[Federal Register Volume 64, Number 236 (Thursday, December 9, 1999)]
[Notices]
[Pages 69051-69054]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31778]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. PA-28; File No. S7-27-99]


Privacy Act of 1974: Notice of Modifications to a System of 
Records and the Establishment of a New System of Records

AGENCY: Securities and Exchange Commission.

ACTION: Notice of intended modifications to an existing system of 
records and the establishment of a new system of records.

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SUMMARY: The Securities and Exchange Commission proposes to modify an 
existing system of records by excluding records submitted by broker-
dealers and to add a new system of records consisting of these broker-
dealer records. This proposal reflects the assumption of certain 
registration functions, including maintenance of broker-dealer 
registration records in the new Internet-based Central Registration 
Depository (CRD), by the National Association of Securities Dealers, 
Inc. (NASD).

    Also, the Commission is proposing to make major changes in its 
``Pay and Leave System (SEC-15).'' The changes are designed to reflect 
the transfer of some of its payroll functions to the National Business 
Center of the U.S. Department of the Interior (DOI). As a result of the 
transfer, certain SEC-15 records would become a part of DOI's 
integrated, automated payroll system.

DATES: Comments must be received by January 10, 2000. The proposed 
changes and the new system of records will take effect January 18, 
2000, unless the SEC receives comments that would require a different 
determination.

ADDRESSES: Please send three copies of your comments to Jonathan G. 
Katz, Secretary, SEC, 450 Fifth Street, NW, Washington, DC 20549-0609. 
You may also send your comments electronically to the following 
electronic address: [email protected]. All comments should refer to 
File No. S7-27-99 and, if sent electronically, should include this file 
number on the subject line. Comment letters will be available for 
public inspection and copying at our Public Reference Room, 450 Fifth 
Street, NW, Washington, DC 20549. If sent electronically, comment 
letters will also be available on our Web site (http://www.sec.gov).

FOR FURTHER INFORMATION CONTACT: Betty A. Lopez, Privacy Act Officer, 
(202) 942-4320, Office of Filings and Information Services, SEC, 
Operations Center, 6432 General Green Way, Alexandria, VA 22312-2413.

SUPPLEMENTARY INFORMATION: The Commission gives notice of major changes 
to ``Applications for Registration/Exemption under the Securities 
Exchange Act of 1934, the Investment Advisers Act of 1940, and the 
Investment Company Act of 1940 (SEC-2),'' which results in the 
establishment of a new system--``Broker-Dealer Records (SEC-49).'' It 
also gives notice of major changes to ``Pay and Leave System (SEC-
15).''

SEC-2

    Currently, the Commission treats paper and microfiche copies of 
applications for registration by broker-dealers (Form BD) and 
investment advisers (Form ADV) and their related amendments, withdrawal 
notices, and other forms as agency records subject to the Privacy Act. 
Accordingly, the Commission has published and periodically updated a 
system of records notice for these records, designated as SEC-2. These 
records contain names of individuals and information about those 
individuals, such as disciplinary information. However, the current 
Privacy Act notice does not address the electronic filing of such forms 
and new ways of maintaining and retrieving them through any SEC or non-
SEC system. The Commission is therefore proposing to transfer broker-
dealer records, whether in paper, microfiche, or electronic format, 
from SEC-2 to the ``Broker-Dealer Records'' (SEC-49), a new Privacy Act 
records system. In addition, the Commission is proposing to restate the 
routine uses in plain English and to delete outdated or redundant 
uses.\1\
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    \1\ See 5 U.S.C. 552a(b), Conditions of Disclosure.
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SEC-15

    Moreover, the Commission gives notice of major changes to its ``Pay 
and Leave System (SEC-15).'' On June 20, 1999, the Commission 
transferred some of its payroll functions to DOI. This transfer 
required the integration of its notices of personnel action and other 
pay-related records with the DOI's automated payroll and personnel 
system. The Commission, however, would continue to maintain its 
electronic payroll files, official personnel files, time and attendance 
reports, and service history files pertaining to SEC employees. To 
reflect this development and restate the routine uses of SEC-15 records 
in plain English, the Commission is proposing major changes to SEC-15.

