[Federal Register Volume 70, Number 81 (Thursday, April 28, 2005)]
[Proposed Rules]
[Pages 22224-22228]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-8484]



[[Page 22223]]

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Part III





Securities and Exchange Commission





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17 CFR Part 201



Proposed Amendments to the Rules of Practice and Related Provisions; 
Proposed Rule

  Federal Register / Vol. 70, No. 81 / Thursday, April 28, 2005 / 
Proposed Rules  

[[Page 22224]]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 201

[Release No. 34-51595; File No. S7-05-05]


Proposed Amendments to the Rules of Practice and Related 
Provisions

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
proposing for public comment amendments to its Rules of Practice and 
related provisions. The Commission is proposing the amendments as a 
result of its experience with these rules and to correct typographical 
errors and change certain citations. The proposed amendments are 
intended to enhance the transparency and facilitate parties' 
understanding of the rules and to make practice under the rules easier 
and more efficient.

DATES: Comments should be received on or before May 31, 2005.

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/proposed.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number S7-05-05 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 in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number S7-05-05. This file 
number should be included on the subject line if e-mail 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/proposed.shtml). Comments are also available for public inspection and 
copying in the Commission's Public Reference Room, 450 Fifth Street, 
NW., Washington, DC 20549. All comments received will be posted without 
change; we do not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly.

FOR FURTHER INFORMATION CONTACT: Diane V. White, Office of the General 
Counsel, (202) 942-0950, Securities and Exchange Commission, 450 5th 
Street, NW., Washington, DC 20549-0208.

SUPPLEMENTARY INFORMATION: The Commission proposes to amend its Rules 
of Practice and related provisions as a result of the Commission's 
experience with its existing rules and in order to correct references 
and change certain citations.\1\ The majority of these proposals are 
technical and not substantive.
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    \1\ The Commission may determine to delegate certain of its 
authority under these proposed rules if it subsequently adopts them.
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I. Discussion

    A. Rule 141(a)(2)(ii) now generally authorizes service on other 
corporations or entities by delivering a copy of the order instituting 
proceedings (``OIP'') to an officer, managing or general agent, or 
authorized agent by personal service or by mail.\2\ The Commission has 
observed that, in proceedings instituted under Section 12(j) of the 
Securities Exchange Act of 1934, 15 U.S.C. 78l(j), to revoke or suspend 
the registration of a class of securities for failure to make timely 
periodic filings, it sometimes has been difficult to serve the issuer 
of the class of securities. An issuer that is delinquent in its filings 
often does not keep current with the Commission the name of a valid 
representative. In certain instances, the Commission's staff has sought 
to accomplish service on such an issuer by serving multiple copies of 
the OIP on various persons, such as the issuer's officers or 
directors.\3\ The Commission proposes to amend Rule 141(a)(2)(ii) to 
authorize service on an issuer at the most recent address set forth in 
its most recent filing with the Commission, together with obtaining 
confirmation of attempted delivery.
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    \2\ Rule 141(a)(2)(ii) states that notice to a corporation or 
other entity of a proceeding ``shall be made'' by ``delivering a 
copy of the order instituting proceedings to an officer, managing or 
general agent, or any other agent authorized by appointment or by 
law to receive such notice, by any method specified in paragraph 
(a)(2)(i) of this rule.''
    Rule 141(a)(2)(i) authorizes delivery by ``handing a copy of the 
order to the individual; or leaving a copy at the individual's 
office with a clerk or other person in charge thereof; or leaving a 
copy at the individual's dwelling house or usual place of abode with 
some person of suitable age and discretion then residing therein; or 
sending a copy of the order addressed to the individual by U.S. 
Postal Service certified, registered or Express Mail and obtaining 
confirmation of receipt; or giving confirmed telegraphic notice.''
    \3\ See, e.g., Alcohol Sensors Int'l, Ltd., Exchange Act Rel. 
No. 50150 (Aug. 5, 2004), 83 SEC Docket 1748, 1749 n.1 (stating that 
more than 430 copies of the OIP were served in order to accomplish 
service on seventeen respondents in a Section 12(j) proceeding).
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    The Commission also proposes to add Rule 141(a)(2)(vi) to authorize 
service on persons registered with self-regulatory organizations at the 
most recent address shown in the Central Registration Depository, 
together with obtaining confirmation of attempted delivery. We request 
comment as to whether this method will provide adequate notice of a 
proceeding. We recognize that the Central Registration Depository 
requires only that addresses be kept current for two years after a 
person ceases to be associated with a member of a self-regulatory 
organization, and we request comment as to whether the rule should 
refer explicitly to such a two-year period.
    B. Currently, Rule 430(a) provides that any person aggrieved by an 
action made by authority delegated in Sections 200.30-1 through 200.30-
8 or Sections 200.30-11 through 200.30-18 may seek review of the action 
pursuant to Rule 430(b). Rule 430(b) provides that Commission review is 
to be sought by filing a written notice of intention to petition for 
review within five days ``after actual notice to the party of the 
action or service of notice pursuant to Sec.  201.141(b), whichever is 
earlier.'' While the current rule permits appeals by any aggrieved 
person, an aggrieved person who is not a party may not receive actual 
notice or learn of service of notice promptly after the action. 
Nonetheless, it is important that a deadline for the filing of a notice 
of intention to petition for review be established, so that people may 
know when an action is beyond challenge. The proposed amendment would 
therefore provide that both parties and aggrieved persons may seek 
Commission review of the action by filing a notice of intention to 
petition for review within five days after actual notice of the action 
to the party or person, or 15 days after publication of the notice of 
action in the Federal Register, or five days after service of notice of 
the action pursuant to Sec.  201.141(b), whichever is the earliest. The 
Commission requests comment on whether this form of publication would 
provide adequate notice, or whether another form of publication should 
be used to supplement the Federal Register. The Commission further 
seeks comment on whether posting of a notice of action pursuant to 
delegated authority on the Commission's Web site would aid in giving 
notice to persons who might be aggrieved by such action. The Commission 
also seeks comment as to whether 15 days after publication

