[Federal Register Volume 64, Number 77 (Thursday, April 22, 1999)]
[Proposed Rules]
[Pages 19732-19739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9905]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Part 200
[Release Nos. 34-41288; FOIA-190; and PA-27; File No. S7-14-99]
RIN 3235-AH71
Amendments to the Commission's Freedom of Information Act,
Privacy Act, and Confidential Treatment Rules
AGENCY: Securities and Exchange Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Commission proposes to amend its Freedom of Information
Act, Privacy Act, and confidential treatment rules because they are
outdated in many respects. The proposed amendments would conform these
rules to current statutory and case law and administrative practice.
DATES: Comments must be received by June 21, 1999.
ADDRESSES: You should send three copies of your comments to Jonathan G.
Katz, Secretary, U.S. Securities and Exchange Commission, 450 Fifth
Street, NW., Stop 0609, Washington, DC 20549-0609. You may also submit
your comments electronically to the following electronic address: comments@sec.gov. All comments letters should refer to File
No. S7-14-99; you should also include this file number in the
subject line if you use electronic mail. Comment letters will be
available for public inspection and copying at our Public Reference
Room, 450 Fifth Street, NW., Washington, DC 20549. We will post
electronically-submitted comment letters on our Internet Web site
(http://www.sec.gov).
FOR FURTHER INFORMATION CONTACT: Betty Lopez, FOIA/Privacy Act Officer
(202) 942-4327; or Elizabeth T. Tsai, Staff Attorney, Office of Freedom
of Information and Privacy Act Operations (202) 942-4326.
SUPPLEMENTARY INFORMATION:
I. Discussion of Rule Amendments
The Commission hereby proposes to amend its rules that allow
persons to request records in its possession and request confidential
treatment of records they submit to the Commission. The proposed
amendments would make substantive and procedural changes to conform the
rules to current statutory and case law and Commission practice. Other
changes would correct clerical errors.
For example, under the proposed amendments, persons who voluntarily
submit commercial or financial records to the Commission for which they
are claiming confidentiality must stamp each page of the records
``Voluntarily Submitted'' in order to claim confidentiality under
Critical Mass Energy Project v. Nuclear Regulatory Comm'n.\1\ Also,
requests for confidential treatment and substantiations of such
requests would be deemed confidential and effective for five years from
the date of their last submission unless renewed by the requester.
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\1\ 975 F.2d 871, 880 (D.C. Cir. 1992) (en banc), cert. denied,
507 U.S. 984 (1993).
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Specifically, the Commission proposes to amend 17 CFR 200.80,
200.83, and 200.301 et seq. These rules lay down the procedures for
requesting records under the Freedom of Information Act (``FOIA'') \2\
or the Privacy Act of 1974 (``Privacy Act'') \3\ and allow persons to
request confidential treatment for records they submit to the
Commission.\4\
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\2\ 5 U.S.C. 552.
\3\ 5 U.S.C. 552a.
\4\ 5 U.S.C. 552.
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A. Confidential Treatment Requests
1. Background
The Commission has acquired, and will continue to acquire, a large
number of records from private parties. Some of these records are
regarded as very sensitive by the persons providing them. Yet, members
of the public often want access to those records in the Commission's
possession. Under the FOIA, a request for agency records by any person
must be honored unless they are exempt from disclosure.\5\
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\5\ See 5 U.S.C. 552(b) (FOIA exemptions).
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Thus, the Commission must carefully weigh competing interests in
fulfilling its obligation to disclose non-exempt records to the public
under the FOIA, while preserving the legitimate interest of the
submitter in keeping sensitive records confidential. The Commission
wants to assure submitters of records that it will preserve the
confidentiality of such records to the extent permitted by law and
consistent with the Commission's responsibilities.\6\ The Commission
believes that the submission of records will be encouraged if the
Commission maintains procedures that promote the fair evaluation of
claims of confidentiality and enable it to determine which records may
be withheld from disclosure under the FOIA.
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\6\ A grant of confidential treatment does not preclude
appropriate disclosure of the information, such as to Congress or
another governmental authority. Nor does it preclude disclosure
under a court order or subpoena.
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To that end, in 1980, the Commission adopted confidential treatment
procedures which apply to documents for which there is no other
specific procedure to obtain confidentiality and which, in the normal
course of Commission business, would not be placed in a public file.\7\
The Commission amended these rules in 1982 to provide that, by
delegated authority from the Commission, the General Counsel would
decide confidential treatment appeals.\8\
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\7\ See 45 FR 62418, Sept. 19, 1980. The rule requires persons
wishing to make a request for confidential treatment to submit their
request at the time the information is first provided to the
Commission or as soon thereafter as possible.
\8\ 47 FR 20287, May 12, 1982.
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One of the proposed amendments would implement the opinion of the
District of Columbia Circuit in Critical Mass Energy Project v. Nuclear
Regulatory Comm'n,\9\ in which the Court held that commercial or
financial information, which is voluntarily submitted to an agency and
is of a kind that the submitter would not customarily disclose to the
public, is deemed confidential and, thus, exempt from disclosure under
Exemption 4 of
[[Page 19733]]
the FOIA.\10\ As a result of Critical Mass, the Commission is proposing
new procedures to ensure that records voluntarily submitted are
properly identified as such.
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\9\ 975 F.2d 871 (D.C. Cir. 1992) (en banc), cert. denied, 507
U.S. 984 (1993).
\10\ 975 F.2d at 879. Exemption 4 protects ``trade secrets and
commercial or financial information obtained from a person and
privileged or confidential.'' 5 U.S.C. 552(b)(4).
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The proposed rule also addresses the confidentiality of requests
for confidential treatment and substantiations submitted in support of
such requests and requires that confidential treatment requesters renew
their requests every five years. The Commission is also proposing
certain other changes to conform the rule to current Commission
practice. These rules are not intended to alter the substantive rights
of any person to obtain or protect records under the FOIA or any other
federal statute or regulation.
