[Federal Register Volume 80, Number 192 (Monday, October 5, 2015)]
[Proposed Rules]
[Pages 60091-60107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-24707]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 201

[Release No. 34-75976; File No. S7-18-15]
RIN 3235-AL87


Amendments to the Commission's Rules of Practice

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
proposing for public comment amendments to update its Rules of Practice 
to, among other things, adjust the timing of hearings in administrative 
proceedings; allow for discovery depositions; clarify the rules for 
admitting hearsay and assertion of affirmative defenses; and make 
certain related amendments.

DATES: Comments should be received on or before December 4, 2015.

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); or
     Send an email to [email protected]. Please include 
File Number S7-18-15 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 S7-18-15. 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 of submission. 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 in submissions. 
You should submit only information that you wish to make available 
publicly.

FOR FURTHER INFORMATION CONTACT: Adela Choi, Senior Counsel, and Laura 
Jarsulic, Associate General Counsel, Office of the General Counsel, 
(202) 551-5150, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549.

SUPPLEMENTARY INFORMATION: The Commission proposes to amend its Rules 
of Practice. The amendments are being proposed to update its existing 
rules.

I. Introduction

    As it has done from time to time, the Commission proposes to amend 
its Rules of Practice.\1\ The Commission proposes amendments to update 
the Rules of Practice to adjust the timing of hearings and other 
deadlines in administrative proceedings and to provide parties in 
administrative proceedings with the ability to use depositions and 
other discovery tools. The Commission proposes additional amendments to 
implement the newly available discovery tools. These proposed Rules are 
intended to introduce additional flexibility into administrative 
proceedings, while still providing for the timely and efficient 
disposition of proceedings. The Commission also proposes amendments to 
clarify certain other Rules, including the assertion of affirmative 
defenses in answers and the admissibility of hearsay.
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    \1\ See, e.g., Rules of Practice, Exchange Act Release No. 
35833, 60 FR 32738 (June 9, 1995); Rules of Practice, Exchange Act 
Release No. 40636, 63 FR 63404 (Nov. 4, 1998); Rules of Practice, 
Exchange Act Release No. 48018, 68 FR 35787 (June 11, 2003); 
Adoption of Amendments to the Rules of Practice and Delegations of 
Authority of the Commission, Exchange Act Release No. 49412, 69 FR 
13166 (Mar. 12, 2004); Adoption of Amendments to the Rules of 
Practice and Related Provisions and Delegations of Authority of the 
Commission, Exchange Act Release No. 52846, 70 FR 72566 (Dec. 5, 
2005); Rules of Practice, Exchange Act Release No. 63723, 76 FR 4066 
(Jan. 24, 2011).
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II. Discussion of Proposed Amendments

    The proposed amendments are as follows:

A. Proposed Amendments to Rule 360

    Rule 360 \2\ sets forth timing for certain stages of an 
administrative proceeding. These stages include a prehearing period, a 
hearing, a period during which parties review hearing transcripts and

[[Page 60092]]

submit briefs, and then a deadline by which the hearing officer must 
file an initial decision with the Office of the Secretary. Under 
current Rule 360, the deadlines for these stages are calculated from 
the date of service of an order instituting proceedings. Initial 
decisions must be filed within the number of days prescribed in the 
order instituting proceedings--120, 210, or 300 days from the date of 
service of the order instituting proceedings. Broadly speaking, 
administrative proceedings instituted pursuant to Section 12(j) of the 
Exchange Act \3\ are designated as 120-day cases, administrative 
proceedings seeking sanctions as a result of an injunction or 
conviction \4\ are designated as 210-day cases, and administrative 
proceedings alleging violations of the securities laws are designated 
as 300-day cases. Because deadlines are calculated from the date of 
service of the order instituting proceedings, if there are delays early 
on in the proceeding, the hearing occurs later and the hearing officer 
then has less time to prepare an initial decision in advance of the 
Rule 360 deadline.
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    \2\ 17 CFR 201.360.
    \3\ 15 U.S.C. 78l(j).
    \4\ See, e.g., 15 U.S.C. 78o(b)(6); 15 U.S.C. 80b-3(f).
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    The amount of time for parties to prepare during the prehearing 
period may vary from case to case with the number of factual and legal 
allegations, the complexity of the claims and defenses, and the size of 
the record. Parties in 300-day cases, for example, have increasingly 
requested extensions of time to review investigative records and 
prepare for hearing, citing the volume and time it takes to load and 
then review electronic productions. Parties in such cases frequently 
file motions before the hearing officer or the Commission to resolve 
complicated issues prior to the hearing. In addition, the Chief 
Administrative Law Judge has sought several extensions of time for 
hearing officers to file initial decisions in more complicated 300-day 
cases.\5\
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    \5\ See, e.g., Natural Blue Resources, Inc., et al., Exchange 
Act Release No. 74891 (May 6, 2015) (order granting extension); 
Lawrence M. Labine, Exchange Act Release No. 74883 (May 6, 2015) 
(same); Total Wealth Management, Inc., et al., Exchange Act Release 
No. 74353 (Feb. 23, 2015) (same); Donald J. Anthony, Jr., et al., 
Exchange Act Release No. 74139 (Jan. 26, 2015) (order granting 
second motion for extension).
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    As amended, Rule 360 would include three modifications to address 
the timing of a proceeding. First, the deadline for filing the initial 
decision would run from the time that the post-hearing briefing or 
briefing of dispositive motions or defaults has been completed, rather 
than the date of service of the order instituting proceedings. This 
modification would divorce the deadline for the completion of an 
initial decision from other stages of the proceeding. Under the 
proposed amendment, the deadlines for initial decisions that would be 
designated in orders instituting proceedings would be 30, 75, and 120 
days from the completion of post-hearing or dispositive briefing. The 
proposed length of time afforded for the preparation of an initial 
decision in each type of proceeding would be the same as the amount of 
time hearing officers are afforded under current Rule 360, if a 
proceeding actually progresses according to the timeline set out in the 
current rule.
    Second, amended Rule 360 would provide a range of time during which 
the hearing must begin. For example, in 300-day cases, current Rule 360 
states that a hearing should occur within approximately four months. 
The amended rule would provide that the hearing must be scheduled to 
begin approximately four months after service of the order instituting 
proceedings, but not later than eight months after service of the 
order.\6\ Significantly, the amendment doubles the maximum length of 
the current rule's prehearing period. This is intended to provide 
additional flexibility during the prehearing phase of a proceeding and 
afford parties sufficient time to conduct deposition discovery pursuant 
to new proposed rules, while retaining an outer time limit to ensure 
the timely and efficient resolution of the proceeding. It also would 
allow respondents more time to review electronic documents in cases 
involving an electronic production from the Division.
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    \6\ As amended, Rule 360 would retain the same amount of time as 
current Rule 360 for parties to obtain the transcript of the hearing 
and submit post-hearing briefs--approximately two months.
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    Third, amended Rule 360 would create a procedure for extending the 
initial decision deadline by up to thirty days. This extension is 
intended to complement the Chief Law Judge's ability under current Rule 
360 to request extensions of time from the Commission. Under amended 
Rule 360, the hearing officer may certify to the Commission in writing 
the need to extend the initial decision deadline by up to thirty days 
for case management purposes. This certification would need to be 
issued at least thirty days before the expiration of the initial 
decision deadline and the proposed extension would take effect if the 
Commission does not issue an order to the contrary within fourteen days 
after receiving the certification.
    This procedure for extending the initial decision deadline by a 
thirty-day period is intended to promote effective case management by 
the hearing officers. For example, for a hearing officer faced with 
several initial decision deadlines in the same week, a thirty-day 
extension would provide flexibility to stagger the deadlines. The 
amended rule would retain the provision allowing the Chief Law Judge to 
request an extension of any length from the Commission, without regard 
to whether a hearing officer has already sought to extend the deadline.
    We seek comments about the amount of time proposed for each phase 
of the proceeding, including the eight-month cap on the prehearing 
period for cases with the longest initial decision deadlines, the time 
allotted for post-hearing briefing, and the time provided for the 
hearing officer to prepare an initial decision.