[[Page 22225]]

allows parties and aggrieved persons sufficient time to file a 
notice.\4\
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    \4\ See 44 U.S.C. 1508 (stating that time between publication of 
notice in Federal Register and date fixed in notice for hearing or 
termination of opportunity to be heard should generally be not less 
than fifteen days unless otherwise specifically prescribed by Act of 
Congress).
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    C. Currently, Rule 55, which governs the conduct of Equal Access to 
Justice Act (``EAJA'') proceedings before an administrative law judge, 
authorizes the law judge considering an application for an award of 
fees and expenses under the Equal Access to Justice Act, 5 U.S.C. Sec.  
504, to order all proceedings that are otherwise available under Rule 
8(d) of the Rules of Practice. Former Rule 8(d) authorized the conduct 
of prehearing conferences and briefings. When the Commission 
comprehensively revised and renumbered its Rules of Practice in 1995, 
former Rule 8(d) was incorporated into Rules 221 and 222(a).\5\ 
However, the reference to Rule 8(d) contained in EAJA Rule 55 was not 
changed at that time. The proposed amendment would replace the 
reference to Rule 8(d) with a reference to Rules 221 and 222(a).
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    \5\ See Exchange Act Rel. No. 35833 (June 23, 1995), 59 SEC 
Docket 1546, 1631 tbl. III.
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    D. Current Rule 102(e)(3)(iii) provides that Commission review of a 
hearing officer's initial decision on a petition to lift a temporary 
suspension of a person from appearing and practicing before the 
Commission will be governed by the time limits set forth in Sec.  
201.531. The proposed amendment would correct the reference, by 
referring to Sec.  201.540, which governs the appeal and Commission 
review of certain initial decisions.
    E. Currently, Rule 111(h) provides no time limit within which a law 
judge is required to rule upon a motion to correct a manifest error of 
fact in an initial decision. The proposed amendment would make clear 
that such a ruling must be made within 20 days of the filing of any 
brief in opposition. Any brief in opposition must be filed within five 
days after service of the motion.
    F. Current Rule 152(d) provides that an original and three copies 
of all papers shall be filed. The proposed amendment would make clear 
that if filing is made by facsimile pursuant to Rule 151, the filer 
must transmit only one non-facsimile original with a manual signature 
and does not need to transmit additional non-facsimile copies.
    G. Currently, Rule 154(c) and Rule 250(c) provide page limitations 
for, respectively, motions in general and motions for summary 
disposition. Rule 450(c), however, now sets word-count limitations, 
instead of page limitations, for briefs filed with the Commission. The 
proposed amendment to Rule 154(c) would substitute a limitation for 
motions of 7,000 words, exclusive of any table of contents, table of 
authority, or addendum of applicable cases, legislative provisions, or 
exhibits. Rule 470(b), which currently requires motions for 
reconsideration to comply with the page length limitation in Rule 
154(c), would be amended to refer to proposed Rule 154(c)'s word 
limitation.
    The proposed amendment to Rule 250(c) would set a limitation of 
9,800 words for a motion for summary disposition, supporting memorandum 
of points and authorities, but not including any declarations, 
affidavits or attachments. Motions for summary dispositions are often 
made in cases where a respondent has been criminally convicted or an 