2. Significant Revisions in the Rule
a. Voluntarily Submitted Information
In Critical Mass, the United States Court of Appeals for the
District of Columbia Circuit held ``that Exemption 4 protects any
financial or commercial information provided to the Government on a
voluntary basis if it is of a kind that the provider would not
customarily release to the public.'' \11\ Before Critical Mass,
commercial or financial information was deemed confidential (and, thus,
exempt) if it was likely that disclosure would ``impair the
government's ability to obtain necessary information in the future'' or
``cause substantial harm to the competitive position of the person''
submitting the information. National Parks & Conservation Ass'n v.
Morton.\12\ Hence, Critical Mass applies to commercial or financial
information submitted voluntarily to an agency, whereas National Parks
remains applicable to such information required to be submitted to an
agency.\13\
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\11\ 975 F.2d at 880.
\12\ 498 F.2d 765, 770 (D.C. Cir. 1974).
\13\ 975 F.2d at 880.
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The Commission's proposed rule requires that submitters designate
the records that they claim to be submitting voluntarily by clearly
marking each page ``Voluntarily Submitted.'' In addition, the submitter
must describe the circumstances under which the records were submitted
to the Commission in sufficient detail to support the claim that they
were voluntarily submitted. No decision whether the records were, in
fact, submitted voluntarily will be made unless the Commission receives
a FOIA request for those records.\14\
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\14\ Indeed, the Commission resolves any request for
confidential treatment only at such time as a FOIA request is made
for the designated records.
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The Commission believes that this proposed rule comports with the
present state of the law.\15\ Moreover, it will facilitate prompt,
efficient review by the FOIA Office and eliminate the need for the
Commission to obtain after-the-fact information of the circumstances of
voluntary submissions.\16\ In short, the new rule should provide more
accurate, reliable information in a manner that will facilitate timely
responses by the FOIA Office to FOIA and confidential treatment
requests.
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\15\ The Commission recognizes that the law relating to
Exemption 4 of the FOIA is still developing and that the applicable
standards may be further modified.
\16\ The person requesting confidential treatment is responsible
for substantiating his request, including any assertion that the
provided confidential commercial or financial records are
voluntarily submitted.
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b. Confidentiality of Confidential Treatment Requests and
Substantiations
The Commission proposes to deem all confidential treatment requests
confidential, even though historically the Commission has viewed such
requests as unprotected by the FOIA.\17\ Frequently, submitters seek
confidential treatment of their confidential treatment requests because
the requests, themselves, contain confidential competitive information
or describe in detail the information for which they seek
confidentiality.
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\17\ See FOIA Rel. No. 65, May 5, 1983, 48 FR 21112.
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In addition, the FOIA Office has been unable to assure confidential
treatment requesters that their substantiations would be kept
confidential during and after the processing of their confidential
treatment requests. The lack of such assurance has, on occasion,
resulted in vague, generalized, or incomplete substantiations by those
who feared that a thorough substantiation would reveal confidential
information.
The Commission now proposes to amend its rules so that confidential
treatment requests and substantiations of confidential treatment
requests will also be deemed confidential. This amendment would
encourage persons requesting confidential treatment to submit full,
detailed substantiations to demonstrate that the records should be
withheld under FOIA Exemption 4.\18\
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\18\ Nevertheless, if the FOIA requester or the confidential
treatment requester files an action in Federal court, the
confidential treatment request and its substantiation could become
part of the court record.
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c. Expiration of Confidential Treatment Requests
The Commission often spends considerable time, effort, and expense
in notifying persons requesting confidential treatment that it has
received a FOIA request for the submitted records. Frequently, however,
notifying requesters becomes impossible because counsel, company
personnel, addresses, or telephone numbers have changed without notice
to the FOIA Office.\19\
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\19\ The Commission's existing confidential treatment rule
requires notice of any change in address or telephone number of a
confidential treatment requester. 17 CFR 200.83(c)(3). Persons
requesting confidential treatment frequently fail, however, to
comply with this requirement.
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Moreover, it has been the Commission's experience that the need for
confidential treatment often diminishes with the passage of time. Thus,
the Commission believes that a rule designating an expiration date for
confidential treatment requests five years after their receipt by the
FOIA Office is appropriate.\20\ To that end, the proposed amendment
states that a confidential treatment request will expire five years
after its receipt by the FOIA Office unless the person requesting
confidentiality renews the request before its expiration date.
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\20\ See Executive Order No. 12,600, 3 CFR, 1987 Comp., p. 235,
permits such time limits.
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3. Other Procedural Provisions in the Confidential Treatment Rules
Under paragraph (c)(2) of the proposed rule, written requests for
confidential treatment must refer to identifying numbers and codes
placed on the records. While the current rule permits a submitter to
attach a cover sheet rather than actually mark each page of the record,
the FOIA Office has encountered difficulties determining which records
are covered when this method is used. Therefore, the amended rule
requires that all records covered by a confidential treatment request
be marked ``Confidential Treatment requested by (name),'' accompanied
by an identifying number and code on each page. Further, the
confidential treatment request and any substantiation should specify by
the identifying code the records they cover.
Finally, the FOIA Office will issue a preliminary decision to the
person requesting confidential treatment under paragraph (e) of the
proposed rule. The requester will then have ten calendar days after the
preliminary decision to respond to the preliminary decision or to
submit a supplemental substantiation if he or she desires. The Office
of Freedom of Information and Privacy Act
[[Page 19734]]
Operations may issue the final decision ten business days after the
preliminary decision if that Office receives no supplemental
substantiation within the time allowed. This change is intended to
conform the rule to the Commission's current practice.
B. Amendments to Rules Regarding Commission Records and Information and
the Privacy of Individuals
1. Commission Records and Information
The proposed amendments are designed to (1) implement the
Electronic Freedom of Information Act Amendments of 1996 (``EFOIA'')
\21\ and the FOIA Reform Act of 1986 (``FOIA Reform Act''),\22\ (2)
clarify the methods used by the Commission to respond to FOIA requests,
and (3) correct outdated information and certain typographical errors
in the present regulations.
