[Federal Register Volume 79, Number 124 (Friday, June 27, 2014)]
[Proposed Rules]
[Pages 36443-36445]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-14979]



17 CFR Part 200

[Release No. 34-72440; File No. S7-07-14]
RIN 3235-AL58

Freedom of Information Act Regulations: Fee Schedule, Addition of 
Appeal Time Frame, and Miscellaneous Administrative Changes

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.


SUMMARY: The Securities and Exchange Commission (``Commission'' or 
``SEC'') is publishing for comment proposed amendments to the 
Commission's regulations under the Freedom of Information Act 
(``FOIA'') to allow the Commission to collect fees that reflect its 
actual costs, add an appeals time frame that will create a more 
practical and systematic administrative process and clarify other 
issues in the regulations. The proposed amendments provide a formula 
for fees charged to FOIA requesters; incorporate a time frame in which 
a FOIA requester must file an appeal in the event a request or a 
portion thereof is denied; allow for submission of FOIA appeals by 
email or facsimile; and allow the Office of FOIA Services to issue 
responses to FOIA requests indicating that no records were located.

DATES: Comments should be received by July 28, 2014.

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);
     Send an email to [email protected]. Please include 
File Number S7-07-14 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 to Secretary, Securities and Exchange 
Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number S7-07-14. This file number 
should be included on the subject line if email 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 Web site viewing and printing in the 
Commission's Public Reference Room, 100 F Street NE., Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. 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.

Office of FOIA Services, (202) 551-3831; Securities and Exchange 
Commission, 100 F Street NE., Washington, DC 20549-5041.


1. Purpose

    The Commission is proposing to amend its FOIA regulations at 17 CFR 
200.80 and 17 CFR 200.80e.

A. Proposed Changes to Fee Regulations

    The fees the Commission charges for searching, reviewing, and 
duplicating records pursuant to FOIA requests are currently set forth 
in 17 CFR 200.80e, Appendix E--Schedule of fees for records services. 
The Commission believes it is appropriate to update its fee schedule 
for searching and reviewing records in accordance with Uniform Freedom 
of Information Act Fee Schedule and Guidelines promulgated by the 
Office of Management and Budget.\1\

    \1\ See 52 FR 10011 (March 27, 1987).

    The OMB Guidelines, in complying with the Freedom of Information 
Reform Act of 1986, require that each agency's fees be based upon its 
``direct reasonable operating costs of providing FOIA services.'' \2\ 
The guidelines state that ``[a]gencies should charge fees that recoup 
the full allowable direct costs they incur.'' \3\

    \2\ Id. at 10015.
    \3\ Id. at 10018.

    OMB recognized that costs would necessarily vary from agency to 
agency and directed that each agency promulgate regulations specifying 
the charges for search, review, and duplication. The OMB Guidelines 
state that ``agencies should charge at the salary rate[s] [i.e. basic 
pay plus 16 percent] of the employee[s] making the search'' or, ``where 
a homogeneous class of personnel is used exclusively . . . agencies may 
establish an average rate for the range of grades typically involved.'' 

    \4\ Id.

    The Commission's current regulation contains set rates for FOIA 
request search and review activities: $16/hour for grade 11 and below; 
and $28/hour for grade 12 and above. The Commission is proposing to 
revise its regulation to reflect the formula contained in the OMB 
Guidelines (basic pay plus 16 percent) rather than setting forth a 
fixed price. Moreover, the proposed regulation provides that the 
Commission will establish a representative rate for each of the three 
different groups of grades typically involved: Personnel in grades SK 8 
or below; personnel in grades SK 9 to 13; and personnel in grades SK 14 
or above.\5\ The Commission's Web site will contain current rates for 
search and review fees for each class. The rates will be updated as 
salaries change and will be determined by using the formula in the 
regulation. For the current calendar year, the fees would be assessed 
as follows: SK-8 or below: $29/hour; SK-9 to 13: $61/hour; and SK-14 or 
above: $89/hour.\6\