injunction has been entered and the conviction or injunction provides 
the basis for an administrative order against the respondent. In such 
cases, documents establishing the conviction or injunction must be 
included as exhibits to the motion; these documents alone can total 
more than the entire word limitation allotted to the motion. The 
proposed amendment would exclude such attachments from the word-count 
restriction.
    H. Current Rule 201(b) provides that by order of the Commission, 
any proceeding may be severed with respect to some or all parties. The 
proposed amendment would allow severance with respect to ``one or 
more'' parties, making clear that severance is available as to a single 
party, under appropriate circumstances.
    I. Current Rule 210(a)(2) contains a reference to Sec.  201.612. 
Section 612 was renumbered as Sec.  201.1103, effective April 19, 2004. 
The proposed amendment would change the reference accordingly.\6\
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    \6\ Language was inadvertently deleted from Rule 210(b) in an 
earlier revision of the Rules of Practice. This language is now 
being reinstated.
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    J. Current Rule 411(c) refers to ``any brief in opposition to a 
petition for review permitted pursuant to Sec.  201.410(d).'' The Rules 
of Practice no longer provide for briefs in opposition to a petition 
for review, and Section 410(d) was removed and reserved effective April 
19, 2004. The proposed amendment would delete the reference.
    K. Currently, Rule 601(a) provides that funds due pursuant to an 
order by a hearing officer shall be paid on the first day after the 
order becomes final pursuant to Rule 360. Under Rule 360(d)(2) as 
revised, effective April 19, 2004, an initial decision no longer 
becomes final automatically. That rule now provides that the Commission 
will issue an order stating that a decision has become final. Rule 
360(d)(2) further provides for the order of finality to state the date 
on which sanctions, if any, take effect. Proposed Rule 601would clarify 
that funds due pursuant to an order by a hearing officer are to be paid 
in accordance with the order of finality.
    L. Current Rule 900(b) requires the Chief Administrative Law Judge 
to apprise the Commission specifically if a proceeding assigned to an 
administrative law judge has not been concluded ``within 30 days of the 
guidelines established in paragraph (a) of this section.'' Paragraph 
(a) no longer contains guidelines relevant to the timely conclusion of 
proceedings before law judges; these guidelines are now found in Sec.  
201.360(a)(2). Rule 360(a)(3) requires the Chief Administrative Law 
Judge to submit a motion for an extension to the Commission if it is 
determined that an initial decision cannot be issued within the period 
specified in the guidelines. The submission of such motions renders the 
specific apprisal by the Chief Administrative Law Judge under Rule 
900(b) unnecessary. The proposed amendment would eliminate that 
requirement.
    M. In proceedings where an order issued by the Commission requires 
a respondent to pay disgorgement and assesses a civil penalty against 
that respondent, current Rule 1100 allows the Commission to create a 
Fair Fund for the benefit of investors who were harmed by the violation 
found. The proposed amendment would make clear that in such cases, 
hearing officers also have the authority to create Fair Funds.
    N. Tables I, II, and III have been superseded by subsequent 
amendments to the federal securities laws and these rules, and are of 
little utility to the public. The proposed amendment would delete these 
tables.