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\21\ Pub. L. 104-231, 110 Stat. 3048 (1996).
\22\ Pub. L. 99-570, 100 Stat. 3207 (1986).
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A number of the proposed amendments would conform 17 CFR 200.80 to
the EFOIA. For example, in addition to (1) final opinions and orders,
(2) statements of policy and interpretations adopted by the agency but
not published in the Federal Register, and (3) staff manuals and
instructions which must be available for inspection and copying in the
public reference room,\23\ EFOIA requires that each agency make
available, (4) records processed and disclosed in response to a FOIA
request when the agency determines that those records have become or
are likely to become the subject of subsequent requests; and (5) a
general index of such previously released records.\24\ Moreover, as the
EFOIA permits an agency to respond to a FOIA request within 20 business
days of receipt of the request (rather than 10 days as previously
mandated), the proposed amendments reflect the longer response time
permitted by law.\25\ Lastly, the EFOIA requires each agency to adopt
rules for expedited processing of certain requests.\26\
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\23\ See 5 U.S.C. 552(a)(2).
\24\ See 5 U.S.C. 552(a)(2)(D) and (E).
\25\ 5 U.S.C. 552(a)(6)(A)(i).
\26\ 5 U.S.C. 552(a)(6)(E).
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As amended by the FOIA Reform Act, the FOIA authorizes agencies to
recover review costs from commercial-use requesters.\27\ Review costs
are the direct costs incurred during the initial examination of a
record to determine whether the record must be disclosed and whether to
withhold any portion as exempt from disclosure.\28\ The proposed
amendment would add review fees to search and duplication fees now
authorized under 17 CFR 200.80(e) and would codify the practice of
charging review fees to commercial requesters.
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\27\ 5 U.S.C. 552(a)(4)(A)(ii)(I).
\28\ 5 U.S.C. 552(a)(4)(A)(iv).
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The FOIA Reform Act also requires each agency to promulgate
procedures and guidelines for determining when search, review, and
duplication fees should be waived or reduced.\29\ The proposed
amendment provides that such fees will be waived or reduced if
disclosure is in the public interest because it will likely contribute
significantly to public understanding of government activities and is
not primarily in the commercial interest of the requester. Moreover,
the FOIA Reform Act extends the protection of Exemption 7 to all
records or information that are compiled for law enforcement purposes,
not merely investigatory records. As a result, the proposed amendment
deletes the definition of ``investigatory records'' found in 17 CFR
200.80(b)(7)(ii).
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\29\ Freedom of Information Reform Act of 1986, Pub. L. 99-570,
sec. 1803, 100 Stat. 3207-1, 49 (1986) (amending 5 U.S.C.
552(a)(4)(A)).
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Finally, because the Commission has rescinded certain rules
mentioned in 17 CFR 200.80(b)(4)(ii), the proposed amendments would
delete references to those rules.\30\
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\30\ The Commission has rescinded two of the rules referred to
in 17 CFR 200.80(b)(4)(ii):
17 CFR 240.17a-9 (See Rel. 34-18108, Sept. 21, 1981, 46 FR
49114); and
17 CFR 240.17a-16 (See Rel. 34-20121, Aug. 26, 1983, 48 FR
39604).
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2. The Privacy of Individuals and Systems of Records
The proposed amendments would conform this rule to the current
organization of the Commission and the systems of records it currently
maintains. For example, certain systems of records deemed exempt from
the Privacy Act \31\ are no longer maintained by the Commission or have
been merged into other systems. Consequently, the Commission proposes
to amend Sec. 200.313(a) to reflect these changes. In addition, the
proposed amendments would conform the Commission's rules to a recent
change in the case law regarding requests for information under the
Privacy Act. In Summers v. Dep't of Justice,\32\ the court held that a
verification of an individual's identity for purposes of obtaining
access to Privacy Act records need not be sworn or notarized if the
unsworn statement complies with 28 U.S.C. 1746.\33\ The proposed
amendment would permit such an unsworn statement to verify an
individual's identity.
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\31\ See 17 CFR 200.313(a).
\32\ 999 F.2d 570 (D.C. Cir. 1993).
\33\ Section 1746 permits an unsworn statement when subscribed
as true under penalty of perjury if written in the particular format
set forth in the statute.
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II. Effects on Competition
Section 23(a)(2) of the Securities Exchange Act of 1934 (``Exchange
Act'') \34\ requires the Commission, in adopting rules under the
Exchange Act, to consider the anti-competitive effect of such rules, if
any, and to balance any impact against the regulatory benefits
furthering the purposes of the Exchange Act. The Commission has
considered these proposed amendments to 17 CFR 200.80, 200.83, and
200.301 et seq., in light of the standards cited in section 23(a)(2),
and believes that the amendments will not impose any burden on
competition not necessary or appropriate in furtherance of the Exchange
Act. The proposed amendments would merely conform the rules to current
law, clarify document submission procedures, and help assure voluntary
submitters of confidential commercial or financial information that the
information they submit will not be readily available to competitors.
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\34\ 15 U.S.C. 78w(a)(2).
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III. Statutory Basis of Rule
These amendments are proposed under the authority of the FOIA, 5
U.S.C. 552; the Privacy Act, 5 U.S.C. 552a; the Administrative
Procedure Act, 5 U.S.C. 553; section 19 of the Securities Act of 1933,
15 U.S.C. 77s; sections 23 and 24 of the Exchange Act, 15 U.S.C. 78w,
78x; section 20 of the Public Utility Holding Company Act of 1935, 15
U.S.C. 79t; section 319 of the Trust Indenture Act of 1939, 15 U.S.C.
77sss; section 38 of the Investment Company Act of 1940; 15 U.S.C. 80a-
37; and section 211 of the Investment Advisers Act of 1940, 15 U.S.C.
80b-11.
IV. Initial Regulatory Flexibility Analysis
The Commission has prepared this initial regulatory flexibility
analysis in accordance with 5 U.S.C. 603.
A. Reasons for Action
To update its regulations, the Commission is proposing to amend its
rules to conform them to present Commission organization and practice
and current statutory and case law.
