[Federal Register Volume 79, Number 248 (Monday, December 29, 2014)]
[Proposed Rules]
[Pages 77975-77981]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-30265]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Chapter II
[Release Nos. 33-9694, 34-73891, 39-2500, IC-31389; IA-3986; File No.
S7-13-14]
List of Rules To Be Reviewed Pursuant to the Regulatory
Flexibility Act
AGENCY: Securities and Exchange Commission.
ACTION: Publication of list of rules scheduled for review.
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SUMMARY: The Securities and Exchange Commission is publishing a list of
rules to be reviewed pursuant to Section 610 of the Regulatory
Flexibility Act. The list is published to provide the public with
notice that these rules are scheduled for review by the agency and to
invite public comment on whether the rules should be continued without
change, or should be amended or rescinded to minimize any significant
economic impact of the rules upon a substantial number of such small
entities.
DATES: Comments should be submitted by January 28, 2015.
ADDRESSES: Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/other.shtml); or
Send an email to [email protected]. Please include
File Number S7-13-14 on the subject line; or
Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.
Paper Comments
Send paper comments to Brent Fields, Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File No. S7-13-14. This file number
should be included on the subject line if email is used. To help us
process and review your comments more efficiently, please use only one
method. The Commission will post all comments on the Commission's
Internet Web site (http://www.sec.gov/rules/other.shtml). Comments also
are available for Web site viewing and printing in the Commission's
Public Reference Room, 100 F Street NE., Washington, DC 20549 on
official business days between the hours of 10:00 a.m. and 3:00 p.m.
All comments received will be posted without change; we do not edit
personal
[[Page 77976]]
identifying information from submissions. You should submit only
information that you wish to make available publicly.
FOR FURTHER INFORMATION CONTACT: Anne Sullivan, Office of the General
Counsel, 202-551-5019.
SUPPLEMENTARY INFORMATION: The Regulatory Flexibility Act (``RFA''),
codified at 5 U.S.C. 600-611, requires an agency to review its rules
that have a significant economic impact upon a substantial number of
small entities within ten years of the publication of such rules as
final rules. 5 U.S.C. 610(a). The purpose of the review is ``to
determine whether such rules should be continued without change, or
should be amended or rescinded . . . to minimize any significant
economic impact of the rules upon a substantial number of such small
entities.'' 5 U.S.C. 610(a). The RFA sets forth specific considerations
that must be addressed in the review of each rule:
The continued need for the rule;
the nature of complaints or comments received concerning
the rule from the public;
the complexity of the rule;
the extent to which the rule overlaps, duplicates or
conflicts with other federal rules, and, to the extent feasible, with
state and local governmental rules; and
the length of time since the rule has been evaluated or
the degree to which technology, economic conditions, or other factors
have changed in the area affected by the rule. 5 U.S.C. 610(c).
The Securities and Exchange Commission, as a matter of policy,
reviews all final rules that it published for notice and comment to
assess not only their continued compliance with the RFA, but also to
assess generally their continued utility. When the Commission
implemented the Act in 1980, it stated that it ``intend[ed] to conduct
a broader review [than that required by the RFA], with a view to
identifying those rules in need of modification or even rescission.''
Securities Act Release No. 6302 (Mar. 20, 1981), 46 FR 19251 (Mar. 30,
1981). The list below is therefore broader than that required by the
RFA, and may include rules that do not have a significant economic
impact on a substantial number of small entities. Where the Commission
has previously made a determination of a rule's impact on small
businesses, the determination is noted on the list.
The Commission particularly solicits public comment on whether the
rules listed below affect small businesses in new or different ways
than when they were first adopted.\1\ The rules and forms listed below
are scheduled for review by staff of the Commission during the next 12
months. The list includes 25 rules adopted by the Commission in 2003.
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\1\ Several of the rulemakings identified below included non-
substantive rule amendments, such as conforming cross references.
The Commission requests that commenters focus on the substantive
aspects of the rulemakings indicated in the list.
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Title: Transactions of Investment Companies With Portfolio and
Subadviser Affiliates
Citation: 17 CFR 270.10f-3; 17 CFR 270.12d3-1; 17 CFR 270.17a-6; 17
CFR 270.17a-10; 17 CFR 270.17d-1; 17 CFR 270.17e-1
Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, 80a-39.
Description: The rule and rule amendments (i) expand the exemptions
for investment companies (``funds'') to engage in transactions with
``portfolio affiliates''--companies that are affiliated with the fund
solely as a result of the fund (or an affiliated fund) controlling them
or owning more than five percent of their voting securities and (ii)
permit funds to engage in transactions with subadvisers of affiliated
funds.
