[Federal Register Volume 76, Number 212 (Wednesday, November 2, 2011)]
[Rules and Regulations]
[Pages 67597-67599]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-28313]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Part 200
[Release No. 34-65628]
Technical Amendment to Delegation of Authority to the Director of
the Division of Trading and Markets
AGENCY: Securities and Exchange Commission.
ACTION: Final rule; technical amendment.
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SUMMARY: The Securities and Exchange Commission (``Commission'') is
making a technical amendment to the rule that delegates authority to
the Director of the Division of Trading and Markets to grant exemptions
upon specified terms, conditions, and periods to persons subject to
Rule 17f-2 under the Securities Exchange Act of 1934 (``Exchange
Act'').
DATES: Effective Date: November 2, 2011.
FOR FURTHER INFORMATION CONTACT: Jerry W. Carpenter, Assistant
Director, or
[[Page 67598]]
David Karasik, Special Counsel, at (202) 551-5710, Securities and
Exchange Commission, Division of Trading and Markets, Room 7321 SP1,
100 F Street NE., Washington, DC 20549-7010.
SUPPLEMENTARY INFORMATION:
I. Background
Section 17(f)(2) of the Exchange Act requires every member of a
national securities exchange, broker, dealer, registered transfer
agent, and registered clearing agency to require that each of its
partners, directors, officers, and employees be fingerprinted and to
submit such fingerprints to the U.S. Attorney General for
identification and processing.\1\ In order to permit some flexibility
in the administration of the fingerprinting requirement, Section
17(f)(2) also provides ``The Commission, by rule, may exempt from the
provisions of this paragraph [Section 17(f)(2)] upon specified terms,
conditions, and periods, any class of partners, directors, officers, or
employees of any such member, broker, dealer, transfer agent, or
clearing agency, if the Commission finds that such action is not
inconsistent with the public interest or the protection of investors.''
\2\
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\1\ 15 U.S.C. 78q(f)(2).
\2\ Id.
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Pursuant to this statutory authority, the Commission adopted Rule
17f-2 in 1976 to provide for certain exemptions from the fingerprinting
requirement of Section 17(f)(2) of the Exchange Act.\3\ As adopted by
the Commission in 1976, exemptions from the fingerprinting requirements
of Section 17(f)(2) could also be requested by persons that did not
meet certain conditions specified in Rule 17f-2 by applying to the
Commission for exemptive relief pursuant to a prior paragraph (g) of
Rule 17f-2.\4\
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\3\ 17 CFR 240.17f-2. Securities Exchange Act Release No. 12214
(Mar. 16, 1976), 41 FR 13594 (Mar. 31, 1976).
\4\ Prior Rule 17f-2(g) (as reflected in 1976 at the time of
adoption of the rule) provided:
The Commission, upon specified terms, conditions and periods,
may grant exemptions to any class of partners, directors, officers,
or employees of any member of a national securities exchange,
broker, dealer, registered transfer agent, or registered clearing
agency, if the Commission finds that such action is not inconsistent
with the public interest or the protection of investors.
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After adopting Rule 17f-2, the Commission delegated its authority,
pursuant to Rule 30-3(a)(17) of the Commission's Rules of Organization
and Program Management, to grant exemptions under Rule 17f-2(g) to the
Director of the Division of Market Regulation (now known as the
Division of Trading and Markets) (``Division Director'').\5\ In 1982,
the Commission amended Rule 17f-2 in order to simplify the process of
claiming exemptions from the fingerprinting requirements.\6\ Part of
this simplification effort involved a change consisting of moving the
entire text of paragraph (g) of Rule 17f-2, without any modifications,
to a new subparagraph (a)(2). However, the Commission did not update
references to Rule 17f-2(g) contained in Rule 30-3(a)(17) to reflect
this change. In order to correct this oversight, the Commission is
making a technical amendment to Rule 30-3(a)(17) to reflect the
authority of the Division Director to grant exemptions upon specified
terms, conditions, and periods to persons subject to Rule 17f-2
pursuant to Rule 17f-2(a)(2).
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\5\ Rule 30-3 of the Commission's Rules of Organization and
Program Management has been updated to reflect the name of the
division is now the Division of Trading and Markets. See 17 CFR
200.30-3.
