[Federal Register Volume 76, Number 97 (Thursday, May 19, 2011)]
[Rules and Regulations]
[Pages 28888-28890]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-12280]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 202

[Release Nos. 33-9208; 34-64495; IC-29670]


Amendment to Procedures for Holding Funds in Dormant Filing Fee 
Accounts

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: The Securities and Exchange Commission is amending its 
procedures for holding funds in any filing fee account in which there 
has not been a deposit, withdrawal or other adjustment. The amendment 
extends the holding period from 180 days to three years, after which 
the Commission will initiate the return of funds to the account holder 
without any action by the account holder. As always, account holders 
may request a refund of such fees at any time.

DATES: Effective Date: May 19, 2011.

FOR FURTHER INFORMATION CONTACT: Kenneth Johnson, (202) 551-4306, Chief 
Financial Officer, Office of Financial Management; Stephen Jung, (202) 
551-5162, Assistant General Counsel, Office of the General Counsel; 
Michael Bloise,

[[Page 28889]]

(202) 551-5116, Senior Counsel, Office of the General Counsel, 
Securities and Exchange Commission, 100 F Street, NE., Washington, DC 
20549.

SUPPLEMENTARY INFORMATION: The Commission is amending rule 3a (17 CFR 
202.3a) of its Informal and Other Procedures under the Securities Act 
of 1933 (``Securities Act'').\1\
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    \1\ 15 U.S.C. 77a.
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I. Discussion

    The federal securities laws impose a number of fees on filings.\2\ 
Pursuant to rule 3a of the Commission's Informal and Other Procedures 
(17 CFR 202.3a), filing fees paid under the Securities Act, Exchange 
Act, and Investment Company Act currently are transmitted to a Treasury 
designated lockbox depository, where they are held in filing fee 
accounts maintained by the Commission for each filer who submits a 
filing requiring a fee on the Commission's EDGAR system or who submits 
funds to the Treasury designated lockbox depository in anticipation of 
paying a filing fee.\3\ The Commission staff prepares account 
statements and sends these to account holders whenever a deposit, 
withdrawal, or other change occurs. The account holder, in turn, must 
maintain a current account address with the Commission to ensure timely 
access to such statements.\4\ Pursuant to current 17 CFR 202.3a(e), the 
staff will initiate the return to the account holder of any funds held 
in any filing fee account in which there has not been a deposit, 
withdrawal or other adjustment for more than 180 calendar days, and 
account statements will not be sent again until a deposit, withdrawal 
or other adjustment is made with respect to the account.
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    \2\ See, e.g., section 6(b) of the Securities Act, sections 
13(e), 14(g), and 31 of the Securities Exchange Act of 1934 
(``Exchange Act''), and section 24(f) of the Investment Company Act 
of 1940 (``Investment Company Act'').
    \3\ 17 CFR 202.3a(d).
    \4\ Id.
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    The 180-day limitation on the time in which the Commission may hold 
such funds could lead to considerable inefficiency and administrative 
burden for both account holders and Commission staff. Increasing the 
length of time in which the funds may remain inactive in an account 
will allow greater flexibility to filers who still intend to pay fees 
and do not want to receive a mandatory disbursement only to return it 
to the Commission at the time a fee is due. This concern is 
particularly acute for those filers whose payment obligations involve 
fees that are due on a periodic basis in excess of 180 days, such as 
investment companies who submit approximately 5,800 Form 24F-2 filings 
annually.\5\ And, while the amendment will create more flexibility for 
filers who wish to leave funds in their accounts, the right of an 
account holder to receive a disbursement of excess funds from its 
account any time upon request to the Commission will continue 
unchanged.
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    \5\ Form 24F-2 is the annual notice of securities sold by 
certain investment companies pursuant to rule 24f-2 under the 
Investment Company Act of 1940 that accompanies the payment of 
registration fees under the Securities Act of 1933.
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    The amendment also will harmonize the Commission's account-clearing 
procedure with Securities Act Rule 415(a)(5), which allows issuers 
eligible to conduct primary shelf offerings to sell securities relying 
on an effective registration statement for up to three years before 
they are required to file a new one.\6\ This is particularly important 
in connection with automatic shelf registration statements, which allow 
issuers to register an indeterminate amount of securities when they 
initially file and defer payment of required fees until they later 
determine the amount of securities they wish to sell. As a result of 
this ``pay-as-you-go'' feature, issuers with automatic shelf 
registration statements may be required to pay additional fees 
throughout the life of the registration statement. Adoption of a three-
year inactivity period before account balances are returned will ensure 
that funds paid at the time a shelf registration statement is initially 
filed will remain available to issuers in their lockbox accounts for 
the life of the registration statement. This could also benefit issuers 
by allowing them to review the unused balances available in their 
lockbox accounts no more frequently than they are required to prepare 
and file new shelf registration statements. Issuers that review their 
capital-raising plans in connection with each required renewal of a 
shelf registration statement would be able to adjust the amounts on 
deposit in their lockbox accounts to match their future offering plans. 
Any resulting additional deposits or withdrawal requests would result 
in account activity, which would obviate the need for a refund until 
the expiration of an additional three-year time period. As a 
consequence, a three-year time period could help reduce the number of 
refund payments made to issuers who would prefer to have funds remain 
in their lockboxes to cover anticipated future filing needs. And, as 
noted above, the right of an issuer to receive a disbursement of excess 
funds from its account at any time upon request to the Commission will 
continue unchanged.
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    \6\ 17 CFR 230.415.
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II. Administrative Procedure Act and Other Administrative Laws

