[Federal Register Volume 67, Number 87 (Monday, May 6, 2002)]
[Rules and Regulations]
[Page 30326]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11099]



[[Page 30326]]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 200

[Release No. 34-45848]


Delegation of Authority to the Secretary of the Commission

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 authority to the Secretary of the 
Commission to enter orders instituting previously authorized 
administrative proceedings based on the entry of an injunction or a 
criminal conviction, and to issue findings and orders in such cases 
where a respondent consents to a bar from association. This delegation 
is intended to conserve Commission resources as well as expedite the 
institution of proceedings in which the Commission considers whether to 
impose remedial measures on certain persons who are subject to 
injunctions or who have been criminally convicted.

EFFECTIVE DATE: May 6, 2002.

FOR FURTHER INFORMATION CONTACT: Deborah Levine, Office of the General 
Counsel, at (202) 942-0890, Securities and Exchange Commission, 450 
Fifth Street, NW, Washington, DC 20549-0606.

SUPPLEMENTARY INFORMATION: The Commission today is amending its rules 
governing delegation of authority to the Office of the Secretary.\1\
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    \1\ 17 CFR 200.30-7.
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    The Securities Exchange Act of 1934 \2\ (``Exchange Act'') and the 
Investment Advisers Act of 1940 \3\ (``Advisers Act'') authorize the 
Commission to institute administrative proceedings against certain 
persons \4\ based upon, among other things, a court's entry of an 
injunction against certain conduct or violations of the federal 
securities laws, or convictions for certain crimes.\5\ Frequently, when 
the Commission authorizes the filing of an injunctive action in 
district court against a regulated person, it also authorizes the 
future institution of an administrative proceeding against that person 
based on the anticipated entry of an injunction at the conclusion of 
the district court litigation or based on an anticipated criminal 
conviction. The Commission is amending its rules to delegate to the 
Secretary the authority to issue orders instituting such administrative 
proceedings where the Commission has previously authorized the 
proceeding based on the anticipated entry of an injunction or on a 
criminal conviction. The delegation also includes the authority to 
issue settled orders making findings and imposing sanctions where the 
respondent consents to a bar from association `` i.e., the maximum 
relief available in such a case. Nevertheless, the staff may submit 
matters to the Commission for consideration as it deems appropriate.
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    \2\ 15 U.S.C. 78a et seq.
    \3\ U.S.C. 80b-1 et seq.
    \4\ The Commission is authorized to bring administrative 
proceedings based on the entry of an injunction or a criminal 
conviction against the following persons: brokers or dealers 
pursuant to Section 15(b)(4) of the Exchange Act; persons associated 
with brokers or dealers, or persons participating in an offering of 
a penny stock pursuant to Section 15(b)(6) of the Exchange Act; 
municipal securities dealers and persons associated with municipal 
securities dealers pursuant to Section 15B(c) of the Exchange Act; 
government securities brokers or dealers and persons associated with 
government securities brokers or dealers pursuant to Section 15C(c) 
of the Exchange Act; transfer agents and persons associated with 
transfer agents pursuant to Section 17A(c) of the Exchange Act; and 
investment advisers and persons associated with investment advisers 
pursuant to Section 203(e) or (f) of the Advisers Act.
    Other provisions of the securities laws, such as Section 19(h) 
of the Exchange Act, authorize administrative proceedings against 
other categories of persons; however, these other provisions do not 
permit administrative proceedings to be based on the entry of an 
injunction or a criminal conviction.
    \5\ In this context, a criminal conviction ``includes a verdict, 
judgment, or plea of guilty, or a finding of guilt on a plea of nolo 
contendere, if such verdict, judgment, plea, or finding has not been 
reversed, set aside, or withdrawn, whether or not sentence has been 
imposed.'' Section 202(a)(6) of the Advisers Act.
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Administrative Law Matters

    The Commission finds, in accordance with Section 553(b)(A) of the 
Administrative Procedure Act, 5 U.S.C. 553(b)(A), that this amendment 
relates solely to agency organization, procedure, or practice. 
Accordingly, notice and opportunity for public comment, as well as 
publication 30 days before its effective date, are unnecessary. Because 
notice and comment are not required for this final rule, a regulatory 
flexibility analysis is not required under the Regulatory Flexibility 
Act.\6\
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    \6\ See 5 U.S.C. 603.
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    The rule does not contain any collection of information 
requirements as defined by the Paperwork Reduction Act of 1995 as 
amended.\7\ The rule will not impose any costs on the public.
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    \7\ 44 U.S.C. 3501 et seq.
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List of Subjects in 17 CFR Part 200

    Administrative practice and procedure, Authority delegations 
(Government agencies).

Text of the 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, Subpart A, 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. The authority citation following Sec. 200.30-7 is removed.

    3. Section 200.30-7 is amended by adding paragraph (a)(12) to read 
as follows:


Sec. 200.30-7  Delegation of authority to Secretary of the Commission.

* * * * *
    (a) * * *
    (12) To issue orders instituting previously authorized 
administrative proceedings pursuant to sections 15(b)(4) or (6), 15B, 
15C, or 17A of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(4) 
or (6), 78o-4, 78o-5, or 78q-1), and section 203(e) or (f) of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-3(e) or (f)), based on 
the entry of an injunction or a criminal conviction, and to issue 
findings and orders in such cases where a respondent consents to a bar 
from association.
* * * * *

    Dated: April 30, 2002.

    By the Commission.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-11099 Filed 5-3-02; 8:45 am]
BILLING CODE 8010-01-U