B. Objectives and Legal Basis
These proposed amendments are designed to conform the Commission's
rules to statutory changes in the FOIA, enhance public access to
nonpublic records in the Commission's possession which do not contain
confidential
[[Page 19735]]
commercial or financial information, and improve statutory safeguards
to protect individuals from an invasion of their personal privacy. This
action is authorized by 5 U.S.C. 552, 5 U.S.C. 552a, and Executive
Order 12,600.
C. Small Entities Affected
The proposed changes will affect all small entities requesting
Commission records under the FOIA or requesting confidential treatment
for information that they submit to the Commission. The Commission
believes that the burden imposed on small entities as a result of these
proposed amendments will be negligible. There is no reasonable method
for estimating the number of entities involved.
D. Compliance Requirements
There will be no additional reporting, recordkeeping, or other
compliance requirements.
E. Duplicative, Overlapping, or Conflicting Rules
The Commission believes that there are no duplicative, overlapping,
or conflicting federal rules.
F. Significant Alternatives
There are no significant alternatives to the proposed amendments
that would accomplish the stated objectives of applicable statutes and
executive order.
G. Solicitation of Comments
You may submit written comments on this Initial Regulatory
Flexibility Analysis by sending three copies of your submission to:
Office of the Secretary, Securities and Exchange Commission, 450 Fifth
Street, NW, Washington, DC 20549-0609.
You may also e-mail your comments to rule-comments@sec.gov. Please
note on the first page of your submission that it relates to File No.
S7-14-99. Your comments will be available for public inspection and
copying at the Commission's Public Reference Room at 450 Fifth Street,
NW, Washington, DC 20549. We will consider your comments when we
prepare the Final Regulatory Flexibility Analysis in connection with
the adoption of the final rules.
List of Subjects in 17 CFR Part 200
Administrative practice and procedures; Classified information;
Freedom of information; Privacy.
Text of Amendments to 17 CFR Part 200
For the reasons set out in the preamble, Title 17, Chapter II of
the Code of Federal Regulations is proposed to be amended as follows:
PART 200--ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND
REQUESTS
Subpart D--Information and Requests
1. The authority citation for part 200, subpart D is revised to
read as follows:
Authority: 5 U.S.C. 552, as amended, 15 U.S.C. 77f(d), 77s,
77ggg(a), 78m(F), 78w, 79t, 79v(a), 77sss, 80a-37, 80a-44(a), 80a-
44(b), 80b-10(a), and 80b-11.
Sec. 200.80 also issued under 5 U.S.C. 552b; 15 U.S.C. 78d-1,
78d-2; 78a et seq.; 11 U.S.C. 901, 1109(a).
Sec. 200.80a also issued under 5 U.S.C. 552b.
Secs. 200.80b and 200.80c also issued under 11 U.S.C. 901,
1109(a).
Sec. 200.82 also issued under 15 U.S.C. 78n.
Sec. 200.83 also issued under Exec. Order 12,600, 3 CFR, 1987
Comp., p. 235.
Sec. 200.80 [Amended]
2. Amend Sec. 200.80 by adding ``Northeast and Midwest'' before the
phrase ``Regional Offices'' in the introductory text of paragraph
(a)(2), removing the word ``and'' at the end of paragraph (a)(2)(iv),
removing the period at the end of paragraph (a)(2)(v) and adding in its
place ``; and''; adding paragraph (a)(2)(vi) and republishing paragraph
(a)(2) to read as follows:
Sec. 200.80 Commission records and information.
(a)(1) * * *
(2) Records available for public inspection and copying; documents
published and indexed. * * *
(vi) Copies and a general index of all records which have been
released to any person under the Freedom of Information Act and which,
because of the nature of their subject matter, the Commission
determines have become or are likely to become the subject matter of
subsequent requests for substantially the same records.
* * * * *
3. Amend Sec. 200.80 by redesignating paragraphs (a)(3) and (a)(4)
as paragraphs (a)(4) and (a)(5), correcting ``secton'' to read
``section'' in the first sentence of newly redesignated paragraph
(a)(4), and adding new paragraph (a)(3) to read as follows:
Sec. 200.80 Commission records and information.
(a)(1) * * *
(3) Records created on or after November 1, 1996, which are
required to be available for public inspection and copying under
paragraph (a)(2) of this section, shall be made available on the
Internet.
* * * * *
4. Amend Sec. 200.80, paragraph (b)(4)(ii), by correcting
``pursant'' to read ``pursuant''; by revising the phrase ``15c3-
1(c)(7)(G)'' to read ``15c3-1d(c)(6)(i)''; by revising the phrase ``17
CFR 240.15c-1(c)(7)(vii)'' to read ``17 CFR 240.15c3-1d(c)(6)(i)''; by
revising the phrase ``Rules 17a-9, 17a-10, 17a-12 and 17a-16'' to read
``Rules 17a-10 and 17a-12''; and by revising the phrase ``17 CFR
240.17a-9, 240.17a-10, 240.17a-12, and 240.17a-16'' to read ``17 CFR
240.17a-10 and 240.17a-12''.
5. Amend Sec. 200.80 by removing paragraph (b)(7)(ii); by
redesignating the introductory text of paragraph (b)(7)(i) as paragraph
(b)(7) and paragraphs (b)(7)(i)(A) through (F) as paragraphs (b)(7)(i)
through (b)(7)(vi); by revising the word ``State'' to read ``state'' in
newly redesignated paragraph (b)(7)(iv); and by adding a comma after
the word ``examination'' in paragraph (b)(8).
