[Federal Register Volume 60, Number 149 (Thursday, August 3, 1995)]
[Rules and Regulations]
[Pages 39643-39645]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19160]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR PART 200
[Release No. 34-36031]
Establishment of Office and Delegation of Authority to Administer
Functions
AGENCY: Securities and Exchange Commission.
ACTION: Final rule.
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SUMMARY: The Securities and Exchange Commission (``Commission'') is
amending its Rules of Organization and Program Management to establish
the Office of Compliance Inspections and Examinations (``OCIE'') and to
delegate authority to administer its functions to the Director of OCIE.
This reorganization is designed to improve efficiency and allow for an
enhanced integration of functions by combining the inspection and
examination operations of the Division of Market Regulation and the
Division of Investment Management.
EFFECTIVE DATE: September 5, 1995.
FOR FURTHER INFORMATION CONTACT: James A. Chan, 202/942-0742; Matthew
O'Toole, 202/942-0694; or Philip H. Oettinger, 202/942-0784.
SUPPLEMENTARY INFORMATION: On March 22, 1995, the Chairman of the
Securities and Exchange Commission announced the creation of a new
office, OCIE, that would combine the inspections and examinations
functions of the Division of Market Regulation and the Division of
Investment Management. The goal of OCIE is to increase the efficiency
of the inspection and examination process by integrating the functions
and personnel of both Divisions. The Commission today is adopting Rules
19c and 30-18 of its Rules of Organization and Program Management to
delegate responsibility for the examination and inspection of brokers,
dealers, transfer agents, self-regulatory organizations, investment
companies, and investment advisers to OCIE, and to establish the
administrative and substantive responsibilities of the Office.
The Commission has determined that this addition to its rules
relates solely to the agency's organization, procedure or practice.
Therefore, the provisions of the Administrative Procedure Act (``APA'')
regarding notice of proposed rulemaking and opportunities for public
participation,1 are not applicable. Similarly, the provisions of
the Regulatory Flexibility Act,2 which apply only when notice and
comment are required by the APA or other law, are not applicable.
\1\ 5 U.S.C. 553.
\2\ 5 U.S.C. 601 et seq.
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In the rare instances involving close questions or cases that may
be potentially controversial, the staff would either consult with the
Commission, or seek Commission authorization before acting.3 The
staff believes that its experience with the issues that may arise in
this area
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reduces the need for day-to-day review by the Commission.
\3\ Rule 30-18(i) states that ``[n]otwithstanding anything in
the foregoing [delegations], in any case in which the Director of
the Office of Compliance Inspections and Examinations believes it
appropriate, the Director may submit the matter to the Commission.''
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Effects on Competition
Section 23(a)(2) of the Securities Exchange Act of 1934 (``Exchange
Act'') 4 requires the Commission, in adopting rules under the
Exchange Act, to consider the anti-competitive effects of such rules,
if any, and to balance any impact against the regulatory benefits
gained in terms of furthering the purposes of the Exchange Act. The
Commission has considered the additions to its rules announced in this
release in light of the standards cited in section 23(a)(2) and
believes that their adoption would not impose any burden on competition
not necessary or appropriate in furtherance of the Exchange Act.
\4\ 15 U.S.C. 78w(a)(2).
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Statutory Basis of Rule
The amendments to the Commission's rules are adopted pursuant to
the authorities set forth herein.
List of Subjects in 17 CFR Part 200
Administrative practices and procedures, Authority delegations
(Government agencies), Organizations and functions (Government
agencies).
For the reasons set out in the preamble, Title 17, Chapter II of
the Code of Federal Regulations is amended as follows:
PART 200--ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION
REQUESTS
Subpart A--Organization and Program Management
1. The authority citation for Part 200, Subpart A continues, in
part, to read 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. Section 200.19c is added to read as follows:
Sec. 200.19c Director of the Office of Compliance Inspections and
Examinations.
The Director of the Office of Compliance Inspections and
Examinations (``OCIE'') is responsible for the compliance inspections
and examinations relating to the regulation of exchanges, national
securities associations, clearing agencies, securities information
processors, the Municipal Securities Rulemaking Board, brokers and
dealers, municipal securities dealers, transfer agents, investment
companies, and investment advisers, under Sections 15C(d)(1) and 17(b)
of the Securities Exchange Act of 1934 (15 U.S.C. 78o-5(d)(1) and
78q(b)), Section 31(b) of the Investment Company Act of 1940 (15 U.S.C.
80a-30(b)), and Section 204 of the Investment Advisers Act of 1940 (15
U.S.C. 80b-4).