    \5\ As per the OMB Guidelines, fees for searches of computerized 
records will continue to be based on the actual cost to the 
Commission which includes machine and operator time. 17 CFR 
    \6\ The SK-8 and below rate is estimated using the maximum and 
minimum annual salary of a Washington, DC-based SK-6 staffer. For 
2014 this is [($41,619 + $63,307)/2][1/2087 hours per year][1.16 OMB 
markup factor] = $29 per hour. Similarly, the SK-9 through SK-13 
category is estimated by using the max and min annual salary of a 
Washington, DC-based SK-12 staffer, who typically does most of the 
work of a FOIA request. For 2014 this is [($82,037 + $138,211)/2][1/
2087 hours/year][1.16 OMB markup factor] = $61/hour. Finally, the 
SK-14 and above category is estimated by using the max and min 
salary of a Washington, DC-based SK-15 supervisor. For 2014 this is 
[($118,743 + $200,033)/2][1/2087 hours per year][1.16 OMB markup 
factor] = $89/hour.

    In connection with this revision, the Commission is also proposing 
to remove the first sentence of 17 CFR 200.80(e)(1) which provides that 
up to one-half hour of staff time devoted to searching for and 
reviewing Commission records will

[[Page 36444]]

be provided without charge. The regulation as amended will allow the 
Commission to charge FOIA requesters in quarter-hour increments at the 
rates established by reference to the OMB Guidelines. Presently, the 
Commission estimates the time spent processing a single FOIA request at 
approximately 1\1/2\ hours at an estimated cost of $42. If the 
regulations are amended to reflect the formula contained in the OMB 
Guidelines as discussed above, the average cost per request would 
increase to approximately $92.\7\ This cost is estimated by utilizing 
the hourly rate of pay of a Washington, DC-based SK-12 employee, which 
is the typical employee who currently does most of the work in 
processing a FOIA request.

    \7\ All fees will be charged in accordance with the categories 
of FOIA requesters as set forth in 5 U.S.C. 552(a)(4)(A)(ii), 17 CFR 

    The proposed fee regulation provides, fees will not be charged 
under either the FOIA or the Privacy Act where the costs of collecting 
and processing the fee are likely to equal or exceed the amount of the 
fee or where the requester has met the requirements for a statutory fee 
waiver. The proposed language is based upon the language of 5 U.S.C. 
552(a)(4)(A)(iv) (providing that no fee may be charged if the fee 
exceeds the costs of collecting and processing the fee). Currently, the 
cost of the average fee collection activity is $20, so no fee will be 
charged of $20 or less.

B. Proposed Changes to FOIA Appeals Time Frames

    The FOIA requires federal agencies to notify requesters of their 
right to appeal any adverse determination. 5 U.S.C. 552(a)(6)(A)(i). 
The Commission's regulations currently provide no time frame in which a 
FOIA requester must file an appeal. Although the FOIA does not require 
agencies to establish an appeals time frame, neither does it preclude 
them from doing so. The proposed amendment would establish an appeals 
time frame of 30 days, which is appropriate in order to allow for more 
efficient and improved appeals processing by the Commission's Office of 
the General Counsel. In addition, the implementation of an appeals time 
frame is consistent with the practices of other federal agencies. Our 
staff has reviewed the practices at the 15 United States federal 
executive departments. Of these, seven have a FOIA appeals time frame 
of 30 days, five have a 60 day time frame, one has a 35 day time frame, 
one has a 45 day time frame and one has a 90 day time frame.\8\

    \8\ Independent agencies comparable to the SEC (FDIC, CFTC and 
FTC) have 30 day appeals time frames.

C. Submission of FOIA Appeals by Email and Facsimile

    The Commission is revising 17 CFR 200.80(d)(6)(ii) to allow appeals 
to be submitted by facsimile or email as well as through the mail.

D. Responses to FOIA Requests Indicating No Records Could Be Located

    The Commission's current regulations do not provide for responses 
to FOIA requests that indicate that no responsive records were located. 
The proposed amendment would make clear that a possible response to a 
FOIA request is that no responsive records were located.