Prior Commission Determination Under 5 U.S.C. 601: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with the adoption
of Release No. IC-25888 (January 14, 2003). The Commission considered
comments to the proposing release and to the Initial Regulatory
Flexibility Analysis prepared in Release No. IC-25557 (Apr. 30, 2002)
at that time.
* * * * *
Title: Conditions for Use of Non-GAAP Financial Measures
Citation: 17 CFR 244.100, 17 CFR 244.101, 17 CFR 244.102, and 17
CFR 229.10.
Authority: 15 U.S.C. 77b(b), 15 U.S.C. 77f, 15 U.S.C. 77g, 15
U.S.C. 77h, 15 U.S.C. 77s(a), 15 U.S.C. 77z-3, 15 U.S.C. 78c, 15 U.S.C.
78d, 15 U.S.C. 78j, 15 U.S.C. 78l, 15 U.S.C. 78m, 15 U.S.C. 78o, 15
U.S.C. 78w, 15 U.S.C. 78mm, 15 U.S.C. 7202(a), and 15 U.S.C. 7261.
Description: The Commission adopted rules and amendments requiring
public companies that disclose or release financial information that is
calculated or presented on the basis of methodologies other than in
accordance with Generally Accepted Accounting Principles (GAAP) to
include, in that disclosure or release, a presentation of the most
directly comparable GAAP financial measure and a reconciliation of the
disclosed non-GAAP financial measure to that measure. The amendments
also provide additional guidance to registrants that include non-GAAP
financial measures in Commission filings and require registrants to
furnish to the Commission earnings releases or similar announcements on
Form 8-K.
Prior Commission Determination Under 5 U.S.C. 610: Pursuant to
Section 605(b) of the Regulatory Flexibility Act, the Chairman of the
Commission certified that the rules and amendments would not have a
significant economic impact on a substantial number of small entities
in Release No. 33-8145 (November 5, 2002). The Commission solicited
comments concerning the impact on small entities and the RFA
certification, but received no comments. The final rule was adopted by
the Commission in Release No. 33-8176 (January 22, 2003).
* * * * *
Title: Insider Trades During Pension Fund Blackout Periods
Citation: 17 CFR 240.13a-11, 17 CFR 240.15d-11, 17 CFR 245.100, 17
CFR 245.101, 17 CFR 245.102, 17 CFR 245.103, and 17 CFR 245.104.
Authority: 15 U.S.C. 78c, 15 U.S.C. 78m, 15 U.S.C. 78w(a), 15
U.S.C. 78mm, 15 U.S.C. 80a-29, 15 U.S.C. 80a-37, 15 U.S.C. 7202(a), and
15 U.S.C. 7244(a).
Description: The Commission adopted rules and amendments to clarify
the application and prevent the evasion of Section 306(a) of the
Sarbanes-Oxley Act of 2002, which prohibits any director or executive
officer of an equity security issuer from acquiring or transferring any
equity security of the issuer during a pension plan blackout period
that temporarily prevents plan participants or beneficiaries from
engaging in equity securities transactions through their plan accounts,
if the director or executive officer acquired the equity security in
connection with his or her service or employment as a director or
executive officer. In addition, the rules specify the content and
timing of the notice that issuers must provide to their directors and
executive officers, and to the Commission about the imposition of a
pension plan blackout period.
Prior Commission Determination Under 5 U.S.C. 610: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with the adoption
of Release No. 34-47225 (January 22, 2003). The Commission considered
comments received on the proposing release and the Initial Regulatory
Flexibility Analysis prepared in Release
[[Page 77977]]
No. 34-46778 (November 6, 2002) at that time.
* * * * *
Title: Disclosure Required by Sections 406 and 407 of the Sarbanes-
Oxley Act of 2002.
Citation: 17 CFR 229.401 and 17 CFR 229.406.
Authority: 15 U.S.C. 77e, 15 U.S.C. 77f, 15 U.S.C. 77g, 15 U.S.C.
77j, 15 U.S.C. 77q, 15 U.S.C. 77s, 15 U.S.C. 77z-3, 15 U.S.C. 78l, 15
U.S.C. 78m, 15 U.S.C. 78o, 15 U.S.C. 78w, 15 U.S.C. 78mm, 15 U.S.C.
7202(a), 15 U.S.C. 7264, and 15 U.S.C. 7265.
Description: The Commission adopted amendments to require
companies, other than registered investment companies, to disclose
information relating to whether an audit committee financial expert
serves on the company's audit committee and the adoption and
implementation of a code of ethics that applies to its principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions.
Prior Commission Determination Under 5 U.S.C. 610: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with the adoption
of Release No. 33-8177 (January 23, 2003). The Commission considered
comments received on the proposing release and the Initial Regulatory
Flexibility Analysis prepared in Release No. 33-8138 (October 22, 2002)
at that time.