B. Proposed Amendments to Rule 233

    Rule 233 \7\ currently permits parties to take depositions by oral 
examination only if a witness will be unable to attend or testify at a 
hearing. The proposed amendment would allow respondents and the 
Division to file notices to take depositions. If a proceeding involves 
a single respondent, the proposed amendment would allow the respondent 
and the Division to each file notices to depose three persons (i.e., a 
maximum of three depositions per side) in proceedings designated in the 
proposal as 120-day cases (known as 300-day cases under current Rule 
360). If a proceeding involves multiple respondents, the proposed 
amendment would allow respondents to collectively file notices to 
depose five persons and the Division to file notices to depose five 
persons in proceedings designated in the proposal as 120-day cases 
(i.e., a maximum of five depositions per side).\8\ Under the amendment, 
parties also could request that the hearing officer issue a subpoena 
for documents in conjunction with the deposition.
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    \7\ 17 CFR 201.233.
    \8\ The provision in current Rule 233 that allows for 
depositions when a witness is unable to attend or testify at a 
hearing has been preserved under the amended rule as Rule 233(b). 
Depositions requested under new Rule 233(b) would not count against 
the per-side limit on discovery depositions under new Rule 233(a).
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    The proposed amendment is intended to provide parties with an 
opportunity to develop arguments and defenses through deposition 
discovery, which may narrow the facts and issues to be explored during 
the hearing. Allowing depositions should facilitate the

[[Page 60093]]

development of the case during the prehearing stage, which may 
ultimately result in more focused prehearing preparations, with issues 
distilled for the hearing and post-hearing briefing.
    We recognize that additional time during the prehearing stage of 
the proceeding would facilitate the effective use of depositions for 
discovery. As a result, we have proposed amendments to Rule 360, 
discussed above, that provide additional flexibility over deadlines 
during the prehearing discovery period of a proceeding, permitting the 
hearing to begin up to eight months after service of the order 
instituting proceedings. We anticipate that four to eight months would 
be a sufficient amount of time for parties to prepare for the hearing, 
review documents, and take up to three depositions per side in a 
single-respondent proceeding, and up to five depositions per side in a 
multiple-respondent proceeding. In selecting this increased amount of 
time and number of depositions permitted, we intend to provide parties 
with the potential benefits of this discovery tool, without sacrificing 
the public interest in resolving administrative proceedings promptly 
and efficiently.
    We propose additional amendments to Rule 233 to guide the use of 
depositions for discovery purposes. The amendments would allow the 
issuance of subpoenas to order a witness to attend a deposition noticed 
by a party pursuant to Rule 233, and would not preclude the deposition 
of a witness if the witness testified during an investigation. Notices 
of depositions also would be served on each party pursuant to Rule 150 
and would need to be consistent with the prehearing conference and the 
hearing officer's scheduling order.
    Other proposed amendments to Rule 233 would outline procedures for 
deposition practice that are consistent with the Federal Rules of Civil 
Procedure.\9\ For example, the amendments would be consistent with 
federal rules on the location of the depositions; the method of 
recording; the deposition officer's duties; examination and cross-
examination of the witness; forms of objections and waiver of 
objections; motions to terminate or limit depositions; review of the 
transcript or recording by the witness; certification and delivery of 
the deposition; attachment of documents and tangible things; and copies 
of the transcript or recording. We would retain current Rule 233's 
explicit statement that a witness being deposed may have counsel during 
the deposition.
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    \9\ See generally Federal Rules of Civil Procedure 45(c), 30(b), 
(d), (e), and (f); but see Federal Rule of Civil Procedure 30(c) 
(limiting depositions to seven hours instead of the six hours 
proposed in the amendment to Rule 233). While the Federal Rules of 
Civil Procedure are tailored for use in the federal court system, 
they represent a well-settled body of procedural rules familiar to 
practitioners. We have borrowed from those rules, but we have also 
made changes or declined to follow the Federal Rules of Civil 
Procedure where appropriate to tailor those rules to our own 
administrative forum.
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    We seek comments about the proposed structure of the amendments 
that provide for depositions, including the number of depositions 
allowed in single-respondent and multiple-respondent proceedings.