II. Request for Public Comments

    We request and encourage any interested person to submit comments 
regarding: (1) The proposed changes that are the subject of this 
release, (2) additional or different changes, or (3) other matters that 
may have an effect on the proposals contained in this release.

III. Administrative Procedure Act, Regulatory Flexibility Act, and 
Paperwork Reduction Act

    The Commission finds, in accordance with Section 533(b)(3)(A) of 
the

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Administrative Procedure Act,\7\ that this revision relates solely to 
agency organization, procedure, or practice. It is therefore not 
subject to the provisions of the Administrative Procedure Act requiring 
notice, opportunity for public comment, and publication. The Regulatory 
Flexibility Act \8\ therefore does not apply. Similarly, because these 
rules relate to ``agency organization, procedure or practice that does 
not substantially affect the rights or obligations of non-agency 
parties,'' the Commission is not soliciting comment for purposes of the 
Small Business Regulatory Enforcement Fairness Act.\9\ Nonetheless, the 
Commission has determined that it would be useful to publish these 
proposed rules for notice and comment before adoption.\10\ These rules 
do not contain any collection of information requirements as defined by 
the Paperwork Reduction Act of 1995, as amended.\11\
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    \7\ 5 U.S.C. 553(b)(3)(A).
    \8\ 5 U.S.C. 601 et seq.
    \9\ 5 U.S.C. 804(3)(C).
    \10\ See 5 U.S.C. 603.
    \11\ 44 U.S.C. 3501 et seq.
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IV. Costs and Benefits of the Proposed Amendments

    Taken as a whole, the Commission's Rules of Practice create 
governmental review and remedial processes. That is, they are 
procedural and administrative in nature. The benefits to the parties 
are the familiar benefits of due process: notice, opportunity to be 
heard, efficiency, and fairness. The costs of these processes fall 
largely on the Commission.
    The proposals set forth in this release variously clarify existing 
practice, relate to internal agency management, increase the efficiency 
of proceedings, or promote due process. The Commission requests data to 
quantify the costs and the value of the benefits identified. The 
Commission also seeks estimates and views regarding these costs and 
benefits for particular types of market participants, as well as any 
other costs or benefits that may result from the adoption of the 
proposed rules.

V. Effect on Efficiency, Competition and Capital Formation

    Section 2(b) of the Securities Act of 1933,\12\ Section 3(f) of the 
Exchange Act,\13\ Section 2(c) of the Investment Company Act of 
1940,\14\ and Section 202(c) of the Investment Advisers Act of 1940 
\15\ require us, when engaging in rulemaking that requires us to 
consider or determine whether an act is necessary or appropriate in the 
public interest, to consider whether the action will promote 
efficiency, competition, and capital formation. Section 23(a)(2) of the 
Exchange Act \16\ prohibits us from adopting any rule that would impose 
a burden on competition not necessary or appropriate in furtherance of 
the purposes of the Exchange Act. The proposed rules and amendments are 
intended to enhance the transparency and facilitate parties' 
understanding of the Rules. The proposed amendments are also intended 
to clarify existing practice and increase the efficiency of Commission 
enforcement and self-regulatory organization disciplinary review 
proceedings. The proposed rules and amendments would apply to all 
persons involved in administrative proceedings before the Commission 
and therefore the Commission does not expect the proposed rules and 
amendments to have an anti-competitive effect. To the extent the 
proposed rules and amendments would foster making whole victims of 
securities laws violations and would increase the transparency and 
efficiency of the Commission's administrative proceedings, there might 
be an increase in investor confidence in market fairness and 
efficiency. However, the magnitude of the effect of the proposed 
amendments in this regard is difficult to quantify. We request comment 
on the possible effects of our rule proposals on efficiency, 
competition, and capital formation. Commenters are requested to provide 
empirical data and other factual support for their views if possible.
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    \12\ 15 U.S.C. 77b(b).
    \13\ 15 U.S.C. 78c(f).
    \14\ 15 U.S.C. 80a-2(c).
    \15\ 15 U.S.C. 80b-2(c).
    \16\ 15 U.S.C. 78w(a)(2).
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VI. Statutory Basis and Text of Proposed Amendments