Request for Comments

    We request and encourage any interested person to submit comments 
on any aspect of the proposals, other matters that might have an impact 
on the amendments and any suggestions for additional changes. With 
regard to any comments, we note that such comments are of particular 
assistance to us if accompanied by supporting data and analysis of the 
issues addressed in those comments. We urge commenters to be as 
specific as possible.

Economic Analysis

    The Commission is sensitive to the economic effects, including the 
costs and benefits, that result from its rules, and 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. As discussed further 
below, the Commission preliminarily believes that the proposed rules 
will have a minimal economic effect.
    The proposed rules are intended to help align the Commission's fees 
related to FOIA requests with its direct reasonable operating costs of 
providing FOIA services and to allow more efficient processing of 
requests. Although the proposed rules are unlikely to have a 
significant impact on the economy, the Commission believes that the 
rules will benefit the Commission and the public. Compared to the 
baseline, which includes the current fee structure outlined above, the 
proposed rules will permit the Commission to charge fees that more 
closely reflect the direct costs the Commission incurs to provide FOIA 
services. Additionally, the proposed rules will provide increased 
flexibility to FOIA requesters by expressly permitting appeals by email 
and facsimile. By establishing a time frame for FOIA appeals that, in 
light of potential alternatives, is consistent with the practice of 
other federal agencies, the proposed rules will also improve efficiency 
in the appeal process.
    The Commission recognizes, however, that the proposed rules may 
also impose costs. Specifically, the proposed rules may impose 
additional costs on individuals who wish to obtain access to Commission 
records and may impose a burden on requesters who would be required to 
appeal a decision within 30 days. But, as discussed elsewhere, the 
Commission believes that those costs would be insignificant. 
Additionally, the Commission preliminarily believes that the proposed 
rules will not burden competition and that any potential burden on 
competition imposed by the proposed rules would be appropriate in 
furtherance of purposes of the Exchange Act.
    The Commission requests comment on all aspects of the benefits and 
costs of the proposal, including any anticipated impacts on 

Regulatory Flexibility Act Certification

    Section 3(a) of the Regulatory Flexibility Act of 1980 (``RFA'') 
requires the Commission to undertake an initial regulatory flexibility 
analysis of the proposed rule amendments on small entities unless the 
Commission certifies that the proposal, if adopted, would not have a 
significant economic impact on a substantial number of small entities. 
The overwhelming majority of FOIA requests made to the Commission 
involve either no charge or the charges apply to just six companies, 
none of which appear to be small entities. Generally, increases in the 
average cost will be from $0 to approximately $31 for requests that 
take one-half hour to process and $42 to approximately $92 for those 
that take 1\1/2\ hours to process. Pursuant to 5 U.S.C. 605(b), the 
Commission certifies that the proposed amendments will not have a 
significant economic effect on a substantial number of small entities. 
The Commission requests comments regarding the appropriateness of its 

Other Administrative Law Matters

    Because these amendments are generally rules of agency 
organization, procedure and practice that do not substantially affect 
the rights and obligations of non-agency parties, the Congressional 
Review Act does not apply.\9\

    \9\ 5 U.S.C. 801, et seq.

    These amendments do not contain any collection of information 
requirement as defined by the Paperwork Reduction Act of 1995, as

[[Page 36445]]

amended.\10\ The Commission solicits comment on whether the proposed 
amendments would be ``major'' as defined in 5 U.S.C. 804.

    \10\ 44 U.S.C. 3501-3520.

Statutory Authority and Text of Proposed Rule Amendments

    The amendments contained herein are being proposed under the 
authority set forth in 5 U.S.C. 552 and 15 U.S.C. 78d-1.

List of Subjects in 17 CFR Part 200

    Administrative practice and procedure, Freedom of information.