6. Amend Sec. 200.80(c)(1) as follows:
a. In paragraph (c)(1) introductory text, first sentence, remove
the numbers ``(202-272-3100)'' and revise the phrase ``New York and
Chicago regional offices'' to read ``Northeast and Midwest Regional
Offices''; and, in the second sentence, revise the phrase ``8\1/2\ x
14'' to read ``8\1/2\ x 11'' and the phrase ``New York and Chicago
offices'' to read ``Northeast and Midwest Regional Offices'';
b. In paragraph (c)(1)(i), second sentence, revise the phrases
``regional offices in New York or Chicago'' to read ``Northeast and
Midwest Regional Offices'';
c. In paragraph (c)(1)(iii), first sentence, revise the phrase
``New York and Chicago regional offices'' to read ``Northeast and
Midwest Regional Offices''; and, in the second sentence, revise the
term ``suite'' to read ``Suite'' each time it appears in the list of
Commission offices and, for the Southeast Regional Office, revise the
phrase ``8:30 a.m. to 5 p.m.'' to read ``9:00 a.m. to 5:30 p.m.''.
7. Amend Sec. 200.80(c)(2), first sentence, by revising the phrase
``or by telephone'' to read ``or in writing''; in the second sentence,
by removing the phrase ``and telephone numbers''; and, in the third
sentence, by revising the phrase ``a particular regional office'' to
read ``the Northeast or Midwest Regional Office''.
8. Amend Sec. 200.80(d)(1), first sentence, by adding the word
``the'' after the phrase ``by mail directed to''; in the second
sentence, by adding the word ``the'' after the phrase ``not available
in''; in the third sentence, by revising the phrase ``Securities and
Exchange Commission, Washington, DC 20549'' to read ``SEC Operations
Center, 6432 General Green Way, Alexandria, VA 22312-2413''; and by
adding a sentence
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at the end of paragraph (d)(1) to read as follows:
Sec. 200.80 Commission records and information.
* * * * *
(d) * * *--(1) * * * The request may also be made by facsimile
(703-914-1149) or by Internet (pa@sec.gov).
* * * * *
9. Revise Sec. 200.80(d)(5) to read as follows:
Sec. 200.80 Commission records and information.
* * * * *
(d) * * *
(5) Initial determination; multi-track processing, and denials.--
(i) Time within which to respond. When a request complies with the
procedures in this section for requesting records under the Freedom of
Information Act, a response shall be sent within 20 business days from
the date the Office of Freedom of Information and Privacy Act
Operations receives the request, except as described in paragraphs
(d)(5)(ii) and (d)(5)(iii) of this section. If that Office has
identified the requested records, the response shall state that the
records are being withheld, in whole or in part, under a specific
exemption or are being released.
(ii) Voluminous records. When the requested records are so
voluminous that they cannot be reviewed within 20 business days, as
prescribed in paragraph (d)(5)(i) of this section, the Office of
Freedom of Information and Privacy Act Operations shall inform the
requester of their approximate volume, give the requester the choice of
having the records included in the Commission's first-in, first-out
(FIFO) system for reviewing voluminous records, and state the
approximate time when the review will start. A requester may modify or
limit his or her request to qualify for review within 20 business days.
(iii) Expedited processing. The Office of Freedom of Information
and Privacy Act Operations shall grant a request for expedited
processing if the requester demonstrates a compelling need for the
records. ``Compelling need'' means that a failure to obtain the
requested records on an expedited basis could reasonably be expected to
pose an imminent threat to an individual's life or physical safety or,
if the requester is primarily engaged in disseminating information, an
urgency to inform the public of actual or alleged Federal government
activity. A compelling need shall be demonstrated by a statement,
certified to be true and correct to the best of the requester's
knowledge and belief. The Office of Freedom of Information and Privacy
Act Operations shall notify the requester of the decision to grant or
deny the request for expedited treatment within 10 days of the date of
the request. A request for records that has been granted expedited
processing shall be processed as soon as practicable.
(iv) Notice of denial. Any notification of denial of any request
for records shall state the name and title or position of the person
responsible for the denial of the request, the reason for the decision,
and the right of the requester to appeal to the General Counsel. The
decision shall estimate the volume of records that are being withheld
in their entirety, unless giving such an estimate would harm an
interest protected by the applicable exemption. The amount of
information redacted shall be indicated on the released portion of the
record and, if technically feasible, at the place where the redaction
is made.
(v) Form of releasable records. Releasable records shall be made
available in any form or format requested if they are readily
reproducible in that form or format.
* * * * *
10. Revise the introductory text of Sec. 200.80(d)(6) to read as
follows:
Sec. 200.80 Commission records and information.
* * * * *
(d) * * *
(6) Administrative review. Any person who has received no response
to a request within the period prescribed in paragraph (d)(5) of this
section or within an extended period permitted under paragraph (d)(7)
of this section, or whose request has been denied under paragraph
(d)(5) of this section, may appeal the adverse decision or failure to
respond to the General Counsel.
* * * * *
11. Revise Sec. 200.80(d)(6)(ii) to read as follows:
Sec. 200.80 Commission records and information.
* * * * *
(d) * * *
(6) * * *
(ii) The appeal must be mailed to the Office of Freedom of
Information and Privacy Act Operations, SEC Operations Center, 6432
General Green Way, Alexandria, VA 22312-2413 or delivered to Room 1418
at that address, and a copy of it must be mailed to the General
Counsel, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549 or delivered to Room 1012-B at that address.
12. Amend Sec. 200.80, paragraph (d)(7), introductory text, first
sentence, by revising the word ``reasons'' to read ``unusual
circumstances''; second sentence, by revising the phrase ``working
days'' to read ``business days, except as provided in paragraph (d)(8)
of this section''.
13. Revise Sec. 200.80(d)(8), introductory text, to read as
follows:
Sec. 200.80 Commission records and information.
* * * * *
(d) * * *
(8) Inability to meet time limits. If a request for records cannot
be processed within the time prescribed under paragraph (d)(7) of this
section, the Commission shall so notify and give the requester an
opportunity to modify the request so that it may be processed within
that time or to arrange an alternative time for processing the request
or a modified request. An unreasonable refusal to modify a request or
arrange an alternative time for processing the request shall be a
factor in determining whether unusual circumstances exist under
paragraph (d)(7) of this section.
* * * * *
14. Amend Sec. 200.80(d)(9) by removing the heading ``Oral
requests; misdirected written requests''; removing paragraph (d)(9)(i);
and redesignating paragraph (d)(9)(ii) as paragraph (d)(9).