SEC-49

    On April 30, 1999, the Commission adopted amendments to Form BDW 
and Rules 15b3-1, 15b6-1, 15Ba2-2, 15Bc3-1, 15Ca1-1, and 15Cc1-1 under 
the Securities Exchange Act of 1934 (Exchange Act).\2\ On July 2, 1999, 
the Commission adopted amendments to Form BD and Rules 15b3-1, 15Ba2-2, 
and 15Ca2-1 under the Exchange Act.\3\ These amendments require broker-
dealers to submit all Form BD amendments and Form BDW withrawal 
requests electronically to Web CRD. As a result of these amendments, 
the NASD, which is responsible for the operation and maintenance of Web 
CRD, will be the custodian of broker-dealer registration records filed 
on or after August 16, 1999. As custodian, the NASD must maintain the 
records in accordance with federal record-keeping requirements.\4\ 
Under 5 U.S.C. 552a(m), the NASD has entered into a Memorandum of 
Understanding with

[[Page 69052]]

the Commission, under which the NASD also assumes, among other things, 
all responsibilities for compliance with the Privacy Act with respect 
to those records.
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    \2\ Securities Exchange Act Release No. 41356 (April 30, 1999), 
64 FR 25143 (May 10, 1999).
    \3\ Securities Exchange Act Release No. 41394 (July 2, 1999), 64 
FR 37586 (July 12, 1999).
    \4\ 36 CFR 1220, Federal Records--General, 36 CFR 1222, Creation 
and Maintenance of Federal Records, and 36 CFR 1234, Electronic 
Records Management.
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    All broker-dealer records on paper and microfiche, received by the 
Commission before August 16, 1999, will remain in its custody and 
control and their routine uses are unchanged by the development of the 
Web CRD.
    As 5 U.S.C. 552a(r) requires, the Commission has submitted its 
reports of the new and the altered systems of records to the Congress 
and the Office of Management and Budget. This complies with Appendix I 
to OMB Circular A-130, ``Federal Agency Responsibilities for 
Maintaining Records About Individuals,'' as amended on February 20, 
1996.\5\
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    \5\ 61 FR 6428, 6435-39.
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    Accordingly, the Commission proposes to amend SEC-2 and SEC-15 and 
establish SEC-49, to read as follows:
SEC-2

SYSTEM NAME:
    Applications for Registration or Exemption under the Investment 
Advisers Act of 1940 and the Investment Company Act of 1940.

SYSTEM LOCATION:
    SEC, 450 Fifth Street, NW, Washington, DC 20549.

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    Officers, directors, and other individuals related to investment 
advisers or investment companies.

CATEGORIES OF RECORDS IN THE SYSTEM:
    Name, date of birth, address, telephone numbers, social security 
number, education, past and present employment, disciplinary history, 
business relationships, and similar information.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    15 U.S.C. 77f, 77g, 77h, 77j, 78l, 78m, 78n, 78o(d), 78p, 79e, 80a-
6, 80a-8, 80b-3, and 80b-6a.

PURPOSES:
    To help the SEC staff process applications for registration or 
exemption and related forms under the Investment Advisers Act of 1940 
and the Investment Company Act of 1940 and implement the Federal 
securities laws and rules.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES 
OF USERS AND THE PURPOSES OF SUCH USES:
    In addition to the conditions of disclosure under 5 U.S.C. 552a(b), 
the SEC staff may provide these records to:
    (1) Any member of the general public upon request;
    (2) Any Federal, state, local, or foreign government authority or 
securities self-regulatory organization that is investigating a 
violation or potential violation of a statute, rule, regulation, or 
order;
    (3) Any Federal, state, local, or foreign bar association or 
similar licensing authority responsible for possible disciplinary 
action;
    (4) Any Federal, state, or local government or governmental 
authority that is deciding to hire or retain an individual, sign a 
contract, or issue a license, grant, or benefit;
    (5) Any individual or entity appointed by a court of competent 
jurisdiction or agreed upon by the parties to a pending court action or 
administrative proceeding alleging a violation of the Federal 
securities laws or rules; and
    (6) Any contractor that performs, on the SEC's behalf, services 
requiring the use of these records.

POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING, 
AND DISPOSING OF RECORDS IN THE SYSTEM:
STORAGE:
    These records are maintained in paper, microfiche, or electronic 
format.

RETRIEVABILITY:
    These records are retrievable by the name of, or a file number 
assigned to, the registrant. Individual name access to these records is 
available through the SEC's Name-Relationship Search Index.

SAFEGUARDS:
    Non-computer records are maintained in a central records facility 
that only authorized individuals may access. The facility is locked, 
with security cameras and 24-hour security guards. Computer records, 
which are subject to data integrity controls, require passcodes for 
database access.

RETENTION AND DISPOSAL:
    These records are transferred to the Federal Records Center 
periodically for storage. They are controlled by file number and 
retained under 17 CFR 200.80f. Permanent files are sent to the National 
Archives and Records Administration after a specified storage time at 
the Federal Records Center.

