by revising the introductory text
of paragraph (a) to read as follows:
Sec. 200.30-6 Delegation of authority to Regional Directors.
* * * * *
(a) With respect to the registration of securities on Forms SB-1
and SB-2 (Secs. 239.9 and 239.10 of this chapter) filed in the regional
office under the Securities Act of 1933 (15 U.S.C. 77a et
[[Page 14629]] seq.) and Secs. 230.400 et seq. of this chapter:
* * * * *
33. Section 200.30-7(a)(4) is revised to read as follows:
Sec. 200.30-7 Delegation of authority to Secretary of the Commission.
* * * * *
(a) * * *
(4) To grant or deny extensions of time within which to file papers
with the Commission under Sec. 201.13 of this chapter.
34. Section 200.30-9 is revised to read as follows:
Sec. 200.30-9 Delegation of authority to Administrative Law Judges.
Under Pub. L. 87-592, 76 Stat. 394 (15 U.S.C. 78d-1), the
Securities and Exchange Commission hereby delegates, until the
Commission orders otherwise, to each Administrative Law Judge
(``Judge'') the authority to make the initial decision in any
proceeding at which the Judge presides in which a hearing is required
to be conducted in conformity with the Administrative Procedure Act (5
U.S.C. 557) unless an initial decision is waived by all parties that
appear at the hearing and the Commission does not subsequently order
that an initial decision nevertheless be made by the Judge, and in any
other proceeding in which the Commission directs the Judge to make an
initial decision.
35. Section 200.30-11 is amended by revising the section heading,
the introductory text, and paragraphs (a), (b), and (d) to read as
follows:
Sec. 200.30-11 Delegation of authority to Associate Executive Director
of the Office of Filings and Information Services.
Under Pub. L. 87-592, 76 Stat. 394 (15 U.S.C. 78d-1, 78d-2), the
Securities and Exchange Commission hereby delegates the following
functions to the Associate Executive Director of the Office of Filings
and Information Services to be performed by him or her or under his or
her direction by such person or persons as the Chairman of the
Commission may designate from time to time:
(a) With respect to the Securities Exchange Act of 1934 (15 U.S.C.
78a, et seq.):
(1) Under section 15(b) of the Act (15 U.S.C. 78o(b)):
(i) To authorize the issuance of orders granting registration of
brokers or dealers within 45 days of the acceptance of an application
for registration as a broker or dealer (or within such longer period as
to which the applicant consents);
(ii) To grant registration of brokers or dealers sooner than 45
days after acceptance of an application for registration;
(iii) To authorize the issuance of orders canceling registrations
of brokers or dealers, or pending applications for registration, if
such brokers or dealers or applicants for registration are no longer in
existence or are not engaged in business as brokers or dealers; and
(iv) To determine whether notices of withdrawal from registration
on Form BDW shall become effective sooner than the normal 60-day
waiting period.
(2) Under section 15B(a) of the Act (15 U.S.C. 78o-4(a)):
(i) To authorize the issuance of orders granting registration of
municipal securities dealers within 45 days of the filing of acceptable
applications for registration as a municipal securities dealer (or
within such longer period as to which the applicant consents); and
(ii) To grant registration of municipal securities dealers sooner
than 45 days after receipt by the Commission of acceptable applications
for registration.
(3) Under section 15B(c) of the Act (15 U.S.C. 78o-4(c)):
(i) To authorize the issuance of orders canceling registrations of
municipal securities dealers, or pending applications for registration,
if such municipal securities dealers or applicants for registration are
no longer in existence or are not engaged in business as municipal
securities dealers; and
(ii) To determine whether notices of withdrawal from registration
on Form MSDW shall become effective sooner than the normal 60-day
waiting period.
(4) Under section 15C(a) of the Act (15 U.S.C. 78o-5(a)):
(i) To authorize the issuance of orders granting registration of
government securities brokers or government securities dealers for
which the Commission is the appropriate regulatory agency within 45
days of the acceptance of an application for registration as a
government securities broker or government securities dealer (or within
such longer period as to which the applicant consents); and
(ii) To grant registration of government securities brokers or
government securities dealers for which the Commission is the
appropriate regulatory agency sooner than 45 days after acceptance of
an application for registration.