C. Proposed Amendments To Support Amended Rule 233

    We also propose amendments to Rules 180,\10\ 221,\11\ 232,\12\ and 
234 \13\ to support the purpose and intent of the proposed amendments 
to Rule 233. These amendments are based on the expectation that 
depositions would play an increased role in the prehearing stage of 
administrative proceedings, and adjust other rules accordingly.
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    \10\ 17 CFR 201.180.
    \11\ 17 CFR 201.221.
    \12\ 17 CFR 201.232.
    \13\ 17 CFR 201.234.
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    Rule 180 allows the Commission or a hearing officer to exclude a 
person from a hearing or conference, or summarily suspend a person from 
representing others in a proceeding, if the person engages in 
contemptuous conduct before either the Commission or a hearing officer. 
The exclusion or summary suspension can last for the duration or any 
portion of a proceeding, and the person may seek review of the 
exclusion or suspension by filing a motion to vacate with the 
Commission. We propose to amend Rule 180 to allow the Commission or a 
hearing officer to exclude or summarily suspend a person for any 
portion of a deposition, as well as the proceeding, a conference, or a 
hearing for contemptuous conduct. The person would have the same right 
to review of the exclusion or suspension by filing a motion to vacate 
with the Commission.
    Rule 221 sets forth the purposes of a prehearing conference and 
includes a list of the subjects to be discussed. We propose amendments 
to Rule 221 to add depositions and expert witness disclosures or 
reports to the list of subjects to be discussed at the prehearing 
conference. Under the current rule, the list of subjects for discussion 
at the prehearing conference covers most other significant aspects of 
the prehearing period. By adding depositions and the timing of expert 
witness disclosure to that list, the proposed amendment recognizes the 
impact that depositions and other discovery tools may have on the 
development of a schedule that makes efficient use of time during the 
prehearing period and the proceeding more broadly. It also conforms to 
the proposed amendment to Rule 233, which would require notices of 
depositions to be consistent with the prehearing conference and the 
hearing officer's scheduling order.
    Rule 232 sets forth standards for the issuance of subpoenas and 
motions to quash. With the proposed amendments, Rule 232(a) would make 
clear that parties may request the issuance of a subpoena in connection 
with a deposition permitted under Rule 233, and Rule 233(e) would allow 
any person to whom a notice of deposition is directed to request that 
the notice of deposition be quashed. This proposed amendment is 
intended to promote efficiency in the discovery process because it 
would allow persons who are noticed for depositions to move to quash at 
the notice stage, rather than waiting for a party to request the 
issuance of a subpoena to order attendance.
    We also propose to amend the standards governing applications to 
quash or modify subpoenas. Rule 232(e)(2) provides that the hearing 
officer or the Commission shall quash or modify a subpoena, or order 
return upon specified conditions, if compliance with the subpoena would 
be unreasonable, oppressive or unduly burdensome. As amended, Rule 
232(e)(2) would provide that the hearing officer or Commission shall 
quash or modify a subpoena or notice of deposition, or order return 
upon specified conditions, if compliance with the subpoena would be 
unreasonable, oppressive, unduly burdensome, or would unduly delay the 
hearing. This amendment would require the hearing officer or Commission 
to consider the delaying effect of compliance with a subpoena or notice 
of deposition as part of the motion to quash standard and is intended 
to promote the efficient use of time for discovery during the 
prehearing period.
    Finally, we propose to amend Rule 232(e) to add a new provision 
that specifies an additional standard governing motions to quash 
depositions noticed or subpoenaed pursuant to Rule 233(a), as amended. 
Under new Rule 232(e)(3), the hearing officer or Commission would quash 
or modify a deposition notice or subpoena filed or issued under Rule 
233(a) unless the requesting party demonstrates that the

[[Page 60094]]

deposition notice or subpoena satisfies the requirements under Rule 
233(a). This is intended to ensure that parties notice the correct 
number of depositions pursuant to Rule 233(a) and follow other 
requirements of that rule.
    Rule 232(e)(3) also would require the party requesting the 
deposition to demonstrate that the proposed deponent is a fact 
witness,\14\ a designated expert witness under Rule 222(b), or a 
document custodian.\15\ This provision is intended to foster use of 
depositions where appropriate and encourage meaningful discovery, 
within the limits of the number of depositions provided per side 
pursuant to Rule 233(a). This provision should encourage parties to 
focus any requested depositions on those persons who are most likely to 
yield relevant information and thereby make efficient use of time 
during the prehearing stage of the proceeding.
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    \14\ Under proposed Rule 232(e)(3), this type of proposed 
deponent must have witnessed or participated in ``any event, 
transaction, occurrence, act, or omission that forms the basis for 
any claim asserted by the Division, or any defense asserted by any 
respondent in the proceeding (this excludes a proposed deponent 
whose only knowledge of relevant facts about claims or defenses of 
any party arises from the Division's investigation or litigation).''
    \15\ This excludes Division of Enforcement or other Commission 
officers or personnel who have custody of documents or data that was 
produced from the Division to the respondent. In that circumstance, 
the Division or Commission officers or personnel were not the 
original custodian of the documents.
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    Rule 232(f) provides for the payment of witness fees and mileage. 
We propose to add a provision to Rule 232(f) stating that each party is 
responsible for paying any fees and expenses incurred as a result of 
deposition or testimony by the expert witness whom that party has 
designated under Rule 222(b).
    Rule 234 contains procedures for taking depositions through the use 
of written questions. Under Rule 234, a party may make a motion to take 
a deposition on written questions by filing the questions with the 
motion. We propose to amend the rule to provide that the moving party 
may take a deposition on written questions either by stipulation of the 
parties or by filing a motion demonstrating good cause. This proposed 
amendment is intended to provide a clear standard under which the 
hearing officer or Commission would review such a motion, and is 
consistent with standards for other types of motions articulated under 
other Rules of Practice.\16\ The amendment would replace the standard 
under the current rule, which references current Rule 233(b)'s limit on 
depositions to witnesses unable to appear or testify at a hearing.
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    \16\ See, e.g., 17 CFR 201.155(b) (good cause showing to set 
aside a default); 17 CFR 201.161 (good cause showing for extending 
or shortening time limits for filings); 17 CFR 201.201(b) (good 
cause showing for severing a proceeding).
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    We seek comments about the proposed amendments to the standards for 
motions to quash subpoenas and notices for depositions, including the 
consideration of whether compliance with the subpoena would unduly 
delay the hearing and the requirement that a proposed deponent must be 
a fact witness, expert witness under Rule 222(b), or document 
custodian.

D. Proposed Amendment to Rule 222

    Rule 222 \17\ provides that a party who intends to call an expert 
witness shall submit a variety of information. The proposed amendment 
to the rule provides for two exceptions: (1) Drafts of any material 
that is otherwise required to be submitted in final form; and (2) 
communications between a party's attorney and the party's expert 
witness who would be required to submit a report under the rules, 
except under limited circumstances.
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    \17\ 17 CFR 201.222.
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    The proposed amendment also would require disclosure of a written 
report for a witness retained or specially employed to provide expert 
testimony in the case, or an employee of a party whose duties regularly 
involve giving expert testimony. The proposed amendment would outline 
the elements that must be contained in that written report, including a 
complete statement of all opinions the witness will express and the 
basis and reasons for them, the facts or data considered by the witness 
in forming them, any exhibits that will be used to summarize or support 
them, and a statement of the compensation to be paid for the expert's 
study and testimony in the case. These proposed amendments are 
consistent with the requirements for expert witness disclosures and 
expert reports in the Federal Rules of Civil Procedure and we believe 
they would promote efficiency in both prehearing discovery and the 
hearing.\18\ Moreover, the administrative law judges already have 
required such expert reports in proceedings before them.\19\
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    \18\ See Federal Rule of Civil Procedure 26(b)(4), (a)(2), 
respectively.
    \19\ See, e.g., ZPR Investment Management, Inc., Admin Proc. 
Ruling Rel. No. 775 (Aug. 6, 2013), available at http://www.sec.gov/alj/aljorders/2013/ap-775.pdf. (general prehearing order stating 
that ``expert reports should be as specific and detailed as those 
presented in federal district court pursuant to Federal Rule of 
Civil Procedure 26'').
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    We propose amendments to current Rule 222(b)'s requirement that 
parties submit a list of other proceedings in which their expert 
witness has given expert testimony and a list of publications authored 
or co-authored by their expert witness. As amended, Rule 222(b) would 
limit the list of proceedings to the previous four years, and would 
limit the list of publications to the previous ten years.