    These amendments to the Rules of Practice and related provisions 
are being adopted pursuant to statutory authority granted to the 
Commission, including section 3 of the Sarbanes-Oxley Act of 2002, 15 
U.S.C. 7202; section 19 of the Securities Act, 15 U.S.C. 77s; sections 
4A, 19, and 23 of the Exchange Act, 15 U.S.C. 78d-1, 78s, and 78w; 
section 20 of the Public Utility Holding Company Act of 1935, 15 U.S.C. 
79t; section 319 of the Trust Indenture Act of 1939, 15 U.S.C. 77sss; 
sections 38 and 40 of the Investment Company Act, 15 U.S.C. 80a-37 and 
80a-39; and section 211 of the Investment Advisers Act, 15 U.S.C. 80b-
11.

List of Subjects in 17 CFR Part 201

    Administrative practice and procedure.

Text of the Amendment

    For the reasons set out in the preamble, Title 17, Chapter II of 
the Code of Federal Regulations is proposed to be amended as follows:

PART 201--RULES OF PRACTICE

    1. The authority citation for part 201 continues to read as 
follows:

    Authority: 15 U.S.C. 77s, 78w, 78x, 79t, 77sss, 80a-37 and 80b-
11; 5 U.S.C. 504(c)(1).

    2. Section 201.55 is amended by revising the third sentence in 
paragraph (a) to read as follows:


Sec.  201.55  Further proceedings.

    (a) * * * The administrative law judge may order all proceedings 
that are otherwise available under Rules 221 and 222(a) of the 
Commission's Rules of Practice, Sec. Sec.  201.211 and 201.222(a). * * 
*
* * * * *
    3. The authority citation for Part 201, subpart D, continues to 
read as follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77h-1, 77j, 77s, 77u, 
78c(b), 78d-1, 78d-2, 78l, 78m, 78n, 78o(d), 78o-3, 78s, 78u-2, 78u-
3, 78v, 78w, 79c, 79s, 79t, 79z-5a, 77sss, 77ttt, 80a-8, 80a-9, 80a-
37, 80a-38, 80a-39, 80a-40, 80a-41, 80a-44, 80b-3, 80b-9, 80b-11, 
80b-12, 7202, 7215, and 7217.


Sec.  201.102  [Amended]

    4. Section 201.102 is amended by revising the cite ``Sec.  
201.531'' to read ``Sec.  201.540'' in the last sentence of paragraph 
(e)(3)(iii).
    5. Section 201.111 is amended by revising paragraph (h) to read as 
follows:


Sec.  201.111  Hearing officer: Authority.

* * * * *
    (h) Subject to any limitations set forth elsewhere in these Rules 
of Practice, considering and ruling upon all procedural and other 
motions, including a motion to correct a manifest error of fact in the 
initial decision. Any motion to correct must be filed within ten days 
of the initial decision. A brief in opposition may be filed within five 
days of a motion to correct. The hearing officer shall have 20 days 
from the date of filing of any brief in opposition filed to rule on a 
motion to correct;
* * * * *
    6. Section 201.141 is amended by:
    a. Revising paragraph (a)(2)(ii); and
    b. Adding paragraph (a)(2)(vi).
    The revision and addition read as follows.


Sec.  201.141  Orders and decisions: Service of orders instituting 
proceeding and other orders and decisions.