SYSTEM MANAGER(S) AND ADDRESS:
    Records Officer, SEC, Operations Center, 6432 General Green Way, 
Alexandria, VA 22312-2413.

NOTIFICATION PROCEDURE:
    Requests to determine whether this system of records contains a 
record pertaining to the requesting individual should be sent to the 
Privacy Act Officer, SEC Operations Center, 6432 General Green Way, 
Alexandria, VA 22312-2413.

RECORDS ACCESS PROCEDURES:
    Persons wishing to access or contest these records should write the 
Privacy Act Officer, SEC Operations Center, 6432 General Green Way, 
Alexandria, VA 22312-2413.

CONTESTING RECORD PROCEDURES:
    See Records Access Procedures, above.

RECORD SOURCE CATEGORIES:
    Applications for Registration or Exemption and related forms filed 
with the SEC under the Investment Advisers Act of 1940 and the 
Investment Company Act of 1940.

EXEMPTIONS CLAIMED FOR THE SYSTEM:
    None.
SEC-15

SYSTEM NAME:
    Pay and Leave System.

SYSTEM LOCATIONS:
    (1) Payroll files, official personnel files, time and attendance 
reports, and service history files: SEC, Operations Center, 6432 
General Green Way, Alexandria, VA 22312-2413;
    (2) Notices of personnel action and other pay-related records: 
Department of the Interior, National Business Center, Payroll 
Operations Division, Mail Stop D-260, 7301 West Mansfield Avenue, 
Lakewood, CO 80235-2230; and
    (3) Retired personnel files: National Archives and Records 
Administration, National Personnel Records Center (Civilian Personnel 
Records Center), 111 Winnebago Street, St. Louis, MO 63118.

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    Past and present SEC employees.

CATEGORIES OF RECORDS IN THE SYSTEM:
    Payroll files, time and attendance reports, official personnel 
files, and service history files.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    5 U.S.C. app. 21-89.

PURPOSE(S):
    To locate SEC employees and determine such matters as their period 
of service, type of leave, qualifications, benefits, and pay.

[[Page 69053]]

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES 
OF USERS AND THE PURPOSES OF SUCH USES:
    In addition to the conditions of disclosure under 5 U.S.C. 552a(b), 
the SEC staff may provide these records to:
    (1) The National Business Center of the U.S. Department of the 
Interior;
    (2) Any Federal, state, or local government compiling tax 
withholding, retirement contributions, or allotments to charities, 
labor unions, and other authorized recipients;
    (3) Any Federal governmental authority or its agents investigating 
(a) a violation or potential violation of a statute, rule, regulation, 
or order, or (b) an employee's grievance or complaint;
    (4) Any member of the public for employment verification at an 
employee's written request;
    (5) Any judgment creditor for the purpose of garnishment;
    (6) Any arbitrator under a negotiated labor agreement;
    (7) The General Accounting Office, the Office of Management and 
Budget, and other Federal agencies to support payments of salaries and 
benefits to SEC employees; and
    (8) The Office of Child Support Enforcement, Administration for 
Children and Families, Department of Health and Human Services, the 
Federal Parent Locator System and the Federal Tax Offset System to (a) 
locate individuals, (b) identify income sources, (c) establish 
paternity, (d) verify social security numbers or employment, (e) issue, 
modify, or enforce orders of support, or (f) administer the Federal 
Earned Income Tax Credit Program.

STORAGE:
    Payroll files, official personnel files, and time and attendance 
reports are kept in paper or electronic format.

RETRIEVABILITY:
    Official personnel files and payroll files are retrievable by an 
employee's name or social security number.

SAFEGUARDS:
    Only authorized employees of the SEC and other Federal government 
agencies may access these records.

RETENTION AND DISPOSAL:
    These records are maintained and disposed of under General Records 
Schedule Nos. 2 and 20 of the General Services Administration.

SYSTEM MANAGER(S) AND ADDRESS:
    Office of Administrative and Personnel Management, SEC, Operations 
Center, 6432 General Green Way, Alexandria, VA 22312-2413.

NOTIFICATION PROCEDURE:
    Requests to determine whether this system of records contains a 
record pertaining to the requesting individual should be sent to the 
Privacy Act Officer, SEC, Operations Center, 6432 General Green Way, 
Alexandria, VA 22312-2413.

RECORDS ACCESS PROCEDURES:
    Persons wishing to access or contest these records should write the 
Privacy Act Officer, SEC, Operations Center, 6432 General Green Way, 
Alexandria, VA 22312-2413.

CONTESTING RECORD PROCEDURES:
    See Record Access Procedures, above.