* * * * *
Title: Retention of Records Relevant to Audits and Reviews
Citation: 17 CFR 210 2-06
Authority: 15 U.S.C. 7202(a), 18 U.S.C. 1519, 15 U.S.C. 77g, 15
U.S.C. 77h, 15 U.S.C. 77j, 15 U.S.C. 77s, 15 U.S.C. 77z-3, 15 U.S.C.
78c, 15 U.S.C. 78j-1, 15 U.S.C. 78l, 15 U.S.C. 78m, 15 U.S.C. 78n, 15
U.S.C. 78q, 15 U.S.C. 78w, 15 U.S.C. 78mm, 15 U.S.C. 80a-8, 15 U.S.C.
80a-29, 15 U.S.C. 80a-30, 15 U.S.C. 80a-31, and 15 U.S.C. 80a-37.
Description: The rules were adopted pursuant to Section 802 of the
Sarbanes-Oxley Act of 2002 to require accounting firms to retain for
seven years certain records relevant to their audits and reviews of
issuers' financial statements. Records to be retained include an
accounting firm's workpapers and certain other documents that contain
conclusions, opinions, analyses, or financial data related to the audit
or review.
Prior Commission Determination Under 5 U.S.C. 601: A Final
Regulatory Flexibility Act Analysis was prepared in accordance with
Section 604 of the Regulatory Flexibility Act in conjunction with the
adoption of Release No. 33-8189 (January 24, 2003). The Commission
considered comments to the proposing release and to the Initial
Regulatory Flexibility Analysis prepared in Release No. 33-8151
(November 21, 2002) at that time.
* * * * *
Title: Certification of Management Investment Company Shareholder
Reports and Designation of Certified Shareholder Reports as Exchange
Act Periodic Reporting Forms; Disclosure Required by Sections 406 and
407 of the Sarbanes-Oxley Act of 2002.
Citation: 17 CFR 270.8b-15; 17 CFR 270.30a-1; 17 CFR 270.30a-2; 17
CFR 270.30a-3; 17 CFR 270.30b1-1; 17 CFR 270.30b1-3; 17 CFR 270.30b2-1;
17 CFR 270.30d-1; 17 CFR 274.101; 17 CFR 274.128.
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l, 78m,
78n, 78o(d), 80a-1 et seq., 80a-8, 80a-24, 80a-26, 80a-29, 80a-34(d),
80a-37, 80a-39, secs. 3(a) and 302, Pub. L. 107-204, 116 Stat. 745.
Description: The Commission adopted rule and form amendments to
require registered management investment companies to file certified
shareholder reports on new Form N-CSR in accordance with Section 302 of
the Sarbanes-Oxley Act. The Commission also adopted new rules to
require registered investment management companies to maintain
disclosure controls and procedures, to disclose whether they had
adopted a code of ethics for their principal executive and senior
financial officers, and to disclose whether they have at least one
``audit committee financial expert'' serving on their audit committees,
as required by that Act.
Determination Under 5 U.S.C. 601: A Final Regulatory Flexibility
Analysis was prepared in accordance with Section 604 of the Regulatory
Flexibility Act in conjunction with the adoption of Release No. IC-
25914 (January 27, 2003). The Commission considered comments to the
proposing release and to the Initial Regulatory Flexibility Analysis
prepared in Release Nos. IC-25723 (Aug. 30, 2002) and 25775 (Oct. 22,
2002) at that time.
* * * * *
Title: Disclosure in Management's Discussion and Analysis about
Off-Balance Sheet Arrangements and Aggregate Contractual Obligations.
Citation: 17 CFR 229.303.
Authority: 15 U.S.C. 77g, 15 U.S.C. 77j, 15 U.S.C. 77s, 15 U.S.C.
77z-2, 15 U.S.C. 77z-3, 15 U.S.C. 78l, 15 U.S.C. 78m, 15 U.S.C. 78n, 15
U.S.C. 78u-5, 15 U.S.C. 78w, 15 U.S.C. 78mm, 15 U.S.C. 7202(a), and 15
U.S.C. 7261(a).
Description: The Commission adopted the amendments to require
disclosure of off-balance sheet arrangements in a separately captioned
subsection of the Management's Discussion and Analysis section of a
registrant's disclosure documents. The amendments also require
registrants, other than smaller reporting companies, to provide tabular
disclosure of aggregate contractual obligations as of the latest fiscal
year-end balance sheet date.
Prior Commission Determination Under 5 U.S.C. 610: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with the adoption
of Release No. 33-8182 (January 28, 2003). The Commission solicited
comments concerning the impact on small entities and the Initial
Regulatory Flexibility Analysis prepared in Release No. 33-8144
(November 4, 2002), but received no comments.
* * * * *
Title: Implementation of Standards of Professional Conduct for
Attorneys
Citation: 17 CFR part 205.