    (a) * * *

[[Page 22227]]

    (2) * * *
    (ii) To corporations or entities. Notice of a proceeding shall be 
made to a person other than a natural person by delivering a copy of 
the order instituting proceedings to an officer, managing or general 
agent, or any other agent authorized by appointment or law to receive 
such notice, by any method specified in paragraph (a)(2)(i) of this 
section, or, in the case of an issuer of a class of securities 
registered with the Commission, by sending a copy of the order 
addressed to the most recent address shown on the entity's most recent 
filing with the Commission by U.S. Postal Service certified, registered 
or Express Mail and obtaining a confirmation of attempted delivery.
* * * * *
    (vi) To persons registered with self-regulatory organizations. 
Notice of a proceeding shall be made to a person registered with a 
self-regulatory organization by any method specified in paragraph 
(a)(2)(i) of this section, or by sending a copy of the order addressed 
to the most recent address for the person shown in the Central 
Registration Depository by U.S. Postal Service certified, registered or 
Express Mail and obtaining a confirmation of attempted delivery.
* * * * *
    7. Section 201.152 is amended by revising paragraph (d) to read as 
follows:


Sec.  201.152  Filing of papers: Form.

* * * * *
    (d) Number of copies. An original and three copies of all papers 
shall be filed, unless filing is made by facsimile in accordance with 
Sec.  201.151. If filing is made by facsimile, the filer shall also 
transmit to the Office of the Secretary one non-facsimile original with 
a manual signature, contemporaneously with the facsimile transmission.
* * * * *
    8. Section 201.154 is amended by revising paragraph (c) to read as 
follows:


Sec.  201.154  Motions.

* * * * *
    (c) Length limitation. A motion (together with the brief in support 
of the motion, the brief in opposition to the motion, or any reply 
brief) shall not exceed 7,000 words, exclusive of any table of contents 
or table of authorities. The word limit shall not apply to any addendum 
that consists solely of copies of applicable cases, pertinent 
legislative provisions or rules, or relevant exhibits. Requests for 
leave to file motions and briefs in excess of 7,000 words are 
disfavored. A motion that does not, together with any accompanying 
brief, exceed 15 pages in length, exclusive of pages containing the 
table of contents, table of authorities, and any addendum that consists 
solely of copies of applicable cases, pertinent legislative provisions, 
or rules and exhibits, but inclusive of pleadings incorporated by 
reference, is presumptively considered to contain no more than 7,000 
words. Any motion that exceeds these page limits must include a 
certificate by the attorney, or an unrepresented party, stating that 
the brief complies with the length limitation set forth in this 
paragraph and stating the number of words in the motion. The person 
preparing the certificate may rely on the word count of a word-
processing program to prepare the motion.
    9. Section 201.201 is amended by revising the first sentence of 
paragraph (b) to read as follows:


Sec.  201.201  Consolidation and severance of proceedings.

* * * * *
    (b) * * * By order of the Commission, any proceeding may be severed 
with respect to one or more parties. * * *
    10. Section 201.210 is amended by:
    a. Revising the cite ``Sec.  201.612'' to read ``Sec.  201.1103'' 
in paragraph (a)(2);
    b. Removing the colon at the end of the introductory text of 
paragraph (b)(1) and adding a period in its place; and
    c. Adding a sentence at the end of the introductory text of 
paragraph (b)(1).
    The revision and addition read as follows.


Sec.  201.210  Parties, limited participants and amici curiae.

* * * * *
    (b) * * * (1) * * * No person, however, shall be admitted as a 
party to a proceeding by intervention unless it is determined that 
leave to participate pursuant to paragraph (c) of this section would be 
inadequate for the protection of the person's interests.
* * * * *
    11. Section 201.250 is amended by revising paragraph (c) to read as 
follows:


Sec.  201.250  Motion for summary disposition.

* * * * *
    (c) The motion for summary disposition, supporting memorandum of 
points and authorities (exclusive of any declarations, affidavits or 
attachments) shall not exceed 9,800 words. Requests for leave to file 
motions and accompanying documents in excess of 9,800 words are 
disfavored. A motion that does not, together with any accompanying 
memorandum of points and authorities, exceed 35 pages in length, 
inclusive of pleadings incorporated by reference (but excluding any 
declarations, affidavits or attachments) is presumptively considered to 
contain no more than 9,800 words. Any motion that exceeds these page 
limits must include a certificate by the attorney, or an unrepresented 
party, stating that the brief complies with the length limitation set 
forth in this paragraph and stating the number of words in the motion. 
The person preparing the certificate may rely on the word count of a 
word-processing program to prepare the motion.
    12. Section 201.411 is amended by revising the first sentence in 
paragraph (c) to read as follows:


Sec.  201.411  Commission consideration of initial decisions by hearing 
officers.