15. Amend Sec. 200.80(e), introductory text, first sentence, by
adding after the word ``locating'' the word ``, reviewing,''.
16. Amend Sec. 200.80(e)(1), first sentence, by adding the words
``and reviewing'' immediately after the words ``searching for''.
17. Amend Sec. 200.80(e)(3), first sentence, by adding the phrase
``, reviewing'' immediately after the word ``locating''; and third
sentence, by revising the figure ``$25'' to read ``$28'' and the word
``advised'' to read ``informed''.
18. Amend Sec. 200.80, by revising paragraph (e)(4) to read as
follows:
Sec. 200.80 Commission records and information.
* * * * *
(e) * * *
(4) Waiver or reduction of fees. (i) The Office of Freedom of
Information and Privacy Act Operations may waive or reduce search,
review, and duplication fees if:
(A) Disclosure of the requested records is in the public interest
because it is likely to contribute significantly to public
understanding of the operations or activities of the government, and
(B) Disclosure is not primarily in the commercial interest of the
requester.
[[Page 19737]]
(ii) The Office of Freedom of Information and Privacy Act
Operations will determine whether disclosure is likely to contribute
significantly to public understanding of the operations or activities
of the government based upon four factors:
(A) Whether the subject of the requested records concerns the
operations and activities of the Federal government;
(B) Whether the requested records are meaningfully informative on
those operations or activities so that their disclosure would likely
contribute to increased public understanding of specific operations or
activities of the government;
(C) Whether disclosure will contribute to the understanding of the
public at large, rather than the understanding of the requester or a
narrow segment of interested persons; and
(D) Whether disclosure would contribute significantly to public
understanding of the governmental operations or activities.
(iii) The Office of Freedom of Information and Privacy Act
Operations will determine whether disclosure of the requested records
is not primarily in the commercial interest of the requester based upon
two factors:
(A) Whether disclosure would further any commercial interests of
the requester, and
(B) Whether the public interest in disclosure is greater than the
requester's commercial interest.
(iv) If only a portion of the requested records satisfies both the
requirements for a waiver or reduction of fees, a waiver or reduction
of fees will be granted for only that portion.
(v) A request for a waiver or reduction of fees may be a part of a
request for records. Such requests should address all the factors
identified in paragraphs (e)(4)(ii) and (e)(4)(iii) of this section.
(vi) Denials of requests for a waiver or reduction of fees may be
appealed to the General Counsel in accordance with the procedure set
forth in paragraph (d)(6) of this section.
* * * * *
19. Amend Sec. 200.80, paragraph (e)(7)(i), first sentence, by
revising the phrase ``New York, or Chicago'' to read ``Northeast, or
Midwest'' and by removing the word ``Branch''; and paragraph
(e)(7)(ii), last sentence, by removing ``or calling this facility at
202-272-3100''.
20. Amend Sec. 200.80, paragraph (e)(8)(iii), second sentence, by
adding ``U.S.'' before ``Government Printing Office''.
21. Amend Sec. 200.83, by revising paragraphs (c)(2) through
paragraphs (c)(6) and adding paragraphs (c)(7), (c)(8), and (c)(9) to
read as follows:
Sec. 200.83 Confidential treatment procedures under the Freedom of
Information Act.
* * * * *
(c) Written request for confidential treatment to be submitted with
information. (1) * * *
(2) A person who submits a record to the Commission for which he or
she seeks confidential treatment must clearly mark each page or
segregable portion of each page with the words ``Confidential Treatment
Requested by [name]'' and an identifying number and code. In his or her
written confidential treatment request, the person must refer to the
record by identifying number and code.
(3) A person who submits a record to the Commission voluntarily and
requests confidential treatment of it, must comply with paragraph
(c)(2) of this section and mark each page clearly with the words
``Voluntarily Submitted.'' In the written confidential treatment
request, the person must explain the circumstances under which the
record was voluntarily submitted to the Commission. The burden is on
the person requesting confidential treatment to show that the record
was submitted voluntarily.
(4) In addition to giving a copy of any written request for
confidential treatment to the Commission employee receiving the record
in question, the person requesting confidential treatment must send a
copy of the request (but not the record) by mail to the Office of
Freedom of Information and Privacy Act Operations, SEC Operations
Center, 6432 General Green Way, Alexandria, VA 22312-2413. The legend
``FOIA Confidential Treatment Request'' must clearly and prominently
appear on the top of the first page of the written request, and the
written request must contain the name, address, and telephone number of
the person requesting confidential treatment. The person requesting
confidential treatment is responsible for informing the Office of
Freedom of Information and Privacy Act Operations promptly of any
changes in address, telephone number, or representation.
(5) In some circumstances, such as when a person is testifying in
the course of a Commission investigation or providing a record
requested in the course of a Commission examination or inspection, it
may be impracticable to submit a written request for confidential
treatment at the time the record is first given to the Commission. In
no circumstances can the need to comply with the requirements of this
section justify or excuse any delay in submitting any record to the
Commission. The person testifying or otherwise submitting the record
must inform the Commission employee receiving it, at the time the
record is submitted or as soon thereafter as possible, that he or she
is requesting confidential treatment. The person must then submit a
written confidential treatment request within 30 days from the date of
the testimony or the submission of the record. Any confidential
treatment request submitted under this paragraph must also comply with
paragraph (c)(4) of this section.
(6) Where confidential treatment is requested by the submitter on
behalf of another person, the request must identify that person and
provide the telephone number and address of that person or the person's
responsible representative if the submitter would be unable to provide
prompt substantiation of the request at the appropriate time.
(7) No determination on a request for confidential treatment will
be made until the Office of Freedom of Information and Privacy Act
Operations receives a request for disclosure of the record.