Authority: 15 U.S.C. 7202, 7245, 7262.
Description: The Commission adopted a rule establishing standards
of professional conduct for attorneys who appear and practice before
the Commission on behalf of issuers. Section 307 of the Sarbanes-Oxley
Act of 2002 requires the Commission to prescribe minimum standards of
professional conduct for attorneys appearing and practicing before the
Commission in any way in the representation of issuers. The rule
requires an attorney to report evidence of a material violation of
securities laws or breach of fiduciary duty or similar violation by the
issuer up-the-ladder within the company.
Prior Commission Determination Under 5 U.S.C. 610: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with the adoption
of Release No. 33-8185 (January 29, 2003). The Commission solicited
comments concerning the impact on small entities and the Initial
Regulatory Flexibility Analysis prepared in Release No. 33-8150 (Nov.
21, 2002), but received no comments.
* * * * *
Title: Proxy Voting by Investment Advisers
Citation: 17 CFR 275.204-2; 17 CFR 275.206(4)-6.
[[Page 77978]]
Authority: 15 U.S.C. 80b-2(a)(11)(F), 80b-2(a)(17), 80b-3, 80b-4,
80b-6(4), 80b-6a, 80b-11.
Description: The rule and rule amendments require investment
advisers that exercise voting authority over client securities to adopt
written policies and procedures that are reasonably designed to ensure
the adviser votes proxies in the best interest of clients, disclose to
clients information about those policies and procedures and how clients
may obtain information on how the adviser has voted their proxies, and
retain certain records relating to proxy voting.
Prior Commission Determination Under 5 U.S.C. 601: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act regarding rule 206(4)-6 and rule
204-2 under the Investment Advisers Act of 1940 in conjunction with the
adoption of Release No. IA-2106 (January 31, 2003). The Commission
considered comments to the proposing release and to the Initial
Regulatory Flexibility Analysis prepared in Release No. IA-2059
(September 20, 2002) at that time.
* * * * *
Title: Disclosure of Proxy Voting Policies and Proxy Voting Records
by Registered Management Investment Companies
Citation: 17 CFR 270.30b1-4; 17 CFR 274.11A; 17 CFR 274.11a-1; 17
CFR 274.11b; 17 CFR 274.128; 17 CFR 274.130.
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l, 78m,
78n, 78o(d), 80a-1 et seq., 80a-24, 80a-26, and 80a-29, 80a-34(d), 80a-
37, 80a-39.
Description: The rule and rule amendments require registered
management investment companies (i) to provide disclosure about how
they vote proxies relating to portfolio securities they hold, (ii) to
disclose the policies and procedures that they use to determine how to
vote proxies relating to portfolio securities, and (iii) to file with
the Commission and to make available to shareholders the specific proxy
votes that they cast in shareholder meetings of issuers of portfolio
securities.
Determination Under 5 U.S.C. 601: A Final Regulatory Flexibility
Analysis was prepared in accordance with Section 604 of the Regulatory
Flexibility Act in conjunction with the adoption of Release No. IC-
25922 (January 31, 2003). The Commission considered comments to the
proposing release and to the Initial Regulatory Flexibility Analysis
prepared in Release No. IC-25739 (Sept. 20, 2002) at that time.
* * * * *
Title: Custody of Investment Company Assets with a Securities
Depository
Citation: 17 CFR 270.17f-4.
Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, 80a-39.
Description: The rule amendments expand the types of investment
companies that may maintain assets with a depository, and update the
conditions they must follow to use a depository. The amendments respond
to developments in securities depository practices and commercial law
since the rule was adopted.
Prior Commission Determination Under 5 U.S.C. 601: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with the adoption
of Release No. IC-25934 (February 13, 2003). The Commission considered
comments to the proposing release and to the Initial Regulatory
Flexibility Analysis prepared in Release No. IC-25266 (Nov. 15, 2001)
at that time.
* * * * *
Title: Definition of Terms in and Specific Exemptions for Banks,
Savings Associations, and Savings Banks Under Sections 3(a)(4) and
3(a)(5) of the Securities Exchange Act of 1934
Citation: 17 CFR 240.3a5-1, 17 CFR 240.3b-18, 17 CFR 240.15a-8, and
17 CFR 240.15a-11
Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee,
77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1,
78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78ll,
78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, and 80b-
11.
Description: The Commission adopted amendments to its rule granting
an exemption to banks from dealer registration for a de minimis number
of riskless principal transactions, and to its rule that defines terms
used in the bank exception to dealer registration for asset-backed
transactions. The Commission also adopted a new exemption for banks
from the definition of broker and dealer under the Securities Exchange
Act of 1934 for certain securities lending transactions. In addition,
the Commission extended the exemption from rescission liability under
Exchange Act Section 29 to contracts entered into by banks acting in a
dealer capacity before March 31, 2005. These rules addressed certain of
the exceptions for banks from the definitions of ``broker'' and
``dealer'' that were added to the Securities Exchange Act by the Gramm-
Leach-Bliley Act.
