[Federal Register Volume 78, Number 148 (Thursday, August 1, 2013)]
[Rules and Regulations]
[Pages 46498-46499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-18468]



17 CFR Part 200

[Release No. 34-70049]

Delegation of Authority to Director of the Division of 

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.


SUMMARY: The Securities and Exchange Commission (``Commission'') is 
amending its rules to delegate to the Director of the Division of 
Enforcement the authority to appoint distribution fund administrators 
in enforcement administrative proceedings from a Commission-approved 
pool of administrators, and to set the amount of, or waive for good 
cause shown, the administrator's bond required by Rule 1105(c) of the 
Commission's rules on Fair Fund and Disgorgement Plans.

DATES: Effective Date: August 1, 2013.

FOR FURTHER INFORMATION CONTACT: Nancy Chase Burton, 202-551-4425, 
Office of Distributions, Division of Enforcement, Securities and 
Exchange Commission, 100 F Street NE., Washington, DC 20549-6553.

SUPPLEMENTARY INFORMATION: In administrative proceedings instituted by 
the Commission to enforce the federal securities laws, the Commission, 
in the exercise of its discretion, seeks to distribute amounts 
collected as disgorgement, prejudgment interest, and penalties to 
investor victims. The federal securities laws authorize the Commission 
in administrative proceedings to establish disgorgement and other funds 
to accomplish this goal. See, e.g., Section 308(a) of the Sarbanes-
Oxley Act of 2002, 15 U.S.C. 7261; Sections 21B(e) and 21C(e) of the 
Securities Exchange Act (``Exchange Act''), 15 U.S.C. 78u-2(e) and 78u-
3(e). According to the Commission's regulations, the ``Commission or 
[a] hearing officer shall have discretion to appoint any person, 
including a Commission employee, as administrator of a plan of 
disgorgement or a Fair Fund plan and to delegate to that person 
responsibility for administering the plan.'' Rule 1105(a), 17 CFR 
201.1105(a). To improve the efficiency of the Commission's distribution 
processes, and to centralize certain distribution-related functions 
within the Division of Enforcement, the Commission is formally 
delegating to the Director of the Division of Enforcement the authority 
to appoint certain persons as plan administrators if the person to be 
appointed is included in the Commission's approved pool of qualified 
administrators.\1\ The Commission is also delegating to the Director, 
when the Director appoints an administrator pursuant to this 
delegation, the authority to set the amount of, or waive for good cause 
shown, the administrator's bond required by Rule 1105(c), 17 CFR 
201.1105(c), of the Commission's rules on Fair Fund and Disgorgement 

    \1\ On July 15, 2013, the Commission approved a pool of nine 
firms from which future fund administrators will be appointed to 
administer the distribution of disgorgement or fair funds. Each 
administrator in the pool will be evaluated annually by the Office 
of Distributions and, if performance is deemed in compliance with 
the requirements for selection, will be continued in the pool for 
another year, up to a total of five years, at which time a selection 
process for a new pool will take place. Beginning six months after 
approval of the delegation and every six months thereafter, the 
Office of Distributions must provide the Commission with a 
memorandum discussing the implementation of the delegation and 
issues relevant to the Commission's evaluation of the distribution 
processes. In particular, each memorandum must include (i) a list of 
all distributions assigned to pool participants at that time; (ii) 
the stage of each such distribution; and (iii) the Office of 
Distributions' evaluation of each administrator responsible for the 
distributions. Each memorandum must also discuss, as data becomes 
available, the following: (i) whether the delegation has resulted in 
lower cost of distributions; (ii) whether the delegation has 
resulted in a greater percentage of funds from the distribution 
funds being returned to harmed investors; and (iii) whether the 
delegation has resulted in more timely and efficient distributions. 
The Office of Distributions must follow these procedures in 
connection with the delegation authority.

    If the Division Director deems it appropriate, a recommendation to 
appoint an administrator from the qualified pool or to set the amount 
of, or waive for good cause shown, any administrator's bond may be 
submitted to the Commission for review.
    Administrative Law Matters:
    The Commission finds, in accordance with the Administrative 
Procedure Act (``APA'') 5 U.S.C. 553(b)(3)(A), that this amendment 
relates solely to agency organization, procedure, or practice, and does 
not relate to a substantive rule. Accordingly, the provisions of the 
APA regarding notice of rulemaking, opportunity for public comment, and 
publication of the amendment prior to its effective date are not 
applicable. For the same reason, and because this amendment does not 
substantively affect the rights or obligations of non-agency parties, 
the provisions of the Small Business Regulatory Enforcement Fairness 
Act, 5 U.S.C. 804(3)(C), are not applicable. Additionally, the 
provisions of the Regulatory Flexibility Act, which apply only when 
notice and comment are required by the APA or other law, 5 U.S.C. 603, 
are not applicable. Further, because this amendment imposes no new 
burdens on private persons, the Commission does not believe that the 
amendment will have any anti-competitive effects for purposes of 
Section 23(a)(2) of the Exchange Act, 15 U.S.C. 78w(a)(2). Finally, 
this amendment does not contain any collection of information 
requirements as defined by the Paperwork Reduction Act of 1980, as 
amended. Accordingly, the amendment is effective [insert date of 
Federal Register publication].

List of Subjects in 17 CFR Part 200

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

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 46499]]


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, 7202, and 7211 et seq., unless 
otherwise noted.
* * * * *

2. Section 200.30-4 is amended by adding paragraph (a)(17) to read as 

Sec.  200.30-4  Delegation of authority to Director of Division of 

* * * * *
    (a) * * *
    (17) With respect to disgorgement and Fair Fund plans established 
in administrative proceedings instituted by the Commission pursuant to 
the federal securities laws, to appoint a person as a plan 
administrator, if that person is included in the Commission's approved 
pool of administrators, and, for an administrator appointed pursuant to 
this delegation, to set the amount of or waive for good cause shown, 
the administrator's bond required by Sec.  201.1105(c) of this chapter.
* * * * *

    By the Commission.

    Dated: July 26, 2013.
Elizabeth M. Murphy,
[FR Doc. 2013-18468 Filed 7-31-13; 8:45 am]