(5) Under section 15C(c) of the Act (15 U.S.C. 78o-5(c)):
(i) To authorize the issuance of orders canceling registrations of
government securities brokers or government securities dealers
registered with the Commission, or pending applications for
registration, if such government securities brokers or government
securities dealers or applicants for registration are no longer in
existence or are not engaged in business as government securities
brokers or government securities dealers; and
(ii) To determine whether notices of withdrawal from registration
on Form BDW shall become effective sooner than the normal 60-day
waiting period.
(6) Under section 17A(c) of the Act (15 U.S.C. 78q-1(c)):
(i) To authorize the issuance of orders granting registration of
transfer agents within 45 days of the filing of acceptable applications
for registration as a transfer agent (or within such longer period as
to which the applicant consents);
(ii) To grant registration of transfer agents sooner than 45 days
after receipt by the Commission of acceptable applications for
registration;
(iii) To authorize the issuance of orders canceling registrations
of transfer agents, or pending applications for registration, if such
transfer agents or applicants for registration are no longer in
existence or are not engaged in business as transfer agents; and
(iv) To determine whether notices of withdrawal from registration
on Form TA-W shall become effective sooner than the normal 60-day
waiting period.
(b) With respect to the Investment Advisers Act of 1940 (15 U.S.C.
80b-1 et seq.):
(1) Under section 203(c) of the Act (15 U.S.C. 80b-3(c)):
(i) To authorize the issuance of orders granting registration of
investment advisers within 45 days of the filing of acceptable
applications for registration as an investment adviser (or within such
longer period as to which the applicant consents); and
(ii) To grant registration of investment advisers sooner than 45
days after receipt by the Commission of acceptable applications for
registration.
(2) Under section 203(h) of the Act (15 U.S.C. 80b-3(h)):
(i) To authorize the issuance of orders canceling registrations of
investment advisers, or pending applications for registration, if such
investment advisers or applicants for registration are no longer in
existence or are not engaged in business as investment advisers; and
(ii) To determine whether notices of withdrawal from registration
on Form ADV-W shall become effective sooner than the normal 60-day
waiting period.
(c) * * *
(d) Notwithstanding anything in the foregoing, in any case in which
the Associate Executive Director of the [[Page 14630]] Office of
Filings and Information Services believes it appropriate, he or she may
submit the matter to the Commission.
* * * * *
36. Section 200.30-12 is removed and reserved.
37. In Sec. 200.30-13, the word ``Comptroller'' in the heading and
the words ``Comptroller of the Commission'' in the text are revised to
read ``Associate Executive Director of the Office of the Comptroller''.
38. In Sec. 200.30-14, remove the semicolon at the end of paragraph
(a) and ``; and'' at the end of paragraph (b) and add in both their
places a period.
39. Section 200.30-15 is revised to read as follows:
Sec. 200.30-15 Delegation of authority to Executive Director.
Under Pub. L. 100-181, 101 Stat. 1254 (15 U.S.C. 78d-1, 78d-2), the
Securities and Exchange Commission hereby delegates, until the
Commission orders otherwise, the following functions to the Executive
Director to be performed by him or her or under his or her direction by
persons designated by the Chairman of the Commission: To identify and
implement additional changes within the Commission that will promote
the principles and standards of the National Performance Review and the
strategic and quality management approaches described by the Federal
Quality Institute's ``Presidential Award for Quality'' or its successor
awards.
PART 270--RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 1940
40. The authority citation for part 270 continues to read in part
as follows:
Authority: 15 U.S.C. 80a-1 et seq., 80a-37, 80a-39, unless
otherwise noted;
* * * * *
41. In the last sentence of Sec. 270.8b-25(b), the words ``(j) and
(k)'' are revised to read ``(h) and (i)''.
By the Commission.
Dated: March 14, 1995.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-6696 Filed 3-17-95; 8:45 am]
BILLING CODE 8010-01-P