Prior Commission Determination Under 5 U.S.C. 610: Pursuant to
Section 605(b) of the Regulatory Flexibility Act, the Commission
certified that the amendment to the rule would not have a significant
economic impact on a substantial number of small entities. This
certification was incorporated into the proposing release, Release No.
34-46745 (November 5, 2002). As stated in the adopting release, No. 34-
47364 (February 14, 2003), the Commission received no comments
concerning the impact on small entities or the Regulatory Flexibility
Act Certification.
* * * * *
Title: Regulation Analyst Certification
Citation: 17 CFR 242.500 through 505.
Authority: 15 U.S.C. 77g, 77q(a), 77s(a), 78b, 78c, 78g(c)(2),
78i(a), 78j, 78k-1(c), 78l, 78m, 78mm, 78n, 78o(b), 78o(c), 78o(g),
78q(a), 78q(b), 78q(h), 78w(a), 78dd-1, 80a-23, 80a-29, and 80a-37.
Description: Regulation Analyst Certification (``Regulation AC'')
requires that brokers, dealers, and certain persons associated with a
broker or dealer include in research reports certifications by the
research analyst that the views expressed in the report accurately
reflect his or her personal views, and disclose whether or not the
analyst received compensation or other payments in connection with his
or her specific recommendations or views. Broker-dealers are also
required to obtain periodic certifications by research analysts in
connection with the analyst's public appearances.
Prior Commission Determination Under 5 U.S.C. 610: Pursuant to
Section 605(b) of the Regulatory Flexibility Act, the Commission
certified that Regulation AC would not have a significant economic
impact on a substantial number of small entities. This certification,
including the reasons supporting the certification, was set forth in
the proposing release, Release No. 33-8119 (August 2, 2002). The
Commission solicited comments on the potential impact of Regulation AC
on small entities in the proposing release. No comments were received
that discussed the Regulatory Flexibility Act Certification. However,
in the adopting release, Release No. 33-8193 (February 20, 2003), in
response to other comments, the Commission revised its estimates and
concluded that the total burden in hours required to comply with
proposed Regulation AC would be approximately 5.78 hours per year, per
small firm, as compared to the original estimate of two hours and two
minutes per year, per small firm.
* * * * *
[[Page 77979]]
Title: Standards Relating to Listed Company Audit Committees
Citation: 17 CFR 229.401 and 17 CFR 240.10A-3.
Authority: 15 U.S.C. 77b, 15 U.S.C. 77f, 15 U.S.C. 77g, 15 U.S.C.
77h, 15 U.S.C. 77j, 15 U.S.C. 77q, 15 U.S.C. 77s, 15 U.S.C. 78c(b), 15
U.S.C. 78j-1, 15 U.S.C. 78l, 15 U.S.C. 78m, 15 U.S.C. 78n, 15 U.S.C.
78o, 15 U.S.C. 78w, 15 U.S.C. 78mm, 15 U.S.C. 80a-8, 15 U.S.C. 80a-20,
15 U.S.C. 80a-24(a), 15 U.S.C. 80a-29, 15 U.S.C. 80a-37, and 15 U.S.C.
7202.
Description: The Commission adopted rules to direct the national
securities exchanges and national securities associations to prohibit
the listing of any security of an issuer that is not in compliance with
the audit committee requirements mandated by the Sarbanes-Oxley Act of
2002. In addition, the Commission adopted amendments changing its
disclosure requirements regarding audit committees.
Prior Commission Determination Under 5 U.S.C. 610: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with the adoption
of Release No. 33-8220 (April 9, 2003). The Commission solicited
comments concerning the impact on small entities and the Initial
Regulatory Flexibility Analysis prepared in Release No. 33-8173
(January 8, 2003), but received no comments.
* * * * *
Title: Customer Identification Programs for Mutual Funds
Citation: 17 CFR 270.0-11
Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, 80a-39.
Description: The rule implements section 326 of the USA PATRIOT Act
of 2001 and requires investment companies (i) to implement procedures
to verify the identity of any person seeking to open an account, (ii)
to the extent reasonable and practicable, to maintain records of the
information used to verify the person's identity, and (iii) to
determine whether the person appears on any lists of known or suspected
terrorists or terrorist organizations provided to investment companies
by any government agency.
Prior Commission Determination Under 5 U.S.C. 601: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with the adoption
of Release No. IC-26031 (April 29, 2003). The Commission considered
comments to the proposing release and to the Initial Regulatory
Flexibility Analysis prepared in Release No. 34-46192 (July 12, 2002)
at that time.