E. Proposed Amendment to Rule 141

    Rule 141(a)(2)(iv) \20\ specifies the requirements for serving an 
order instituting proceedings on a person in a foreign country. The 
proposed amendment would incorporate additional methods of service. The 
current rule allows for service of an order instituting proceedings on 
persons in foreign countries by any method specified in the rule, or 
``by any other method reasonably calculated to give notice, provided 
that the method of service used is not prohibited by the law of the 
foreign country.''
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    \20\ 17 CFR 201.141(a)(2)(iv).
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    We propose to amend this rule to state that service reasonably 
calculated to give notice includes any method authorized by the Hague 
Convention on the Service Abroad of Judicial and Extrajudicial 
Documents; methods prescribed by the foreign country's law for service 
in that country in an action in its courts of general jurisdiction; or 
as the foreign authority directs in response to a letter rogatory or 
letter of request. In addition, under the proposed rules, unless 
prohibited by the foreign country's law, service may be made by 
delivering a copy of the order instituting proceedings to the 
individual personally, or using any form of mail that the Secretary or 
the interested division addresses and sends to the individual and that 
requires a signed receipt.
    The proposed rule would also allow service by any other means not 
prohibited by international agreement, as the Commission or hearing 
officer orders. Like the similar provision in the Federal Rules of 
Civil Procedure, this provision would cover situations where existing 
agreements do not apply, or efforts to serve under such agreements are 
or would not be successful.
    In addition to providing clarification that proper service on 
persons in foreign countries may be made by any of the above methods, 
the amended rule would provide some certainty regarding whether service 
of an order instituting proceedings has been effected properly and 
would allow the Commission to rely on international agreements in which 
foreign countries have agreed to accept certain forms of service as 
valid.

[[Page 60095]]

    We also propose to amend Rule 141(a)(3), \21\ which requires the 
Secretary to maintain a record of service on parties. In instances 
where a division of the Commission, rather than the Secretary, serves 
an order instituting proceedings, the Secretary does not always receive 
a copy of the service. The proposed amendment would make it clear that 
a division that serves an order instituting proceedings must file with 
the Secretary either an acknowledgement of service by the person served 
or proof of service.
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    \21\ 17 CFR 201.141(a)(3).
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F. Proposed Amendment to Rule 161

    Rule 161 \22\ governs extensions of time, postponements, and 
adjournments requested by parties. Under the current Rule 161(c)(2), a 
hearing officer may stay a proceeding pending the Commission's 
consideration of offers of settlement under certain limited 
circumstances, but that stay does not affect any of the deadlines in 
Rule 360. We propose to amend Rule 161(c)(2) to allow a stay pending 
Commission consideration of settlement offers to also stay the 
timelines set forth in Rule 360.\23\ All the other requirements for 
granting a stay that are in the current rule would remain unchanged. 
This proposed amendment recognizes the important role of settlement in 
administrative proceedings.
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    \22\ 17 CFR 201.161.
    \23\ We also propose a conforming amendment to Rule 
360(a)(2)(iii) to include a cross-reference to amended Rule 
161(c)(2).
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G. Proposed Amendment to Rule 230

    Rule 230(a) \24\ requires the Division to make available to 
respondents certain documents obtained by the Division in connection 
with an investigation prior to the institution of proceedings. Rule 
230(b) \25\ provides a list of documents that may be withheld from this 
production. We propose amending Rule 230(b) to provide that the 
Division may redact certain sensitive personal information from 
documents that will be made available to respondents, unless the 
information concerns the person to whom the documents are being 
produced. Under the amendment, the Division would be able to redact an 
individual's social-security number, an individual's birth date, the 
name of an individual known to be a minor, or a financial account 
number, taxpayer-identification number, credit card or debit card 
number, passport number, driver's license number, or state-issued 
identification number other than the last four digits of the number. 
This proposed amendment is intended to enhance the protection afforded 
to sensitive personal information.
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    \24\ 17 CFR 201.230(a).
    \25\ 17 CFR 201.230(b).
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    We also propose to amend Rule 230(b) to clarify that the Division 
may withhold or redact documents that reflect settlement negotiations 
with persons or entities who are not respondents in the proceeding at 
issue. This proposed amendment is intended to preserve the 
confidentiality of settlement discussions and safeguard the privacy of 
potential respondents with whom the Division has negotiated and is 
consistent with case law that favors the important public policy 
interest in candid settlement negotiations.\26\
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    \26\ See, e.g., Goodyear Tire & Rubber Co. v. Chiles Power 
Supply, Inc., 332 F.3d 976, 980-81 (6th Cir. 2003) (``The public 
policy favoring secret negotiations, combined with the inherent 
questionability of the truthfulness of any statements made therein, 
leads us to conclude that a settlement privilege should exist, and 
that the district court did not abuse its discretion in refusing to 
allow discovery.'').
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H. Proposed Clarifying Amendments to Rules 220, 235, and 320

