[Federal Register Volume 64, Number 123 (Monday, June 28, 1999)]
[Unknown Section]
[Pages 34539-34540]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16316]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 200

[Release No. IA-1804]


Delegation of Authority to Cancel Registration of Certain 
Investment Advisers

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 its authority to the Director of the 
Division of Investment Management to cancel the registration of any 
investment adviser that is not eligible for Commission registration. 
This amendment updates the staff's delegated authority to reflect 
recent amendments to the Investment Advisers Act of 1940, and is 
intended to conserve Commission resources by permitting the staff to 
cancel, when appropriate, the registration of investment advisers that 
are not eligible to be registered with the Commission.

EFFECTIVE DATE: The rule will become effective June 28, 1999.

FOR FURTHER INFORMATION CONTACT: J. David Fielder, Senior Counsel, at 
(202) 942-0530, Task Force on Investment Adviser Regulation, Division 
of Investment Management, Securities and Exchange Commission, 450 Fifth 
Street, N.W., Washington, D.C. 20549-0506.

SUPPLEMENTARY INFORMATION: The National Securities Market Improvement 
Act of 1996 (``Improvement Act'') \1\ amended the Investment Advisers 
Act of 1940 (``Advisers Act'') to reallocate federal and state 
regulatory responsibility for investment advisers. Under section 203A 
of the Advisers Act, the Commission has regulatory responsibility for 
advisers with at least $25 million of assets under management and 
advisers to a registered investment company.\2\ Section 203A prohibits 
all other advisers from registering with the Commission.\3\
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    \1\ Pub. L. No. 104-290, 110 Stat. 3416 (1996) (codified in 
scattered sections of the United States Code).
    \2\ 15 U.S.C. 80b-3a(a).
    \3\ 15 U.S.C. 80b-3a(a). The Commission has adopted a rule that 
exempts certain types of advisers from this prohibition. 17 CFR 
275.203A-2.
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    Section 203(h) of the Advisers Act authorizes us to cancel the 
registration of certain investment advisers.\4\ Before enactment of the 
Improvement Act, we had authority to cancel the registration

[[Page 34540]]

of advisers that were no longer in business, and we delegated this 
authority to the staff.\5\ The Improvement Act amended Section 203(h) 
and gave us additional authority to cancel the registration of 
investment advisers that are ``prohibited from registering as an 
investment adviser under section 203A. * * *'' \6\ Today, we are 
delegating this authority to the staff as well.
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    \4\ 15 U.S.C. 80b-3(h).
    \5\ We have delegated this authority to the Division of 
Investment Management (17 CFR 200.30-5(e)(2)), the Office of Filings 
and Information Services (17 CFR 200.30-11(b)(2)(i)), and the Office 
of Compliance, Inspections and Examinations (17 CFR 200.30-
18(h)(1)).
    \6\ 15 U.S.C. 80b-3(h).
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    We expect the staff periodically to identify advisers whose 
registration should be canceled because they are not eligible for 
Commission registration. The staff may submit matters to the Commission 
for consideration as it deems appropriate. Before the staff cancels the 
registration of any adviser, the staff will notify the adviser and 
provide an opportunity to dispute the basis for the proposed 
cancellation, and any investment adviser whose registration is canceled 
by the staff may appeal that decision directly to the Commission.\7\
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    \7\ 17 CFR 201.430.
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    The Commission finds, in accordance with Section 553(b)(3)(A) of 
the Administrative Procedure Act, that this amendment relates solely to 
agency organization, procedure, or practice, and does not relate to a 
substantive rule.\8\ Accordingly, notice and opportunity for public 
comment are unnecessary, and publication of the amendment 30 days 
before its effective date is also unnecessary.
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    \8\ 5 U.S.C. 553(b)(3)(A).
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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:

PART 200--ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND 
REQUESTS

    1. The authority citation for part 200 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77s, 78d-1, 78d-2, 78w, 78ll(d), 78mm, 79t, 
77sss, 80a-37, 80b-11, unless otherwise noted.
* * * * *
    2. Section 200.30-5 is amended by revising paragraph (e)(2) to read 
as follows:


Sec. 200.30-5  Delegation of authority to Director of Division of 
Investment Management.

* * * * *
    (e) * * *
    (2) Pursuant to section 203(h) of the Act (15 U.S.C. 80b-3(h)), to 
authorize the issuance of orders canceling registration of investment 
advisers, or applications for registration, if such investment advisers 
or applicants for registration are no longer in existence, not engaged 
in business as investment advisers, or are prohibited from registering 
as investment advisers under Section 203A of the Act (15 U.S.C. 80b-
3a).
* * * * *
    Dated: June 22, 1999.

    By the Commission.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-16316 Filed 6-25-99; 8:45 am]
BILLING CODE 8010-01-P