(8) A confidential treatment request will expire five years from
the date the Office of Freedom of Information and Privacy Act
Operations receives it, unless that Office receives a renewal request
before the confidential treatment request expires. The renewal request
must be sent by mail to the Office of Freedom of Information and
Privacy Act Operations, SEC Operations Center, 6432 General Green Way,
Alexandria, VA 22312-2413, and must clearly identify the record for
which confidential treatment is sought. A renewal request will likewise
expire five years from the date that Office receives it, unless that
Office receives another timely renewal request which complies with the
requirements of this paragraph.
(9) A confidential treatment request shall be confidential. If an
action is filed in a Federal court, however, by either the Freedom of
Information Act requester (under 5 U.S.C. 552(a)(4) and
Sec. 200.80(d)(6)) or by the confidential treatment requester (under
paragraph (e)(5) of this section), the confidential treatment request
may become part of the court record.
* * * * *
22. Amend Sec. 200.83, paragraph (d)(1), by revising the phrase
``telegram or express'' to read ``facsimile or certified'' and by
adding a sentence to read as follows:
[[Page 19738]]
Sec. 200.83 Confidential treatment procedures under the Freedom of
Information Act.
* * * * *
(d) Substantiation of request for confidential treatment. (1) * * *
Failure to submit a written substantiation within ten calendar days
from the time of notification, or any extension thereof, may be deemed
a waiver of the confidential treatment request and the confidential
treatment requester's right to appeal an initial decision denying
confidential treatment to the Commission's General Counsel as permitted
by paragraph (e) of this section.
* * * * *
23. Revise Sec. 200.83, paragraph (e)(1), to read as follows:
Sec. 200.83 Confidential treatment procedures under the Freedom of
Information Act.
* * * * *
(e) Appeal from initial determination that confidential treatment
is not warranted. (1) The Office of Freedom of Information and Privacy
Act Operations will issue a preliminary decision that will inform the
confidential treatment requester whether that Office is of the view
that confidential treatment is warranted with respect to all or part of
the records in question. The preliminary decision may ask the
confidential treatment requester to submit a supplemental
substantiation within ten calendar days from the date of notice of the
preliminary decision. The confidential treatment requester may respond
to the preliminary decision within ten business days of receipt. The
Office of Freedom of Information and Privacy Act Operations may issue a
final decision no sooner than ten business days after giving notice of
the preliminary decision. It shall inform, by mail or facsimile, the
person seeking the record under the Freedom of Information Act and the
person requesting confidential treatment of the final decision and of
their right to appeal the decision to the Commission's General Counsel
within ten calendar days from the date of the final decision. Records
which the Office of Freedom of Information and Privacy Act Operations
determines are not entitled to confidential treatment may be released
under the Freedom of Information Act no sooner than ten calendar days
after the date of the final decision unless, within those ten calendar
days, it receives an appeal from the confidential treatment requester.
In such a case, the person seeking the information under the Freedom of
Information Act will be informed of the pending appeal and that no
disclosure of the records will be made until the appeal is resolved.
* * * * *
24. Amend Sec. 200.83, paragraph(e)(2), by revising the second
sentence and adding a third sentence to read as follows:
Sec. 200.83 Confidential treatment procedures under the Freedom of
Information Act.
* * * * *
(e) Appeal from initial determination that confidential treatment
is not warranted. (1) * * *
(2) * * * The appeal must be sent by mail to the Office of Freedom
of Information and Privacy Act Operations, SEC Operations Center, 6432
General Green Way, Alexandria, VA 22312-2413, or by facsimile (703-914-
1149). A copy of the appeal must be mailed to the General Counsel,
Securities and Exchange Commission, 450 Fifth Street, NW., Washington,
DC 20549-0606. * * *
25. Amend Sec. 200.83, paragraph(e)(4), first sentence, by revising
the phrase ``telegram or express'' to read ``facsimile or certified''.
26. Amend Sec. 200.83, paragraph (e)(5), last sentence, by revising
the phrase ``telegram or express'' to read ``facsimile or certified''.
27. Amend Sec. 200.83 by redesignating paragraphs (g), (h), and (i)
as paragraphs (h), (i), and (j); by revising the phrase ``(c)(4)'' in
newly redesignated paragraph (h)(1) to read ``(c)(5)''; by revising the
phrase ``(g)(1)'' in the first sentence of newly redesignated paragraph
(h)(2) to read ``(h)(1)''; by removing the commas after ``extended''
and ``Officer'' in newly redesignated paragraph (i), and adding new
paragraphs (g) and (k) to read as follows:
Sec. 200.83 Confidential treatment procedures under the Freedom of
Information Act.
* * * * *
(g) Confidentiality of substantiations. Confidential treatment
requests and substantiations of requests for confidential treatment
shall be confidential. If an action is filed in a Federal court,
however, by either the Freedom of Information Act requester (under 5
U.S.C. 552(a)(4) and Sec. 200.80(d)(6)) or by the person requesting
confidential treatment (under paragraph(e)(5) of this section), the
substantiations may become part of the court record.
* * * * *
(k) In their discretion, the Commission, the Commission's General
Counsel, and the Freedom of Information Act Officer may use alternative
procedures for considering requests for confidential treatment.
Subpart H--Regulations Pertaining to the Privacy of Individuals and
Systems of Records Maintained by the Commission
28. The authority citation for Part 200, Subpart H continues to
read in part as follows:
Authority: 5 U.S.C. 552a(f), unless otherwise noted.
* * * * *
Sec. 200.303 Amended
29. Amend Sec. 200.303, paragraph (a), introductory text, by
revising the clause ``by the individual in person during normal
business hours at the Commission's Public Reference Room which is
located at 450 Fifth Street, NW., Room 1024, Washington, DC, or by mail
addressed to the Privacy Act Officer, Securities and Exchange
Commission, Washington, DC 20549'' to read ``by mail to the Privacy Act
Officer, SEC Operations Center, 6432 General Green Way, Alexandria, VA
22312-2413, or by facsimile (703-914-1149)''.