* * * * *
Title: Improper Influence on Conduct of Audits
Citation: 17 CFR 240 13b2-2.
Authority: 15 U.S.C. 7202(a), 15 U.S.C. 7242, 15 U.S.C. 77e, 15
U.S.C. 77f, 15 U.S.C. 77g, 15 U.S.C. 77h, 15 U.S.C. 77j, 15 U.S.C. 77s,
15 U.S.C. 78c, 15 U.S.C. 78j-1, 15 U.S.C 78l, 15 U.S.C. 78m, 15 U.S.C.
78n, 15 U.S.C. 78o, 15 U.S.C. 78q, 15 U.S.C. 78w, 15 U.S.C. 80a-6, 15
U.S.C. 80a-8, 15 U.S.C 80a-20, 15 U.S.C. 80a-29, 15 U.S.C 80a-30, and
15 U.S.C. 80a-37.
Description: The rules were adopted pursuant to the requirements of
Section 303 of the Sarbanes-Oxley Act of 2002 to prohibit officers and
directors of an issuer, and persons acting under the direction of an
officer or director, from taking any action to coerce, manipulate,
mislead, or fraudulently influence the auditor of the issuer's
financial statements if that person knew or should have known that such
action, if successful, could result in rendering the financial
statements materially misleading.
Prior Commission Determination Under 5 U.S.C. 601: A Final
Regulatory Flexibility Act Analysis was prepared in accordance with
Section 604 of the Regulatory Flexibility Act in conjunction with the
adoption of Release No. 34-47890 (May 20, 2003). The Commission
considered comments to the proposing release and to the Initial
Regulatory Flexibility Analysis prepared in Release No. 34-46685
(October 18, 2002) at that time.
* * * * *
Title: Management's Reports on Internal Control Over Financial
Reporting and Certification of Disclosure in Exchange Act Periodic
Reports
Citation: 17 CFR 210.1-02, 17 CFR 210.2-02, 17 CFR 229.307, 17 CFR
229.308, 17 CFR 240.12b-15, 17 CFR 240.13a-14, 17 CFR 240.13a-15, 17
CFR 240.15d-14, 17 CFR 240.15d-15.
Authority: 15 U.S.C. 77e, 15 U.S.C. 77f, 15 U.S.C. 77g, 15 U.S.C.
77j, 15 U.S.C. 77q, 15 U.S.C. 77s, 15 U.S.C. 78l, 15 U.S.C. 78m, 15
U.S.C. 78o, 15 U.S.C. 78w, 15 U.S.C. 78mm, 15 U.S.C. 80a-8, 15 U.S.C.
80a-29, 15 U.S.C. 80a-30, 15 U.S.C. 80a-37, 15 U.S.C. 7202(a), 15
U.S.C. 7241, 15 U.S.C. 7262, 15 U.S.C. 7263, and 18 U.S.C. 1350.
Description: The rules and amendments were adopted in light of
Congress' directive in Section 404 of the Sarbanes-Oxley Act of 2002 to
require reporting companies, other than registered investment
companies, to include in their annual reports a report of management on
the company's internal control over financial reporting. The internal
control report must include management's assessment of the
effectiveness of the company's internal control over financial
reporting as of the end of its most recent fiscal year, as well as a
statement that the registered public accounting firm that audited the
company's financial statements included in the annual report has issued
an attestation report on management's assessment. The rules also
require companies to file the registered public accounting firm's
attestation report as part of its annual report. Further, the rules
require that management evaluate any change in the company's internal
control over financial reporting that occurred during a fiscal quarter
that has or is reasonably likely to materially affect the company's
internal control over financial reporting. In addition, the amendments
require companies to provide the certifications required by Sections
302 and 906 of the Sarbanes-Oxley Act as exhibits to certain periodic
reports.
In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection
Act amended Section 404 of the Sarbanes-Oxley Act to provide that
Section 404(b) shall not apply with respect to any audit report
prepared for an issuer that is neither an accelerated filer, nor a
large accelerated filer, as defined in Exchange Act Rule 12b-2. In
2010, the Commission adopted conforming amendments to its rules.
Prior Commission Determination Under 5 U.S.C. 610: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with the adoption
of Release No. 33-8238 (June 5, 2003). The Commission solicited
comments with respect to the rules and amendments in two separate
proposing releases, Release Nos. 33-8138 (October 22, 2002) and 33-8212
(March 21, 2003). The Commission also solicited comments concerning the
impact on small entities and the Initial Regulatory Flexibility
Analysis, but received no comments on the impact on small entities of
the new certification requirements.
* * * * *
Title: Certain Research and Development Companies
Citation: 17 CFR 270.3a-8
Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, 80a-39.
Description: The rule provides a nonexclusive safe harbor from the
definition of an investment company for
[[Page 77980]]
certain bona fide research and development companies.
