[Federal Register Volume 78, Number 148 (Thursday, August 1, 2013)]
[Rules and Regulations]
[Pages 46498-46499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-18468]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Part 200
[Release No. 34-70049]
Delegation of Authority to Director of the Division of
Enforcement
AGENCY: Securities and Exchange Commission.
ACTION: Final rule.
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SUMMARY: The Securities and Exchange Commission (``Commission'') is
amending its rules to delegate to the Director of the Division of
Enforcement the authority to appoint distribution fund administrators
in enforcement administrative proceedings from a Commission-approved
pool of administrators, and to set the amount of, or waive for good
cause shown, the administrator's bond required by Rule 1105(c) of the
Commission's rules on Fair Fund and Disgorgement Plans.
DATES: Effective Date: August 1, 2013.
FOR FURTHER INFORMATION CONTACT: Nancy Chase Burton, 202-551-4425,
Office of Distributions, Division of Enforcement, Securities and
Exchange Commission, 100 F Street NE., Washington, DC 20549-6553.
SUPPLEMENTARY INFORMATION: In administrative proceedings instituted by
the Commission to enforce the federal securities laws, the Commission,
in the exercise of its discretion, seeks to distribute amounts
collected as disgorgement, prejudgment interest, and penalties to
investor victims. The federal securities laws authorize the Commission
in administrative proceedings to establish disgorgement and other funds
to accomplish this goal. See, e.g., Section 308(a) of the Sarbanes-
Oxley Act of 2002, 15 U.S.C. 7261; Sections 21B(e) and 21C(e) of the
Securities Exchange Act (``Exchange Act''), 15 U.S.C. 78u-2(e) and 78u-
3(e). According to the Commission's regulations, the ``Commission or
[a] hearing officer shall have discretion to appoint any person,
including a Commission employee, as administrator of a plan of
disgorgement or a Fair Fund plan and to delegate to that person
responsibility for administering the plan.'' Rule 1105(a), 17 CFR
201.1105(a). To improve the efficiency of the Commission's distribution
processes, and to centralize certain distribution-related functions
within the Division of Enforcement, the Commission is formally
delegating to the Director of the Division of Enforcement the authority
to appoint certain persons as plan administrators if the person to be
appointed is included in the Commission's approved pool of qualified
administrators.\1\ The Commission is also delegating to the Director,
when the Director appoints an administrator pursuant to this
delegation, the authority to set the amount of, or waive for good cause
shown, the administrator's bond required by Rule 1105(c), 17 CFR
201.1105(c), of the Commission's rules on Fair Fund and Disgorgement
Plans.
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\1\ On July 15, 2013, the Commission approved a pool of nine
firms from which future fund administrators will be appointed to
administer the distribution of disgorgement or fair funds. Each
administrator in the pool will be evaluated annually by the Office
of Distributions and, if performance is deemed in compliance with
the requirements for selection, will be continued in the pool for
another year, up to a total of five years, at which time a selection
process for a new pool will take place. Beginning six months after
approval of the delegation and every six months thereafter, the
Office of Distributions must provide the Commission with a
memorandum discussing the implementation of the delegation and
issues relevant to the Commission's evaluation of the distribution
processes. In particular, each memorandum must include (i) a list of
all distributions assigned to pool participants at that time; (ii)
the stage of each such distribution; and (iii) the Office of
Distributions' evaluation of each administrator responsible for the
distributions. Each memorandum must also discuss, as data becomes
available, the following: (i) whether the delegation has resulted in
lower cost of distributions; (ii) whether the delegation has
resulted in a greater percentage of funds from the distribution
funds being returned to harmed investors; and (iii) whether the
delegation has resulted in more timely and efficient distributions.
The Office of Distributions must follow these procedures in
connection with the delegation authority.
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If the Division Director deems it appropriate, a recommendation to
appoint an administrator from the qualified pool or to set the amount
of, or waive for good cause shown, any administrator's bond may be
submitted to the Commission for review.
Administrative Law Matters:
The Commission finds, in accordance with the Administrative
Procedure Act (``APA'') 5 U.S.C. 553(b)(3)(A), that this amendment
relates solely to agency organization, procedure, or practice, and does
not relate to a substantive rule. Accordingly, the provisions of the
APA regarding notice of rulemaking, opportunity for public comment, and
publication of the amendment prior to its effective date are not
applicable. For the same reason, and because this amendment does not
substantively affect the rights or obligations of non-agency parties,
the provisions of the Small Business Regulatory Enforcement Fairness
Act, 5 U.S.C. 804(3)(C), are not applicable. Additionally, the
provisions of the Regulatory Flexibility Act, which apply only when
notice and comment are required by the APA or other law, 5 U.S.C. 603,
are not applicable. Further, because this amendment imposes no new
burdens on private persons, the Commission does not believe that the
amendment will have any anti-competitive effects for purposes of
Section 23(a)(2) of the Exchange Act, 15 U.S.C. 78w(a)(2). Finally,
this amendment does not contain any collection of information
requirements as defined by the Paperwork Reduction Act of 1980, as
amended. Accordingly, the amendment is effective [insert date of
Federal Register publication].
List of Subjects in 17 CFR Part 200
Administrative practice and procedure, Authority delegations
(Government agencies).
Text of Amendment
For the reasons set out in the preamble, Title 17, Chapter II of
the Code of Federal Regulations is amended as follows:
[[Page 46499]]
PART 200--ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND
REQUESTS
0
1. The authority citation for part 200, subpart A, continues to read in
part as follows:
Authority: 15 U.S.C. 77o, 77s, 77sss, 78d, 78d-1, 78d-2, 78w,
78ll(d), 78mm, 80a-37, 80b-11, 7202, and 7211 et seq., unless
otherwise noted.
* * * * *
0
2. Section 200.30-4 is amended by adding paragraph (a)(17) to read as
follows:
Sec. 200.30-4 Delegation of authority to Director of Division of
Enforcement.
* * * * *
(a) * * *
(17) With respect to disgorgement and Fair Fund plans established
in administrative proceedings instituted by the Commission pursuant to
the federal securities laws, to appoint a person as a plan
administrator, if that person is included in the Commission's approved
pool of administrators, and, for an administrator appointed pursuant to
this delegation, to set the amount of or waive for good cause shown,
the administrator's bond required by Sec. 201.1105(c) of this chapter.
* * * * *
By the Commission.
Dated: July 26, 2013.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-18468 Filed 7-31-13; 8:45 am]
BILLING CODE 8011-01-P