\6\ Securities Exchange Act Release No. 19268 (Nov. 18, 1982),
47 FR 54060 (Dec. 1, 1982).
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II. Administrative Law Matters
The Administrative Procedure Act (``APA'') \7\ generally requires
an agency to publish, before adopting a rule, notice of a proposed
rulemaking in the Federal Register.\8\ This requirement does not apply,
however, to, ``interpretive rules, general statements of policy, or
rules of agency organization, procedure, or practice.'' \9\
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\7\ 5 U.S.C. 551 et seq.
\8\ See 5 U.S.C. 553(b).
\9\ Id.
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This amendment consisting of replacing an outdated reference to
``Rule 17f-2(g)'' with a reference to ``Rule 17f-2(a)(2)'' within Rule
30-3 of the Commission's Rules of Organization and Program Management
is a technical change, being adopted solely to interpret references to
a statutory provision that has been moved but otherwise remains
unchanged and which relates solely to the delegation of authority or
duties within the Commission. Accordingly, the Commission finds that
because the amendments relate solely to interpretive rules and rules of
agency organization, procedure, or practice, that publishing the
changes for comment is unnecessary.\10\ In addition, the APA generally
requires that an agency publish a rule in the Federal Register 30 days
before the rule becomes effective.\11\ This requirement, however, does
not apply to ``interpretative rules and statements of policy.'' \12\
Because this amendment functions as an interpretative rule that would
merely interpret references to an outdated ``Rule 17f-2(g)'' (that
presently does not exist) as applying to ``Rule 17f-2(a)(2)'' this
amendment may take effect immediately. Similarly, the amendment does
not require analysis under the Regulatory Flexibility Act or analysis
of major rule status under the Small Business Regulatory Fairness
Act.\13\
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\10\ Id.
\11\ See 5 U.S.C. 553(d).
\12\ Id.
\13\ See 5 U.S.C. 601(2) (for purposes of Regulatory Flexibility
Act analysis, the term ``rule'' means any rule for which the agency
publishes a general notice of proposed rulemaking); and 5 U.S.C.
804(3)(C) (for purposes of Congressional review of agency
rulemaking, the term ``rule'' does not include any rule of agency
organization, procedure or practice that does not substantially
affect the rights or obligations of non-agency parties).
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III. Consideration of the Competitive Effects of Amendment
Section 3(f) of the Exchange Act,\14\ provides that whenever the
Commission is engaged in rulemaking and is required to consider or
determine whether an action is necessary or appropriate in the public
interest, the Commission shall consider, in addition to the protection
of investors, whether the action will promote efficiency, competition,
and capital formation. In addition, Section 23(a)(2) of the Exchange
Act requires the Commission in adopting rules under the Exchange Act to
consider the competitive effects of such rules.\15\ Because this
amendment merely makes a technical change to update a statutory
reference, the Commission does not anticipate that the amendment would
have an effect on efficiency, competition, or capital formation, and
the Commission does not anticipate any competitive advantages or
disadvantages would be created.
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\14\ 15 U.S.C. 78c(f).
\15\ 15 U.S.C. 78w(a)(2).
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IV. Statutory Authority and Text of Amendments
We are adopting this technical amendment under the authority set
forth in Section 23(a) of the Exchange Act.\16\
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\16\ 15 U.S.C. 782w(a).
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List of Subjects 17 CFR Part 200
Administrative practice and procedure, Conflict of interests, and
Freedom of information.
Text of Amendment
For the reasons set out in the preamble, Title 17, Chapter II of
the Code of Federal Regulations is amended as follows:
[[Page 67599]]
PART 200--ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND
REQUESTS
0
1. The authority citation for part 200, subpart A, continues to read in
part as follows:
Authority: 15 U.S.C. 77o, 77s, 77sss, 78d, 78d-1, 78d-2, 78w,
78ll(d), 78mm, 80a-37, 80b-11, and 7202 unless otherwise noted.
* * * * *
0
2. Section 200.30-3 is amended by revising paragraph (a)(17)(ii) to
read as follows:
Sec. 200.30-3 Delegation of authority to Director of Division of
Trading and Markets.
* * * * *
(a) * * *
(17) * * *
(ii) To grant exemptions upon specified terms, conditions, and
periods, for classes of persons subject to Rule 17f-2 pursuant to Rule
17f-2(a)(2) (Sec. 240.17f-2(a)(2) of this chapter).
* * * * *
Dated: October 26, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-28313 Filed 11-1-11; 8:45 am]
BILLING CODE 8011-01-P