Prior Commission Determination Under 5 U.S.C. 601: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with the adoption
of Release No. IC-26077 (June 16, 2003). The Commission solicited
comments concerning the impact on small entities and the Initial
Regulatory Flexibility Analysis prepared in Release No. IC-25835 (Nov.
26, 2002) but received no comments.
* * * * *
Title: Custody of Funds or Securities of Clients by Investment
Advisers
Citation: 17 CFR 275.206(4)-2; 17 CFR 279.1
Authority: 15 U.S.C. 80b-1 et seq., 80b-2(a)(11)(F), 80b-2(a)(17),
80b-3, 80b-4, 80b-6(4), 80b-6a, 80b-11
Description: The amendments to the custody rule conformed the rule
to modern custodial practices and required advisers that have custody
of client funds or securities to maintain those assets with broker-
dealers, banks, or other qualified custodians. The amendments were
designed to enhance protections for client assets while reducing
burdens on advisers that have custody of client assets.
Prior Commission Determination Under 5 U.S.C. 601: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act with respect to amended rule
206(4)-2 under the Advisers Act and to amended Part 1A, Item 9 and Part
II, Item 14 of Form ADV in conjunction with the adoption of Release No.
IA- 2176 (September 25, 2003). The Commission solicited comments
concerning the impact on small entities and the Initial Regulatory
Flexibility Analysis prepared in Release No. IA-2044 (July 18, 2002),
but received no comments.
* * * * *
Title: Amendments to Investment Company Advertising Rules
Citation: 17 CFR 270.34b-1
Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, 80a-39.
Description: The rule amendments (i) require enhanced disclosure in
investment company advertisements to encourage advertisements that
convey balanced information to prospective investors, particularly with
respect to past performance, and (ii) implement section 24(g) of the
Investment Company Act by permitting the use of a prospectus under
section 10(b) of the Securities Act with respect to securities issued
by an investment company that includes information the substance of
which is not included in the investment company's statutory prospectus.
Prior Commission Determination Under 5 U.S.C. 601: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with the adoption
of Release No. IC-26195 (September 29, 2003). The Commission considered
comments to the proposing release and to the Initial Regulatory
Flexibility Analysis prepared in Release No. IC-25575 (May 17, 2002) at
that time.
* * * * *
Title: Purchases of Certain Equity Securities by the Issuer and
Others
Citation: 17 CFR 228.703; 17 CFR 229.703; 17 CFR 240.10b-18; 17 CFR
249.220f; 17 CFR 249.308a; 17 CFR 249.308b; 17 CFR 249.310; 17 CFR
249.310b; 17 CFR 249.33117 CFR 270.23c-1; 17 CFR 274.128; 17 CFR
274.201
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77K, 77s, 77z-2, 77z-3,
77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn,
77sss, 77ttt, 78c, 78c(b),), 78d, 78i, 78j, 78j-1, 78k, 78k-1, 78l,
78l, 78m, 78n, 78o, 78p, 78q, 78s, 78l, 78m, 78n, 78o(d), 78u-5, 78w,
78x, 78ll, 78mm, 79e, 79j, 79n, 79q, 79t, 80a-1 et seq., 80a-8, 80a-9,
80a-20, 80a-23, 80a-24, 80a-26, 80a-29, 80a-30, 80a-24, 80a-26, 80a-29,
80a-34(d), 80a-38(a), 80a-37, 80a-39, 80b-3, 80b-4, 80b-11, 7201 et
seq., 18 U.S.C. 1350.
Description: The rule amendments provide issuers with a ``safe
harbor'' from liability for manipulation when they repurchase their
common stock in the market in accordance with the rule's manner,
timing, price, and volume conditions. The amendments are intended to
simplify and update the safe harbor provisions in light of market
developments since the rule's adoption. To enhance the transparency of
issuer repurchases, the Commission also adopted amendments to a number
of regulations and forms regarding disclosure of repurchases of equity
securities by the issuer and affiliated purchasers (both open market
and private transactions), regardless of whether the repurchases are
effected in accordance with the issuer repurchase safe harbor rule.
Prior Commission Determination Under 5 U.S.C. 601: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with the adoption
of Release No. 33-8335 (November 10, 2003). The Commission solicited
comments concerning the impact on small entities and the Initial
Regulatory Flexibility Analysis prepared in Release No. 34-46980
(December 10, 2002), but received no comments.
* * * * *
Title: Disclosure Regarding Nominating Committee Functions and
Communications Between Security Holders and Boards of Directors
Citation: 17 CFR 270.30a-2; 17 CFR 274.128
Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, 80a-39.