RECORD SOURCE CATEGORIES:
    Notices of personnel action, electronic time and attendance 
records, withholding certificates, and other pay-related records 
prepared by employees or the Office of Administrative and Personnel 
Management.

EXEMPTIONS CLAIMED FOR THE SYSTEM:
    None.
SEC-49

SYSTEM NAME:
    Broker-Dealer Records.

SYSTEM LOCATION:
    Records filed before August 16, 1999: SEC, 450 Fifth Street, NW, 
Washington, DC 20549; and
    Records filed on or after August 16, 1999: NASD, 1390 Piccard 
Drive, Rockville, MD 20850.

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    Registrants and officers, directors, principal shareholders, or 
other individuals related to them.

CATEGORIES OF RECORDS IN THE SYSTEM:
    Name, address, telephone number, social security number, education, 
past and present employment, disciplinary history, business 
relationships, and similar information.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    15 U.S.C. 78o.

PURPOSE(S):
    To help the SEC staff process applications for registration or 
exemption and related forms under the Securities Exchange Act of 1934 
and implement the Federal securities laws and rules.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES 
OF USERS AND THE PURPOSES OF SUCH USES:
    In addition to the conditions of disclosure under 5 U.S.C. 552a(b), 
the SEC staff may provide these records to:
    (1) Any member of the general public upon request;
    (2) Any Federal, state, local, or foreign government authority or 
securities self-regulatory organization that is investigating a 
violation or potential violation of a statute, rule, regulation, or 
order;
    (3) Any Federal, state, local, or foreign bar association or 
similar licensing authority responsible for possible disciplinary 
action;
    (4) Any Federal, state, or local government or governmental 
authority that is deciding to hire or retain an individual, sign a 
contract, or issue a license, grant, or benefit;
    (5) Any individual or entity appointed by a court of competent 
jurisdiction or agreed upon by the parties to a pending court action or 
administrative proceeding alleging a violation of the Federal 
securities laws or rules; and
    (6) Any contractor that performs, on the SEC's behalf, services 
requiring the use of these records.

POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING, 
AND DISPOSING OF RECORDS IN THE SYSTEM:
STORAGE:
    Records filed before August 16, 1999 in the SEC's custody are 
maintained in paper, microfiche, or electronic formats. Records filed 
on or after August 16, 1999 in the NASD's custody are maintained in 
paper or electronic format (Web CRD).

RETRIEVABILITY:
    These records are retrievable by the name of, or a file number 
assigned to, the registrant. Individual name access to these records is 
available through the SEC's Name-Relationship Search Index.

SAFEGUARDS:
    Non-computer records in the SEC's custody are maintained in a 
central records facility that only authorized individuals may access. 
The facility is locked, with security cameras and a 24-hour security 
guard. Computer records, which are subject to data integrity controls, 
require passcodes for database access.

RETENTION AND DISPOSAL:
    The records in the SEC's custody are transferred to the Federal 
Records Center periodically for storage. They are controlled by file 
number and retained under 17 CFR 200.80f. Permanent files are sent to 
the National Archives and Records Administration after a specified 
storage time at the Federal Records Center. Nine years from their 
receipt by the NASD, the records in the NASD's custody are transferred 
to the SEC for proper disposition.

[[Page 69054]]

SYSTEM MANAGERS AND ADDRESSES:
    Records filed before August 16, 1999--Records Officer, SEC 
Operations Center, 6432 General Green Way, Alexandria, VA 22312-2413.
    Records filed on or after August 16, 1999--NASD, 1390 Piccard 
Drive, Rockville, MD 20850.

NOTIFICATION PROCEDURE:
    Requests to determine whether this system of records contains a 
record pertaining to the requesting individual should be sent to the 
Privacy Act Officer, SEC Operations Center, 6432 General Green Way, 
Alexandria, VA 22312-2413.

RECORDS ACCESS PROCEDURES:
    Persons wishing to access or contest these records should write the 
Privacy Act Officer, SEC Operations Center, 6432 General Green Way, 
Alexandria, VA 22312-2413.

CONTESTING RECORD PROCEDURES:
    See Records Access Procedures, above.

RECORD SOURCE CATEGORIES:
    Applications for registration or exemption and related forms filed 
with the SEC under the Securities Exchange Act of 1934.

EXEMPTIONS CLAIMED FOR THE SYSTEM:
    None.

    Dated: December 2, 1999.

    By the Commission.
Jonathan G. Katz,
Secretary.

[FR Doc. 99-31778 Filed 12-8-99; 8:45 am]
BILLING CODE 8010-01-U