30. Amend Sec. 200.303, paragraph(a)(2), second sentence, by
revising the phrase ``Commission's Public Reference Room located at 450
Fifth Street, NW., Room 1024, Washington, DC,'' to read ``Office of
Freedom of Information and Privacy Act Operations, SEC Operations
Center, 6432 General Green Way, Alexandria, VA 22312-2413,''; revising
``suite'' to read ``Suite'' each time it appears in the list of
Commission offices; for the Southeast Regional Office, revising the
phrase ``8:30 a.m. to 5 p.m.'' to read ``9:00 a.m. to 5:30 p.m.''; for
the Central Regional Office, revising the acronym ``C.S.T.'' to read
``M.S.T.''; and, in the last sentence of the concluding paragraph,
adding immediately after ``New Year's Day,'' the phrase ``Martin Luther
King, Jr.'s Birthday,''.
31. Amend Sec. 200.303(a)(3), first sentence, by revising the
phrase ``For the purpose of verifying his identity, an'' to read
``An''.
32. Revise Sec. 200.303(a)(4) to read as follows:
Sec. 200.303 Times, places, and requirements for requests pertaining
to individual records in a record system and for the identification of
individuals making requests for access to the records pertaining to
them.
(a) * * *
(4) Method for verifying identity by mail. Where an individual
cannot appear at one of the Commission's Offices for the purpose of
verifying his identity, he must submit along with the request for
information or access, a statement attesting to his identity.
[[Page 19739]]
Where access is being sought, the statement shall include a
representation that the records being sought pertain to the individual
and a statement that the individual is aware that knowingly and
willfully requesting or obtaining records pertaining to an individual
from the Commission under false pretenses is a criminal offense. This
statement shall be a sworn statement, or in lieu of a sworn statement,
an individual may submit an unsworn statement to the same effect if it
is subscribed by him as true under penalty of perjury, dated, and in
substantially the following form:
(i) If executed outside the United States: ``I declare (or certify,
verify, or state) under penalty of perjury under the laws of the United
States of America that the foregoing is true and correct.''
Executed on (date)
(Signature)
(ii) If executed within the United States, its territories,
possessions, or commonwealths: ``I declare (or certify, verify, or
state) under penalty of perjury that the foregoing is true and
correct.''
Executed on (date)
(Signature)
33. Amend Sec. 200.303, paragraph (b)(2), first sentence, by
revising the phrase ``Commission's Public Reference Room in Washington
DC'' to read ``Office of Information and Privacy Act Operations, SEC
Operations Center, 6432 General Green Way, Alexandria, VA 22312-2413''.
34. Revise Sec. 200.306(a), introductory text, to read as follows:
Sec. 200.306 Requests for amendment or correction of records.
(a) Place to make requests. A written request by an individual to
amend or correct records pertaining to him or her may be hand delivered
during normal business hours to the SEC Operations Center, Room 1418,
6432 General Green Way, Alexandria, VA 22312-2414, or be sent by mail
to the Office of Information and Privacy Act Operations, SEC Operations
Center, 6432 General Green Way, Alexandria, VA 22312-2413, or by
facsimile (703-914-1149).
* * * * *
35. Amend Sec. 200.308, paragraph (a), introductory text, by
revising the phrase ``Commission's staff'' to read ``Office of
Information and Privacy Act Operations'' and revising the phrase ``by
applying for an order of the General Counsel determining and directing
that access to the record be granted or that the record be amended or
corrected in accordance with his request'' to read ``to the General
Counsel''.
36. Amend Sec. 200.308, paragraph (a)(1), by revising the word
``application'' to read ``appeal''.
37. Revise Sec. 200.308, paragraph (a)(2), to read as follows:
Sec. 200.308 Appeal of initial adverse agency determination as to
access or as to amendment or correction.
(a) * * *
(2) The appeal shall be delivered or sent by mail to the Office of
Information and Privacy Act Operations, SEC Operations Center, 6432
General Green Way, Alexandria, VA 22312-2413, or by facsimile (703-914-
1149).
* * * * *
38. Amend Sec. 200.308, paragraph (a)(9)(ii) by adding the phrase
``or her'' immediately after the word ``His''.
39. Amend Sec. 200.308, paragraph (b)(1), first sentence, by
revising the phrase ``to the Securities and Exchange Commission, Public
Reference Branch, 450 Fifth Street NW., Room 1024, Washington, DC
20549, or mailed to the Privacy Act Officer, Securities and Exchange
Commission, Washington, DC 20549,'' to read ``or sent by mail to the
Office of Freedom of Information and Privacy Act Operations, SEC
Operations Center, 6432 General Green Way, Alexandria, VA 22312-2413,
or by facsimile (703-914-1149),''.
Sec. 200.310 [Amended]
40. Amend Sec. 200.310, paragraph(a), first sentence, by revising
the phrase ``made in person during normal business hours at the Public
Reference Room at 450 Fifth Street, NW., Room 1024, Washington, DC, or
by mail addressed to the Privacy Act Officer, Securities and Exchange
Commission, Washington, DC 20549'' to read ``sent by mail to the Office
of Freedom of Information and Privacy Act Operations, SEC Operations
Center, 6432 General Green Way, Alexandria, VA 22312-2413, or by
facsimile (703-914-1149)''; and by removing the last sentence.
41. Amend Sec. 200.310, paragraph (b), by revising the phrase ``the
Director of the Office of Consumer Affairs and Information Services''
to read ``the Privacy Act Officer'' and adding the phrase ``or she''
immediately after the word ``he''.
42. Amend Sec. 200.312 by revising paragraphs (a)(1) through (a)(8)
to read as follows:
Sec. 200.312 Specific exemptions.
* * * * *
(a) * * *
(1) Enforcement Files;
(2) Office of General Counsel Working Files;
(3) Office of the Chief Accountant Working Files;
(4) Name-Relationship Index System;
(5) Rule 102(e) of the Commission's Rules of Practice--Appearing or
Practicing Before the Commission; and
(6) Agency Correspondence Tracking System.
* * * * *
By the Commission.
Dated: April 14, 1999.
Jonathan G. Katz,
Secretary.
[FR Doc. 99-9905 Filed 4-21-99; 8:45 am]
BILLING CODE 8010-01-P