    Rule 220 \27\ sets forth the requirements for filing answers to 
allegations in an order instituting proceedings. Currently, Rule 220 
states that a defense of res judicata, statute of limitations, or any 
other matter constituting an affirmative defense shall be asserted in 
the answer. We propose amendments to Rule 220 to emphasize that a 
respondent must affirmatively state in an answer whether the respondent 
is asserting any avoidance or affirmative defense, including but not 
limited to res judicata, statute of limitations, or reliance. This 
proposed amendment would not change the substantive requirement under 
the current rule to include affirmative defenses in the answer. 
Instead, it is intended to clarify that any theories for avoidance of 
liability or remedies, even if not technically considered affirmative 
defenses, must be stated in the answer as well.\28\ Timely assertion of 
affirmative defenses or theories of avoidance would focus the use of 
prehearing discovery, foster early identification of key issues and, as 
a result, make the discovery process more effective and efficient.
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    \27\ 17 CFR 201.220.
    \28\ For example, some might argue that ``reliance on counsel'' 
is not a formal affirmative defense, but a basis for negating 
liability.
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    Rule 235 \29\ provides the standard for granting a motion to 
introduce a prior sworn statement of a witness who is not a party. 
Although current Rule 235(a) states that the standard applies to ``a 
witness, not a party,'' we propose adding new Rule 235(b) to make clear 
that sworn statements or declarations of a party or agent may be used 
by an adverse party for any purpose. Further, new Rule 235(b) would 
clarify that ``sworn statements'' include a deposition taken pursuant 
to Rules 233 or 234 or investigative testimony, and allows for the use 
of declarations pursuant to 28 U.S.C. Section 1746.
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    \29\ 17 CFR 201.235.
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    Rule 320 \30\ provides the standard for admissibility of evidence. 
Under the current rule, the Commission or hearing officer may receive 
relevant evidence and shall exclude all evidence that is irrelevant, 
immaterial, or unduly repetitious. We propose to amend the rule to add 
``unreliable'' to the list of evidence that shall be excluded. This 
amended admissibility standard is consistent with the Administrative 
Procedure Act.\31\ We also propose to add new Rule 320(b) to clarify 
that hearsay may be admitted if it is relevant, material, and bears 
satisfactory indicia of reliability so that its use is fair. Admitting 
hearsay evidence if it meets a threshold showing of relevance, 
materiality, and reliability also is consistent with the Administrative 
Procedure Act.\32\
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    \30\ 17 CFR 201.320.
    \31\ 5 U.S.C. 556(c)(3) (allowing hearing officers to receive 
relevant evidence); 5 U.S.C. 556(d) (stating that a sanction may not 
be imposed or rule or order issued except on consideration of the 
whole record or of those parts thereof cited by a party and 
supported by and in accordance with the reliable, probative, and 
substantial evidence).
    \32\ See 5 U.S.C. 556(d) (stating that any oral or documentary 
evidence may be received, but the agency as a matter of policy shall 
provide for the exclusion of irrelevant, immaterial or unduly 
repetitious evidence); see, e.g., J.A.M. Builders, Inc. v. Herman, 
233 F.3d 1350, 1354 (11th Cir. 2000) (hearsay admissible in 
administrative proceedings if ``reliable and credible''); Calhoun v. 
Bailar, 626 F.2d 145, 148 (9th Cir. 1980) (hearsay admissible if 
``it bear[s] satisfactory indicia of reliability'' and is 
``probative and its use fundamentally fair''). Courts also have held 
that hearsay can constitute substantial evidence that satisfies the 
APA requirement. See, e.g., Echostar Communications Corp. v. FCC, 
292 F.3d 749, 753 (D.C. Cir. 2002) (hearsay evidence is admissible 
in administrative proceedings if it ``bear[s] satisfactory indicia 
of reliability'' and ``can constitute substantial evidence if it is 
reliable and trustworthy''); see generally Richardson v. Perales, 
402 U.S. 389, 407-08 (1971) (holding that a medical report, though 
hearsay, could constitute substantial evidence in social security 
disability claim hearing); cf. Federal Rule of Evidence 403 (stating 
that relevant, material, and reliable evidence shall be admitted).
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I. Proposed Amendments to Appellate Procedure in Rules 410, 411, 420, 
440, and 450

    We propose amendments to certain procedures that govern appeals to 
the Commission. Rule 410(b) \33\ outlines the procedure for filing a 
petition for review of an initial decision and directs a party

[[Page 60096]]

to set forth in the petition the specific findings and conclusions of 
the initial decision as to which exception is taken, together with 
supporting reasons for each exception. Rule 410(b) also states that an 
exception may be deemed to have been waived by the petitioner if the 
petitioner does not include the exception in the petition for review or 
a previously filed proposed finding made pursuant to Rule 340.
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    \33\ 17 CFR 201.410(b).
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    We propose to amend Rule 410(b) to eliminate both the requirement 
that a petitioner set forth all the specific findings and conclusions 
of the initial decision to which exception is taken, and the provision 
stating that if an exception is not stated, it may be deemed to have 
been waived by the petitioner. Instead, under amended Rule 410(b), a 
petitioner would be required to set forth only a summary statement of 
the issues presented for review. We also propose to add new Rule 410(c) 
to limit the length of petitions for review to three pages. 
Incorporation of pleadings or filings by reference would not be 
permitted.
    This proposed amendment is intended to address timing issues and 
potential inequities in the number of briefs each party is permitted to 
submit to the Commission. The timing issues arise out of the 
requirement under Rule 410 that a party must file its petition for 
review within 21 days after service of the initial decision or 21 days 
from the date of the hearing officer's order resolving a motion to 
correct manifest error in an initial decision. This means that during 
the three-week period immediately following the issuance of the initial 
decision, a party must decide whether to file a motion to correct 
manifest error and, if not, whether to appeal. If the party decides to 
file a petition to appeal, then the petitioner is required under the 
current rule to quickly determine every exception the petitioner takes 
with the findings and conclusions in the initial decision, along with 
supporting reasons. Requiring the petitioner to submit a petition that 
includes all exceptions and supporting reasons, which may be deemed 
waived if not raised in the petition, encourages petitioners to file 
lengthy petitions that provide lists of exceptions with little 
refinement of the arguments or narrowing of issues to those most 
significant to the Commission's review. As a result, petitions for 
review often have exceeded the length of opening briefs later filed in 
support of a petition for review. In addition, petitions often list 
exceptions that are later abandoned or unsupported in the opening 
brief.
    The proposed amendment would address these issues by allowing a 
party to file a petition for review that provides only a brief summary 
of the issues presented for review under Rule 411(b), which refers to 
prejudicial errors, findings or conclusions of material fact that are 
clearly erroneous, conclusions of law that are erroneous, or exercises 
of discretion or decisions of law or policy that the Commission should 
review.\34\ After filing a petition for review that gives the 
Commission summary notice of the issues presented by the case, the 
petitioner would then be able to focus on the brief that develops the 
reasoned arguments in support of the petition. This practice is 
consistent with the Commission's routine grant of appeals, without 
allowing parties to file oppositions to petitions.\35\ Providing for a 
summary petition would also be consistent with the Federal Rules of 
Appellate Procedure, which requires only notice filing if a petitioner 
may appeal as of right.\36\
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    \34\ This is consistent with the Commission's current rules 
governing appeals to the Commission from determinations by self-
regulatory organizations pursuant to Rule 420. Under Rule 420, an 
application for review of a determination of a self-regulatory 
organization must set forth in summary form a brief statement of the 
alleged errors in the determination and supporting reasons, and must 
not exceed two pages. Rule 420 does not contain a waiver provision.
    \35\ Proposed Amendments to the Rules of Practice and Related 
Provisions, Exchange Act Release No. 48832, 68 FR 68185, 68191 (Dec. 
5, 2003) (``In the Commission's experience, the utility of such 
oppositions has been quite limited, given that the Commission has 
long had a policy of granting petitions for review, believing that 
there is a benefit to Commission review when a party takes exception 
to a decision.''); Adoption of Amendments to the Rules of Practice 
and Delegations of Authority of the Commission, Exchange Act Release 
No. 49412, 69 FR 13166, 13167 (Mar. 12, 2004) (deleting the 
provision for oppositions to petitions for review). The Commission 
issues a scheduling order within approximately three weeks of 
granting a petition for review. Pursuant to Rule 450, the scheduling 
order generally provides the petitioner with thirty days to submit a 
brief in support of the petition of no more than 14,000 words.
    \36\ Federal Rule of Appellate Procedure 3(c) (stating that a 
notice of appeal when there is an appeal as of right must specify 
the parties taking appeal, designate the judgment, order, or part 
thereof being appeals, and name the court to which the appeal is 
taken); cf. Federal Rule of Appellate Procedure 5 (stating that a 
petition for appeal when an appeal is within the court's discretion 
must include the facts necessary to understand the question 
presented, the question itself, the relief sought, the reasons why 
the appeal should be allowed and is authorized by statute or rule, 
and a copy of the order, decree, or judgment complained of and any 
related opinion or memorandum, and any order stating the district 
court's permission to appeal or finding that the necessary 
conditions are met).
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    Allowing parties to file only a summary statement of the issues on 
appeal also would address potential briefing inequities in the current 
rule. As described above, a petitioner often files a lengthy petition 
for review that is followed, in the typical case, by an opening brief 
limited to 14,000 words. Essentially, petitioners are afforded two 
opportunities under the current rule to brief the issues in the case, 
while under current Rule 450, the opposing party typically may submit 
only a brief in opposition that is limited to 14,000 words. As a 
practical matter, that brief in opposition must address not only the 
arguments explained in the petitioner's opening brief, but also each 
exception listed in the petition for review. This has the potential to 
place opposing parties at a disadvantage. The proposed amendment to 
Rule 410(b) would correct this apparent inequity by requiring a 
petitioner to make arguments in its opening brief rather than in the 
petition for review. This also has the benefit of encouraging a 
petitioner to narrow the issues and explain supporting arguments, while 
allowing opposing parties to address only those arguments asserted in 
the petitioner's opening brief.
    We propose an amendment to Rule 411(d) \37\ to effect the 
amendments to Rule 410(b). Rule 411(b) states that Commission review of 
an initial decision is limited to the issues specified in the petition 
for review and any issues specified in the order scheduling briefs.\38\ 
We propose to amend Rule 411(b) to state that Commission review of an 
initial decision is limited to the issues specified in an opening brief 
and that any exception to an initial decision not supported in an 
opening brief may be deemed to have been waived by the petitioner.
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    \37\ 17 CFR 201.411(d).
    \38\ Rule 411(d) also states that on notice to all parties, the 
Commission may, at any time prior to issuance of its decision, raise 
and determine any other matters that it deems material, with 
opportunity for oral or written argument thereon by the parties.
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    We propose amendments to Rule 450 \39\ to provide additional 
support for a structure in which opening briefs are the primary 
vehicles for arguments on appeal. Rule 450(b) states that reply briefs 
are confined to matters in opposition briefs of other parties. We 
propose amendments to Rule 450(b) to make clear that any argument 
raised for the first time in a reply brief shall be deemed to have been 
waived by the petitioner.
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    \39\ 17 CFR 201.450.
---------------------------------------------------------------------------