* * * * *
    (c) * * * The Commission may, on its own initiative, order review 
of any initial decision, or any portion of any initial decision, within 
21 days after the end of the period established for filing a petition 
for review pursuant to Sec.  210.410(b). * * *
* * * * *
    13. Section 201.430 is amended by revising paragraph (b)(1) to read 
as follows:


Sec.  201.430  Appeal of actions made pursuant to delegated authority.

* * * * *
    (b) * * * (1) Notice of intention to petition for review. A party 
to an action made pursuant to delegated authority, or a person 
aggrieved by such action, may seek Commission review of the action by 
filing a notice of intention to petition for review within five days 
after actual notice of the action to the party or person, or 15 days 
after publication of the notice of action in the Federal Register, or 
five days after service of notice of the action on the party or person 
pursuant to Sec.  201.141(b), whichever is the earliest.
* * * * *
    14. Section 201.470 is amended by revising the third sentence of 
paragraph (b) to read as follows:


Sec.  201.470  Reconsideration.

* * * * *
    (b) * * * A motion for reconsideration shall conform to the 
requirements, including the limitation on the numbers of words, 
provided in Sec.  201.154. * * *
    15. Section 201.601 is amended by revising paragraph (a) to read as 
follows:


Sec.  201.601  Prompt payment of disgorgement, interest and penalties.

    (a) Timing of payments. Unless otherwise provided, funds due 
pursuant

[[Page 22228]]

to an order by the Commission requiring the payment of disgorgement, 
interest or penalties shall be paid no later than 21 days after service 
of the order, and funds due pursuant to an order by a hearing officer 
shall be paid in accordance with the order of finality issued pursuant 
to Sec.  201.360(d)(2).
* * * * *
    16. Section 201.900 is amended by revising the last sentence in 
paragraph (b) to read as follows:


Sec.  201.900  Informal procedures and supplementary information 
concerning adjudicatory proceedings.

* * * * *
    (b) * * * In connection with these reports, if a proceeding pending 
before the Commission has not been concluded within 30 days of the 
guidelines established in paragraph (a) of this section, the General 
Counsel shall specifically apprise the Commission of that fact, and 
shall describe the procedural posture of the case, project an estimated 
date for conclusion of the proceeding, and provide such other 
information as is necessary to enable the Commission to determine 
whether additional steps are necessary to reach a fair and timely 
resolution of the matter.
* * * * *
    17. Part 201, subpart D, is amended by removing Tables I, II, and 
III at the end of the subpart.

Subpart F--Fair Fund and Disgorgement Plans

    18. The authority citation for subpart F continues to read as 
follows.

    Authority: 15 U.S.C. 77h-1, 77s, 77u, 78c(b), 78d-1, 78d-2, 78u-
2, 78u-3, 78v, 78w, 80a-9, 80a-37, 80a-39, 80a-40, 80b-3, 80b-11, 
80b-12, and 7246.

    19. Section 201.1100 is revised to read as follows:


Sec.  201.1100  Creation of fair fund.

    In any agency process initiated by an order instituting proceedings 
in which the Commission or the hearing officer issues an order 
requiring the payment of disgorgement by a respondent and also 
assessing a civil money penalty against that respondent, the Commission 
or the hearing officer may order that the amount of disgorgement and of 
the civil penalty, together with any funds received pursuant to 15 
U.S.C. 7246(b), be used to create a fund for the benefit of investors 
who were harmed by the violation.

    Dated: April 21, 2005.

    By the Commission.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 05-8484 Filed 4-27-05; 8:45 am]
BILLING CODE 8010-01-P