Description: The rule amendments impose new disclosure requirements
and amendments to existing disclosure requirements to enhance the
transparency of the operations of boards of directors. Specifically,
the Commission adopted enhancements to existing disclosure requirements
regarding the operations of board nominating committees and a new
disclosure requirement concerning the means, if any, by which security
holders may communicate with directors. These rules require disclosure
but do not mandate any particular action by a company or its board of
directors; rather, the new disclosure requirements are intended to make
more transparent to security holders the operation of the boards of
directors of the companies in which they invest.
Prior Commission Determination Under 5 U.S.C. 601: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with the adoption
of Release No. IC-26262 (November 24, 2003). The Commission solicited
comments on the proposing release and on the Initial Regulatory
Flexibility Analysis prepared in Release No. 34-48301 (August 8, 2003).
The Commission received no comments on the Initial Regulatory
Flexibility Analysis, but it did receive comments on the impact of the
proposed rules on small business issuers. The Commission considered
those comments in the adopting release.
* * * * *
Title: Processing Requirements for Cancelled Security Certificates
Citation: 17 CFR 240.17f-1, 17 CFR 240.17Ad-7, 17 CFR 240.17Ad-12,
and 17 CFR 240.17Ad-19
Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee,
77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1,
78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78ll,
78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11,
7202, 7241, 7262, and 7263, and 18 U.S.C. 1350.
[[Page 77981]]
Description: This rule requires every transfer agent to establish
and implement written procedures for the cancellation, storage,
transportation, destruction, or other disposition of securities
certificates. The rule requires transfer agents to mark each cancelled
securities certificate with the word ``cancelled''; maintain a secure
storage area for cancelled certificates; maintain a retrievable
database of all cancelled, destroyed, or otherwise disposed of
certificates; and have specific procedures for the destruction of
cancelled certificates. Additionally, the Commission amended its lost
and stolen securities rule and its transfer agent safekeeping rule to
make it clear that these rules apply to unissued and cancelled
certificates.
Prior Commission Determination Under 5 U.S.C. 610: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with the adoption
of Release No. 34-48931 (December 16, 2003). The Commission solicited
comment on the Initial Regulatory Flexibility Analysis prepared in the
proposing release, Release No. 34-43401 (October 2, 2000), but received
no comment on that analysis. The Commission did receive comments
related to small business, and considered those comments in the
adopting release.
* * * * *
Title: Compliance Programs of Investment Companies and Investment
Advisers
Citation: 17 CFR 270.38a-1; 17 CFR 275.204-2; 17 CFR 275.206(4)-7
Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, 80a-39, 80b-
1 et seq., 80b-2(a)(11)(F), 80b-2(a)(17), 80b-3, 80b-4, 80b-6(4), 80b-
6a, 80b-11
Description: The rules require each investment company and
investment adviser registered with the Commission and each business
development company to (i) adopt and implement written compliance
policies and procedures, (ii) review those policies and procedures
annually, and (iii) appoint a compliance officer to be responsible for
administering the policies and procedures. The rules also impose a new
recordkeeping requirement.
Prior Commission Determination Under 5 U.S.C. 601: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act regarding rule 38a-1 under the
Investment Company Act of 1940, new rule 206(4)-7 under the Investment
Advisers Act, and amendments to rule 204-2 under the Investment
Advisers Act, and to Part 1, Schedule A, Item 2(a) of Form ADV in
conjunction with the Commission's adoption of Release No. IA-2204
(December 17, 2003). The Commission considered comments on the
proposing release and on the Initial Regulatory Flexibility Analysis
prepared in Release No. IC-25925 (Feb. 5, 2003) at that time.
* * * * *
Title: Recordkeeping Requirements for Registered Transfer Agents
Citation: 17 CFR 240. 240.17Ad-7
Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee,
77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1,
78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78ll,
78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11,
7202, 7241, 7262, and 7263, and 18 U.S.C. 1350.
Description: The Commission amended its rule concerning
recordkeeping requirements for registered transfer agents. The
amendments made it clear that registered transfer agents may use
electronic, microfilm, and microfiche media as a substitute for hard
copy records, including cancelled stock certificates, for purposes of
complying with the Commission's transfer agent recordkeeping rules and
that a third party on behalf of a registered transfer agent may place
into escrow the required software information.
Prior Commission Determination Under 5 U.S.C. 610: A Final
Regulatory Flexibility Analysis was prepared in accordance with Section
604 of the Regulatory Flexibility Act in conjunction with Release No.
34-48949 (December 18, 2003). The Commission received comment letters
in response to the Initial Regulatory Flexibility Analysis in the
proposing release, Release No. 34-48036 (June 16, 2003), that did not
address the issues presented in the proposing release.
By the Commission.
Dated: December 19, 2014.
Brent J. Fields,
Secretary.
[FR Doc. 2014-30265 Filed 12-24-14; 8:45 am]
BILLING CODE 8011-01-P