    We also propose amendments to Rule 450(c) to prohibit parties from 
incorporating pleadings or filings by reference. Under current Rule 
450(c), parties are permitted to incorporate pleadings or filings by 
reference,

[[Page 60097]]

although the number of words in documents incorporated by reference 
count against Rule 450(c)'s word limit for briefs. As a practical 
matter, it is difficult to enforce a word count that allows for 
incorporation by reference, and the rule has encouraged parties to rely 
on pleadings or filings from the hearing below, which already are in 
the record, rather than addressing the relevant evidence or developing 
the arguments central to the appeal before the Commission. Prohibiting 
incorporation by reference is intended to sharpen the arguments and 
require parties to provide specific support for each assertion, rather 
than non-specific support through incorporation of other briefs or 
filings.
    We propose amendments to Rule 450(d) to conform to the proposed 
amendments to Rule 450(c). Rule 450(d) requires parties to certify 
compliance with the length limitations set forth in Rule 450(c). As 
amended, Rule 450(d) would no longer refer to pleadings incorporated by 
reference, and would require parties to certify compliance with the 
requirements set forth in Rule 450(c), instead of certifying only 
compliance with the length limitations in Rule 450(c).
    Finally, we propose amendments to Rules 420(c) \40\ and 440(b) \41\ 
to make them consistent with the proposed amendments to Rules 410(b) 
and 450(b). Rule 420 governs appeals of determinations by self-
regulatory organizations and Rule 440 governs appeals of determinations 
by the Public Company Accounting Oversight Board. Current Rule 420(c) 
is similar to proposed amended Rule 410(b) in that it limits the length 
of an application for review and requires that applicants set forth in 
summary form only a brief statement of alleged errors in the 
determination and supporting reasons. We propose to amend Rule 420(c) 
to include a provision stating that any exception to a determination 
that is not supported in an opening brief may be deemed to have been 
waived by the applicant. Likewise, current Rule 440(b) is similar to 
proposed amendments to Rule 410(b) because it requires that an 
applicant set forth in summary form only a brief statement of alleged 
errors in the determination and supporting reasons. We propose to amend 
Rule 440(b) to include a page limit for the application (two pages, 
which is consistent with current Rule 420(c)) and a provision stating 
that any exception to a determination that is not supported in an 
opening brief may be deemed to have been waived by the applicant. These 
proposed amendments would align appeals from determinations by the 
Public Company Accounting Oversight Board with appeals from 
determinations by self-regulatory organizations and appeals from 
initial decisions issued by hearing officers.
---------------------------------------------------------------------------

    \40\ 17 CFR 201.420(c).
    \41\ 17 CFR 201.440(b).
---------------------------------------------------------------------------

