[Federal Register Volume 70, Number 153 (Wednesday, August 10, 2005)]
[Rules and Regulations]
[Pages 46403-46405]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-15750]



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  Federal Register / Vol. 70, No. 153 / Wednesday, August 10, 2005 / 
Rules and Regulations  

[[Page 46403]]



DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 11

[Docket No. 05-14]
RIN 1557-AC75


Electronic Filing and Disclosure of Beneficial Ownership Reports

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Final rule.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) is issuing 
this final rule to adopt in final form, without substantive change, an 
interim rule to amend the OCC's rules, policies, and procedures to 
require the electronic filing of beneficial ownership reports by 
officers, directors, and major shareholders of national banks that have 
equity securities registered under the Securities Exchange Act of 1934.
    As required by the interim rule, this final rule requires that all 
reports filed with the OCC under section 16(a) of the Securities 
Exchange Act of 1934 must be filed electronically and posted on a 
registered national bank's Web site, if it has one, as soon as 
practicable. This final rule clarifies procedures for officers, 
directors, and principal shareholders of registered national banks to 
comply with these mandated electronic filing requirements.

DATES: This final rule is effective on September 9, 2005.

FURTHER INFORMATION CONTACT:  Asa Chamberlayne, Counsel, Securities and 
Corporate Practices Division, 202-874-5210, or Martha Vestal Clarke, 
Counsel, Legislative and Regulatory Activities Division, 202-874-5090.

SUPPLEMENTARY INFORMATION:

Background

    The Securities Exchange Act of 1934 (Exchange Act) seeks to protect 
investors by requiring accurate, reliable, and timely corporate 
securities disclosures. Generally, companies with equity securities 
that are subject to the registration requirements under section 12 of 
the Exchange Act (15 U.S.C. 78l) must register these securities with 
the Securities and Exchange Commission (SEC). Section 16(a) of the 
Exchange Act (15 U.S.C. 78p(a)) requires directors, executive officers, 
and direct or indirect beneficial owners of more than 10 percent of a 
class of securities that are registered under the Exchange Act 
(insiders) to file beneficial ownership reports regarding their 
ownership and transactions in the company's securities.\1\ Section 
12(i) of the Exchange Act (15 U.S.C. 78l(i)) vests the OCC, rather than 
the SEC, with the power to issue regulations implementing certain 
Exchange Act requirements with respect to national banks that have 
equity securities registered under the Exchange Act (registered 
national banks), including section 16, and with the authority to 
administer and enforce these requirements.\2\
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    \1\ Section 16(a) also requires an entity that has registered 
its securities under the Exchange Act to file initial and 
transactional reports with any national securities exchange on which 
it has listed its securities. See 15 U.S.C. 78p(a).
    \2\ Under section 12(i), the other Federal banking agencies have 
the same authority with respect to the registered depository 
institutions that they supervise. See 15 U.S.C. 78l(i).
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    As amended by the Sarbanes-Oxley Act of 2002, Pub. L. 107-204, 
section 16(a) requires that insiders of a registered company, including 
a registered national bank, must file beneficial ownership reports: (1) 
At the time the company registers its securities pursuant to section 12 
of the Exchange Act; (2) within 10 days after becoming an insider of a 
registered national bank; and (3) within two business days after an 
insider consummates a transaction resulting in a change in ownership, 
or resulting in the purchase or sale of a security-based swap 
agreement,\3\ in the registered securities. These provisions became 
effective on August 29, 2002.
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    \3\ The term ``security-based swap agreement'' is defined in 
section 206(b) of the Gramm-Leach-Bliley Act (15 U.S.C. 78c note).
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    Section 16(a)(4) (15 U.S.C. 78p(a)(4)) also requires that, 
beginning July 30, 2003, insiders must file their change-in-ownership 
reports electronically. Moreover, the SEC, and the OCC in the case of 
registered national banks, must make these filings available to the 
public on the Internet not later than the end of the business day 
following the filing. Also, a registered company, including a 
registered national bank, must post its insiders' change-in-ownership 
reports on its Web site, if it has a Web site, not later than the end 
of the business day following the filing.
    The SEC's final rules implementing these requirements for other 
public companies mandate that all beneficial ownership reports filed 
under section 16(a), not only the change-in-ownership reports, must be 
filed electronically and posted on a public company's Web site, if the 
company has a Web site, not later than the end of the business day 
following the filing. In addition, the SEC provides Internet access to 
all such filings that are filed with the SEC. The SEC's rules were 
effective for all section 16(a) filings that are made on or after June 
30, 2003.\4\
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    \4\ See 68 FR 25788 (May 13, 2003).
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    The SEC's final rules also amended 17 CFR 240.16a-3, which applies 
to registered national banks through the OCC's regulations at 12 CFR 
11.2(b)(2). As amended by the SEC, 17 CFR 240.16a-3 provides that any 
issuer with a corporate Web site must post any section 16(a) report on 
that Web site by the end of the business day after the filing, and the 
filing must remain accessible on the Web site for at least 12 months. 
These same requirements apply to registered national banks.
    On September 22, 2003, the OCC published and requested comment on 
an interim rule amending 12 CFR part 11 (see 68 FR 54981). In the 
interim rule, we imposed requirements similar to those adopted by the 
SEC and required that all section 16(a) reports must be filed 
electronically by the required due dates. To provide for the electronic 
filing of insiders' reports under section 16(a) of the Exchange Act, 
the Federal Deposit Insurance Corporation, the Board of Governors of 
the Federal Reserve System, and the OCC created an electronic filing 
system utilizing the FDICconnect secure Web platform. This filing 
system became operational on July 30, 2003.
    In order to assure that this new system was operating effectively, 
we did

