[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]
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SECURITIES AND EXCHANGE COMMISSION
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.
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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.
FOR FURTHER INFORMATION CONTACT: John Livornese, FOIA/PA Officer,
Office of FOIA Services, (202) 551-3831; Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-5041.
SUPPLEMENTARY INFORMATION:
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\
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\1\ See 52 FR 10011 (March 27, 1987).
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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\
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\2\ Id. at 10015.
\3\ Id. at 10018.
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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\
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\4\ Id.
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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\
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\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
200.80(e)(9)(i).
\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.
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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.
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\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
200.80(e)(10).
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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\
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\8\ Independent agencies comparable to the SEC (FDIC, CFTC and
FTC) have 30 day appeals time frames.
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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
competition.
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
certification.
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\
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\9\ 5 U.S.C. 801, et seq.
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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.
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\10\ 44 U.S.C. 3501-3520.
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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:
PART 200--ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND
REQUESTS
Subpart D--Information and Requests
0
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.
* * * * *
0
2. Amend Sec. 200.80 by:
0
a. Revising paragraph (d)(5)(i);
0
b. Revising paragraphs (d)(6)(i) and (d)(6)(ii);
0
c. Revising paragraph (e) introductory text; and
0
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
(d)(6)(i).
(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.
* * * * *
0
3. Amend Sec. 200.80e by:
0
a. Adding introductory text; and
0
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]
BILLING CODE 8011-01-P