3. Section 200.30-18 is added to read as follows:
Sec. 200.30-18 Delegation of authority to Director of the Office of
Compliance Inspections and Examinations.
Pursuant to the provisions of Pub. L. 100-181, 101 Stat. 1254, 1255
(15 U.S.C. 78d-1, 78d-2), the Securities and Exchange Commission hereby
delegates, until the Commission orders otherwise, the following
authority to the Director of the Office of Compliance Inspections and
Examinations (``OCIE'') to be performed by the Director or by such
other person or persons as may be designated from time to time by the
Chairman of the Commission:
(a) To administer the provisions of Sec. 240.24c-1 of this chapter;
provided that access to nonpublic information as defined in such
Section shall be provided only with the concurrence of the head of the
Commission division or office responsible for such information or the
files containing such information.
(b) Pursuant to the Securities Exchange Act of 1934 (``the Exchange
Act'') (15 U.S.C. 78a, et seq.):
(1) To grant and deny applications for confidential treatment filed
pursuant to Section 24(b) of the Exchange Act (15 U.S.C. 78x(b)) and
Rule 24b-2 thereunder (Sec. 240.24b-2 of this chapter); and
(2) To revoke a grant of confidential treatment for any such
application.
(c) Pursuant to Section 17(b) of the Exchange Act (15 U.S.C.
78q(b)), prior to any examination of a registered clearing agency,
registered transfer agent, or registered municipal securities dealer
whose appropriate regulatory agency is not the Commission, to notify
and consult with the appropriate regulatory agency for such clearing
agency, transfer agent, or municipal securities dealer.
(d) Pursuant to Section 17(c)(3) of the Exchange Act (15 U.S.C.
78q(c)(3)), in regard to clearing agencies, transfer agents and
municipal securities dealers for which the Commission is not the
appropriate regulatory agency:
(1) To notify the appropriate regulatory agency of any examination
conducted by the Commission of any such clearing agency, transfer
agent, or municipal securities dealer;
(2) To request from the appropriate regulatory agency a copy of the
report of any examination of any such clearing agency, transfer agent,
or municipal securities dealer conducted by such appropriate regulatory
agency and any data supplied to it in connection with such examination;
and
(3) To furnish to the appropriate regulatory agency on request a
copy of the report of any examination of any such clearing agency,
transfer agent, or municipal securities dealer conducted by the
Commission and any data supplied to it in connection with such
examination.
(e) To administer the provisions of Section 24(d) of the Exchange
Act (15 U.S.C. 78x(d)).
(f) To notify the Securities Investor Protection Corporation
(``SIPC'') of facts concerning the activities and the operational and
financial condition of any registered broker or dealer which is or
appears to be a member of SIPC and which is in or approaching financial
difficulty within the meaning of Section 5 of the Securities Investor
Protection Act of 1970, as amended, 15 U.S.C. 78aa, et seq.
(g) Pursuant to Section 15(b)(2)(C) of the Exchange Act (15 U.S.C.
78o(b)(2)(C)):
(1) To delay until the second six month period from registration
with the Commission the inspection of newly registered broker-dealers
that have not commenced actual operations within six months of their
registration with the Commission; and
(2) To delay until the second six month period from registration
with the Commission the inspection of newly registered broker-dealers
to determine whether they are in compliance with applicable provisions
of the Exchange Act and rules thereunder, other than financial
responsibility rules.
(h) With respect to the Investment Advisers Act of 1940 (``Advisers
Act'') (15 U.S.C. 80b-1, et seq.):
(1) Pursuant to Section 203(h) of the Advisers Act (15 U.S.C.80b-
3(h)), to authorize the issuance of orders cancelling registration of
investment advisers, or 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
(2) Pursuant to Rule 204-2(j)(3)(ii) (Sec. 275.204-2(j)(3)(ii) of
this chapter), to make written demands upon non-resident investment
advisers subject to the provisions of such rule to furnish to the
Commission true, correct, complete, and current copies of any or all
books and records which such non-resident investment advisers are
required to make, keep current, or preserve pursuant to any provision
of any rule or regulation of the Commission adopted
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under the Advisers Act, or any part of such books and records which may
be specified in any such demand.
(i) Notwithstanding anything in the foregoing, in any case in which
the Director of the OCIE believes it appropriate, the Director may
submit the matter to the Commission.
By the Commission.
Dated: July 28, 1995.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-19160 Filed 8-2-95; 8:45 am]
BILLING CODE 8010-01-P