[[Page 46404]]

not require compliance with the electronic filing and Web site posting 
requirements until January 1, 2004. We advised that, before January 1, 
2004, to the extent practicable, registered national banks should post 
the section 16(a) filings on their Web sites and their insiders should 
file their section 16(a) reports electronically.

Description of Comments and Final Rule

    The comment period on the interim rule ended November 21, 2003, and 
no comments were received. Moreover, while a very few banks may have 
had some minor problems connecting to or filing reports on FDICconnect 
in the past, no further problems have been reported. Thus, the OCC is 
adopting the interim rule as a final rule with no substantive 
modifications.
    Accordingly, the final rule revises 12 CFR 11.3(a), which relates 
to filing requirements and the inspection of documents filed with the 
OCC pursuant to the Exchange Act. The rule contains a new Sec.  
11.3(a)(2), which provides that statements that are required to be 
filed electronically pursuant to section 16(a) of the Exchange Act 
shall be filed electronically. New Sec.  11.3(a)(4) clarifies that the 
electronic filing and Web site posting requirements are mandatory for 
section 16(a) statements that are required to be filed on or after 
January 1, 2004.
    The final rule also adds a new Sec.  11.3(a)(3)(ii) which provides 
that an electronic filing pursuant to section 16(a) of the Exchange Act 
submitted by direct transmission on or before 10 p.m. Eastern Standard 
Time or Eastern Daylight Savings Time, whichever is currently in 
effect, shall be deemed filed on the same business day. This aspect of 
the final rule is consistent with the SEC's rules applicable to 
electronic filings that apply to other registered companies. See 17 CFR 
232.13(a)(4).
    The OCC's current rule at Sec.  11.2(b)(2) references the 
requirements in the SEC's rules that a public company that has a Web 
site must post any filings on Forms 3, 4, or 5-- the forms for filing 
beneficial ownership reports under section 16(a) of the Exchange Act--
by the end of the business day after the filing and continue to make 
that form accessible on its Web site for at least 12 months. See 17 CFR 
240.16a-3. Under the OCC's current rules, a registered national bank is 
required to post these filings on its Web site, if it has one, in 
accordance with 17 CFR 240.16a-3.
    The OCC has adopted the interim rule with one technical 
modification concerning the authority citation. The interim rule 
contained a change to the authority citation for part 11 that is no 
longer necessary. The OCC made this change already in a final rule 
amending 12 CFR parts 11 and 16, ``Reporting and Disclosure 
Requirements for National Banks With Securities Registered Under the 
Securities Exchange Act of 1934; Securities Offering Disclosure 
Rules,''. See 68 FR 68489 (Dec. 9, 2003).