J. Proposed Amendments to Rule 900 Guidelines

    We propose amendments to Rule 900,\42\ which sets forth guidelines 
for the timely completion of proceedings, provides for confidential 
status reports to the Commission on pending cases, and directs the 
publication of summary information concerning the pending case docket. 
Rule 900(a) states that the guidelines will be examined periodically 
and, if necessary, readjusted in light of changes in the pending 
caseload and the available level of staff resources. Consistent with 
that provision, we propose to amend Rule 900(a) to state that a 
decision by the Commission with respect to an appeal from the initial 
decision of a hearing officer, a review of a determination by a self-
regulatory organization or the Public Company Accounting Oversight 
Board, or a remand of a prior Commission decision by a court of appeals 
ordinarily will be issued within eight months from the completion of 
briefing on the petition for review, application for review, or remand 
order, and, if the Commission determines that the complexity of the 
issues presented in an appeal warrant additional time, the decision of 
the Commission may be issued within ten months of the completion of 
briefing. We also propose to amend Rule 900(a) to provide that if the 
Commission determines that a decision by the Commission cannot be 
issued within the eight or ten-month periods, the Commission may extend 
that period by orders as it deems appropriate in its discretion. 
Finally, we propose to amend Rule 900(c) to include additional 
information in the published report concerning the pending case docket. 
Specifically, we propose to amend the rule to include, in addition to 
what is already included, the median number of days from the completion 
of briefing of an appeal to the time of the Commission's decision for 
the cases completed in the given time period.
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    \42\ 17 CFR 201.900.
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K. Effective Date and Transition

    We are proposing that the amended Rules govern any proceeding 
commenced after the effective date of the amended Rules. We seek 
comments about whether the amended Rules should be applied, in whole or 
in part, to proceedings that are pending or have been docketed before 
or on the effective date, and, if so, the standard for applying any 
amended Rules to such pending proceedings.

III. Request for Public Comment

    We request and encourage any interested person to submit comments 
regarding: (1) The time periods for each stage of the proceeding under 
proposed amendments to Rule 360, (2) the structure and number of 
depositions provided under proposed amendments to Rule 233, (3) the 
standards governing an application to quash deposition notices or 
subpoenas under proposed amendments to Rule 232, (4) the standards 
governing the admission of evidence, including hearsay, under Rule 320, 
(5) the assertion of affirmative defenses under Rule 220, (6) the 
effective date and whether and how any amended rules should apply to 
proceedings pending on the effective date, (7) the other proposed 
changes that are the subject of this release, (8) additional or 
different changes, or (9) other matters that may have an effect on the 
proposals contained in this release.

IV. Administrative Procedure Act, Regulatory Flexibility Act, and 
Paperwork Reduction Act

    The Commission finds, in accordance with Section 553(b)(3)(A) of 
the Administrative Procedure Act,\43\ that these revisions relate 
solely to agency organization, procedure, or practice. They are 
therefore not subject to the provisions of the Administrative Procedure 
Act requiring notice, opportunity for public comment, and publication. 
The Regulatory Flexibility Act \44\ therefore does not apply.\45\ 
Nonetheless, we have determined that it would be useful to publish 
these proposed rules for notice and comment before adoption. Because 
these rules relate to ``agency organization, procedure or practice that 
does not substantially affect the rights or obligations of non-agency 
parties,'' they are not subject to the Small Business Regulatory 
Enforcement Fairness Act.\46\ To the extent these rules relate to 
agency information collections during the conduct of administrative 
proceedings, they are exempt from

[[Page 60098]]

review under the Paperwork Reduction Act.\47\
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    \43\ 5 U.S.C. 553(b)(3)(A).
    \44\ 5 U.S.C. 601-612.
    \45\ See 5 U.S.C. 603.
    \46\ 5 U.S.C. 804(3)(C).
    \47\ See 44 U.S.C. 3518(c)(1)(B)(ii); 5 CFR 1320.4 (exempting 
collections during the conduct of administrative proceedings or 
investigations).
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V. Economic Analysis

    We are mindful of the costs and benefits of our rules. In proposing 
these amendments, we seek to enhance flexibility in the conduct of 
administrative proceedings while maintaining the facility to 
efficiently resolve individual matters.
    The current rules governing administrative proceedings serve as the 
baseline against which we assess the economic impacts of these proposed 
amendments. At present, Commission rules set the prehearing period of a 
proceeding at approximately four months for a 300-day proceeding and do 
not permit parties to take depositions solely for the purpose of 
discovery. Rules governing the testimony of expert witnesses have not 
been formalized, but the administrative law judges already have 
required expert reports in proceedings before them.
    The scope of the benefits and costs of the proposed rules depends 
on the expected volume of administrative proceedings. In fiscal year 
2014, 230 new administrative proceedings were initiated and not settled 
immediately. New proceedings initiated and not immediately settled in 
fiscal years 2013 and 2012 totaled 202 and 207 respectively.\48\
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    \48\ The total number of administrative proceedings initiated 
and not immediately settled each fiscal year encompasses a variety 
of types of proceedings, including proceedings instituted pursuant 
to Section 12(j) of the Securities Exchange Act of 1934 seeking to 
determine whether it is necessary and appropriate for the protection 
of investors to suspend or revoke the registration of an issuer's 
securities and proceedings instituted under Section 15(b) of the 
Exchange Act or Section 203(f) of the Investment Advisers Act of 
1940 seeking to determine what, if any, remedial action is 
appropriate in the public interest.
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    The amendments to Rule 233 and Rule 360, as well as the supporting 
amendments, may benefit respondents and the Division of Enforcement by 
providing them with additional time and tools to discover relevant 
facts and information. The proposed amendment to Rule 233 and 
supporting amendments would permit respondents and the Division of 
Enforcement to take depositions by oral examination, permitting a more 
efficient discovery period. We preliminarily believe that the proposed 
amendments regarding depositions will provide parties with an 
opportunity to further develop arguments and defenses, which may narrow 
the facts and issues to be explored during the hearing. The proposed 
amendments to Rule 360 would alter the timeline to allow for expanded 
discovery. We anticipate that the potential for a longer discovery 
period would allow respondents additional time to review investigative 
records and to load and then review electronic productions. Together, 
allowing depositions and providing time for additional discovery should 
facilitate the information acquisition during the prehearing stage, and 
may ultimately result in more focused hearings. Furthermore, we 
preliminarily believe that more information acquisition at the 
prehearing stage may lead to cost savings to respondents and the 
Division of Enforcement stemming from the earlier resolution of cases 
through settlement or shorter, more focused, hearings. We are unable to 
quantify these benefits, however, as the potential savings would depend 
on multiple factors, including the complexity of actions brought to 
administrative proceedings and the impact that the change to discovery 
may have on settlement terms, which are unknown.
    We preliminarily believe that the costs of the proposed amendments 
will be borne by the Commission as well as respondents in 
administrative proceedings and witnesses who provide deposition 
testimony. These costs will primarily stem from the cost of depositions 
and the additional length of administrative proceedings.
    Costs stemming from depositions depend on whether respondents and 
the Division of Enforcement take depositions for the purpose of 
discovery and how they choose to participate in these depositions. 
Costs of depositions include the expenses of travel, attorney's fees, 
and reporter and transcription expenses. Based on staff experience, we 
preliminarily estimate the cost to a respondent of conducting one 
deposition could be approximately $36,840.\49\ However, we recognize 
that respondents and the Division of Enforcement play a large role in 
managing their own costs by determining whether to take or attend 
depositions, managing attorney costs, including the number of attorneys 
attending each deposition, contracting with a competitively-priced 
reporter, arranging for less expensive travel, and choosing the 
location of depositions. We note that determinations regarding the 
approach to depositions will likely reflect parties' beliefs regarding 
the potential benefits they expect to realize from participation in 
depositions. However we recognize that although respondents and the 
Division of Enforcement can choose the extent and manner in which they 
request depositions, the costs of depositions are borne not only by the 
party choosing to conduct a deposition, but also by other parties who 
choose to attend the deposition, the witness, and other entities in 
time, travel, preparation, and attorney costs.\50\
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    \49\ This estimate is comprised of the following expenses: (i) 
travel expenses: $4,000; (ii) reporter/videographer: $7,000; and 
(iii) professional costs for two attorneys (including reasonable 
preparation for the deposition): 34 hours x $460/hr and 34 hours x 
$300/hr = $25,840. The hourly rates for the attorneys are based on 
the 2014-2015 Laffey Matrix. The Laffey Matrix is a matrix of hourly 
rates for attorneys of varying experience levels that is prepared 
annually by the Civil Division of the United States Attorney's 
Office for the District of Columbia. See Laffey Matrix--2014-2015, 
available at http://www.justice.gov/sites/default/files/usao-dc/legacy/2014/07/14/Laffey%20Matrix_2014-2015.pdf (last visited Sept. 
10, 2015) (the ``Laffey Matrix''); see Save Our Cumberland Mountains 
v. Hodel, 857 F.2d 1516, 1525 (D.C. Cir. 1988) (en banc); Covington 
v. District of Columbia, 57 F.3d 1101, 1105 & n.14, 1109 (D.C. Cir. 
1995). We have applied different estimates of the outside legal 
costs in connection with public company reporting, but believe that 
the Laffey Matrix is an appropriate measure for calculating 
reasonable attorneys fees in litigation. Compare Pay Ratio 
Disclosure, Exchange Act Release No. 75610, 80 FR 50103 (Aug. 5, 
2015) (applying a $400 per hour estimate of professional costs for 
Paperwork Reduction Act calculations).
    \50\ Some witnesses who are deposed might bear little if any 
out-of-pocket cost if, for example, the deposition is conducted in 
the city in which they live or work, and they choose not be 
represented by counsel at the deposition. Moreover, the party 
seeking the deposition might under the rules reimburse the witness 
for mileage or other travel costs. On the other hand, if the witness 
is required to pay for his or own travel to the deposition, and 
chooses to retain counsel to represent him or her at the deposition, 
we preliminary estimate that the deposition cost to the witness 
could be approximately $19,640 ($4000 in travel expenses for the 
witness and an attorney, and attorney time of 34 hours (preparation 
and attendance at the deposition) x $460 per hour). The hourly rate 
for the attorney is based on the Laffey Matrix.
---------------------------------------------------------------------------