Text of Proposed Amendments

    For the reasons stated in the preamble, the Commission proposes to 
amend 17 CFR part 200, subpart D as follows:


Subpart D--Information and Requests

1. The authority citation for part 200, subpart D, is revised to read, 
in part, as follows:

    Authority: 5 U.S.C. 552, as amended, 15 U.S.C. 77f(d), 77s, 
77ggg(a), 77sss, 78m(F)(3), 78w, 80a-37, 80a-44(a), 80a-44(b), 80b-
10(a), and 80b-11, unless otherwise noted.
* * * * *
2. Amend Sec.  200.80 by:
a. Revising paragraph (d)(5)(i);
b. Revising paragraphs (d)(6)(i) and (d)(6)(ii);
c. Revising paragraph (e) introductory text; and
d. Removing the first sentence of paragraph (e)(1).
    The revisions read as follows:

Sec.  200.80  Commission records and information.

* * * * *
    (d) * * *
    (5) Initial determination; multi-track processing, and denials--(i) 
Time within which to respond. When a request complies with the 
procedures in this section for requesting records under the Freedom of 
Information Act, a response shall be sent within 20 business days from 
the date the Office of FOIA Services receives the request, except as 
described in paragraphs (d)(5)(ii) and (d)(5)(iii) of this section. If 
that Office cannot locate any requested records, the response shall 
advise the requester accordingly.
* * * * *
    (6) * * *
    (i) Time limits and content of appeal. Appeals shall be clearly and 
prominently identified at the top of the first page with the legend 
``Freedom of Information Act Appeal'' and shall provide the assigned 
request number. Copies of the request and the SEC's response, if any, 
should be included with the appeal. If an appeal is from an adverse 
decision, it must be received within thirty (30) calendar days of the 
date of the adverse decision. If only a portion of the decision is 
appealed, the requester must specify which part of the decision is 
being appealed. An appeal from an adverse decision should also identify 
the name of the deciding official, the date of the decision, and the 
precise subject matter of the appeal. An appeal is not perfected until 
the SEC receives the information identified in this paragraph 
    (ii) How to file and address a written appeal. The appeal must be 
sent to both the General Counsel and the Office of FOIA Services at 100 
F Street NE., Washington, DC 20549. The SEC accepts facsimiles (faxes) 
and emails as written FOIA appeals. Information regarding where to fax 
or email a FOIA appeal is available on the SEC's FOIA home page on the 
Commission's Web site at http://www.sec.gov/foia.shtml. A legible 
return address must be included with the FOIA appeal. The requester may 
also include other contact information, such as a telephone number and/
or an email address.
* * * * *
    (e) Fees for records services. Information pertaining to search and 
review services, including locating, reviewing, and making records 
available, attestations and copying, appears in appendix E to this 
subpart D, 17 CFR 200.80e. A schedule of fees is located at the 
Commission's Web site at http://www.sec.gov/foia/feesche.htm.
* * * * *
3. Amend Sec.  200.80e by:
a. Adding introductory text; and
b. Revising the paragraph that begins, ``Search and review services:''.
    The addition and revision read as follows:

Sec.  200.80e  Appendix E--Schedule of fees for records services.

    The requester will be charged search, review, and duplication fees 
according to his or her fee category. In addition, the SEC will charge 
the requester for any special handling or services performed in 
processing the request and/or appeal. Duplication fees also are 
applicable to records provided in response to requests made under the 
Privacy Act. Fees will not be charged under either the FOIA or the 
Privacy Act where the costs of collecting and processing the fee are 
likely to equal or exceed the amount of the fee or where the requester 
has met the requirements for a statutory fee waiver. Fees will be 
determined as follows:
    Search and review services (review applies to commercial-use 
requesters only): (1) The Commission will establish and charge average 
rates for the groups of grades typically involved in search and review. 
Those groups will consist of employees at:
    (i) Grades SK-9 or below;
    (ii) Grades SK-10 to SK-14; and
    (iii) Grades SK-15 or above.
    (2) The average rates will be based on the hourly salary (i.e., 
basic salary plus locality payment), plus 16 percent for benefits, of 
employees who routinely perform those services. Fees will be charged in 
quarter-hour increments. The average hourly rates are listed on the 
Commission's Web site at http://www.sec.gov/foia/feesche.htm and will 
be updated as salaries change.
* * * * *

    Dated: June 20, 2014.

    By the Commission.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-14979 Filed 6-26-14; 8:45 am]