Regulatory Analysis

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995, the OCC may 
not conduct or sponsor, and a respondent is not required to respond to, 
an information collection unless it displays a currently valid Office 
of Management and Budget (OMB) control number. The collections of 
information requirements in 12 CFR part 11, including the requirements 
in this final rule, have been submitted to and approved by OMB under 
OMB Control Number 1557-0106.

Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 
U.S.C. 605(b) (RFA), the regulatory flexibility analysis otherwise 
required under section 604 of the RFA is not required if the agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities and publishes its certification 
and a short, explanatory statement in the Federal Register along with 
its rule. As of December 31, 2002, there were approximately 25 
registered national banks subject to the amendments to part 11. As of 
the same date, only 15 of these institutions have assets of less than 
$100 million and are considered small entities for purposes of the RFA. 
See 5 U.S.C. 601; 13 CFR 121.201.
    Based on the relatively small number of national banks affected by 
the final rule and the fact that the requirements will not materially 
change the operating environment for those banks, the OCC hereby 
certifies that this rulemaking will not have a significant economic 
impact on a substantial number of small entities. Accordingly, a 
regulatory flexibility analysis is not needed.

Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995, Pub. L. 
104-04 (Unfunded Mandates Act) requires that an agency prepare a 
budgetary impact statement before promulgating a rule that includes a 
Federal mandate that may result in expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. If a budgetary impact statement is 
required, section 205 of the Unfunded Mandates Act also requires an 
agency to identify and consider a reasonable number of regulatory 
alternatives before promulgating a rule. The OCC has determined that 
the final rule will not result in expenditures by State, local, or 
tribal governments or by the private sector of $100 million or more. 
Accordingly, the OCC has not prepared a budgetary impact statement or 
specifically addressed the regulatory alternatives considered.

Executive Order 12866

    The OCC has determined that this final rule does not constitute a 
``significant regulatory action'' for the purposes of Executive Order 
12866.

List of Subjects in 12 CFR Part 11

    Confidential business information, National banks, Reporting and 
recordkeeping requirements, Securities.

PART 11--SECURITIES EXCHANGE ACT DISCLOSURE RULES

0
1. The authority citation for part 11 continues to read as follows:

    Authority: 12 U.S.C. 93a; 15 U.S.C. 78l, 78m, 78n, 78p, 78w, 
7241, 7242, 7243, 7244, 7261, 7262, 7264 and 7265.


0
2. In Sec.  11.3, paragraph (a) is revised to read as follows:


Sec.  11.3  Filing requirements and inspection of documents.

    (a) Filing requirements. (1) General. Except as otherwise provided 
in this section, all papers required to be filed with the OCC pursuant 
to the 1934 Act or regulations thereunder shall be submitted in 
quadruplicate to the Securities and Corporate Practices Division, 
Office of the Comptroller of the Currency, 250 E Street, SW., 
Washington, DC 20219. Material may be filed by delivery to the OCC 
through the mail, by fax (202-874-5279), or otherwise.
    (2) Statements filed pursuant to section 16(a) of the 1934 Act. 
Statements required under section 16(a) of the 1934 Act shall be filed 
electronically, as directed by the OCC.
    (3) Date of filing. (i) General. The date on which papers are 
actually received by the OCC shall be the date of filing, if the person 
or bank filing the papers has complied with all applicable 
requirements.
    (ii) Electronic filings. An electronic filing of a statement 
required under section 16(a) of the 1934 Act that is submitted by 
direct transmission on or before 10 p.m. Eastern Standard Time or 
Eastern Daylight Savings Time,

[[Page 46405]]

whichever is currently in effect, shall be deemed filed on the same 
business day.
    (4) Mandatory compliance date. Compliance with paragraph (a)(2) of 
this section and any applicable requirements that such statements must 
be posted on a registered national bank's Web site are mandatory for 
statements required to be filed on or after January 1, 2004.
* * * * *

    Dated: August 3, 2005.
Julie L. Williams,
Acting Comptroller of the Currency.
[FR Doc. 05-15750 Filed 8-9-05; 8:45 am]
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