    The Commission has determined that this amendment to its rules 
relates solely to the agency's organization, procedure, or practice. 
Therefore, the provisions of the Administrative Procedure Act (``APA'') 
regarding notice of proposed rulemaking and opportunity for public 
participation are not applicable.\7\ For the same reasons, and because 
this amendment does not substantially affect the rights or obligations 
of non-agency parties, the provisions of the Small Business Regulatory 
Enforcement Fairness Act are not applicable.\8\ In addition, the 
provisions of the Regulatory Flexibility Act, which apply only when 
notice and comment are required by the APA or other law, are not 
applicable.\9\ Finally, this amendment does not contain any collection 
of information requirements as defined by the Paperwork Reduction Act 
of 1995, as amended.\10\
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    \7\ 5 U.S.C. 553(b).
    \8\ 5 U.S.C. 804.
    \9\ 5 U.S.C. 601-12.
    \10\ 44 U.S.C. 3501-20.
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III. Cost-Benefit Analysis

    The Commission is sensitive to the costs and benefits imposed by 
its rules. The rule amendment the Commission is adopting today amends 
the Commission's rules to extend the period in which the Commission 
shall hold funds in a dormant account prior to issuing an automatic 
refund, so as to increase the efficiency of the procedure and harmonize 
the Commission's account clearing procedures with Securities Act Rule 
415(a)(5). The right of an account holder to receive a full refund of 
fees held by the Commission in a dormant account, at any time upon 
request, remains unchanged. The Commission does not believe that the 
rule amendment will impose any costs on non-agency parties, or that if 
there are any such costs, they are negligible.

IV. Consideration of Burden on Competition

    Section 23(a)(2) of the Exchange Act requires the Commission, in 
making rules pursuant to any provision of the Exchange Act, to consider 
among other matters the impact any such rule would have on competition. 
The Commission does not believe that the amendment that the Commission 
is adopting today will have any impact on competition.

[[Page 28890]]

V. Statutory Basis and Text of Final Rule Amendments

    The Commission is adopting amendments pursuant to sections 6(b) and 
19 of the Securities Act, sections 13(e), 14(g), 23, and 31 of the 
Exchange Act, and sections 24(f) and 38 of the Investment Company Act.

List of Subjects in 17 CFR Part 202

    Administrative practice and procedure, Securities.

    In accordance with the foregoing, 17 CFR, Chapter II of the Code of 
Federal Regulations is amended as follows:

PART 202--INFORMAL AND OTHER PROCEDURES

0
1. The authority citation for Part 202 continues to read in part as 
follows:

    Authority:  15 U.S.C. 77s, 77t, 78d-1, 78u, 78w, 78ll(d), 79r, 
79t, 77sss, 77uuu, 80a-37, 80a-41, 80b-9, 80b-11, and 7201 et seq., 
unless otherwise noted.
* * * * *

0
2. Section 202.3a, paragraph (e) is amended by removing the phrase 
``180 calendar days'', and adding in its place the phrase ``three 
years''.

    By the Commission.

    Dated: May 13, 2011.
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-12280 Filed 5-18-11; 8:45 am]
BILLING CODE 8011-01-P