    The longer potential discovery period permitted by the proposed 
amendment to Rule 360, while intended to provide sufficient time for 
parties to engage in discovery, may impose costs on respondents and the 
Commission. We preliminarily estimate that potentially lengthening the 
overall administrative proceedings timeline by up to four months to 
allow more time for discovery may result in additional costs to 
respondents in a single matter of up to $462,400.\51\ Again, however, 
we recognize that while parties are likely to incur these costs only to 
the extent that they expect to receive benefits from engaging in 
depositions and additional

[[Page 60099]]

discovery, the costs imposed by the additional time for discovery may 
be incurred by all parties, not just the party advocating for 
additional time for discovery. Further, to the extent that the proposed 
rules may result in the earlier resolution of cases through settlement 
or shorter, more focused, hearings, some of these costs may potentially 
be offset.
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    \51\ This estimate is comprised of the following expenses: (i) 1 
senior attorney x 40 hours per week x 16 weeks x $460/hr = $294,400; 
(ii) 1 mid-level attorney x 20 hours per week x 16 weeks x $300/hr = 
$96,000; (iii) 1 paralegal x 30 hours per week x 16 weeks x $150/hr 
= $72,000. The hourly rates for the attorneys and paralegal are 
based on the Laffey Matrix.
---------------------------------------------------------------------------

    The proposed amendments related to discovery may also affect 
efficiency in certain cases. To the extent that the proposed amendments 
facilitate the discovery of relevant facts and information through 
depositions and extending the time for discovery, they may lead to more 
expeditious resolution of administrative proceedings, which could 
enhance the overall efficiency of the Commission's processes. For 
example, for complex cases that may benefit significantly from the 
additional information there could be efficiency gains from the 
proposed rules if the costs associated with the use of depositions are 
smaller than the value of the information gained from depositions. 
However, we note that because parties may not take into account the 
costs that depositions may impose on other entities, a potential 
consequence of the proposed amendments to Rule 233 and Rule 360 is that 
parties may engage in more discovery than is efficient. For example, 
for simple cases which may not benefit significantly from the 
additional information gained from a deposition, requesting depositions 
may result in inefficiency by imposing costs on all parties and 
witnesses involved without any significant informational benefit. 
However, we preliminarily believe that the supporting proposed 
amendments to Rule 232 and 233 may mitigate the risk of this efficiency 
loss by setting forth standards for the issuance of subpoenas and 
motions to quash depositions and setting a limit on the maximum number 
of depositions each side may request.
    As an alternative to the proposed rules, we could continue to 
permit depositions only when a witness is unable to testify at a 
hearing, or propose other limited discovery tools, such as the use of 
interrogatories or requests for admissions in lieu of depositions. 
Although alternatives such as interrogatories or admissions may reduce 
some of the costs of the discovery process (i.e., the cost of 
depositions), they might increase other costs (resulting from the time 
attorneys and parties need to prepare responses) and also may yield 
less useful information for the administrative proceeding given the 
limited nature of questioning these forms permit. Relative to these 
alternatives, we believe that the proposed amendments would achieve the 
benefits of discovery in a cost-efficient manner.
    The proposed amendments to Rule 222 specify the requirements for 
parties requesting to call expert witnesses. To the extent that the 
requirements specified in Rule 222 are identical to the current 
practices of administrative law judges, we do not anticipate any 
significant economic effects. However, the proposed amendments to Rule 
222 may impose costs on parties involved in proceedings before 
administrative law judges whose current practices differ in any way 
from the requirements specified in Rule 222.
    We preliminarily do not expect any significant economic 
consequences to stem from proposed amendments to Rules 141, 161, 220, 
230, 235, 320, 410, 411, 420, 440, 450, and 900. For Rule 233 and its 
supporting amendments and Rule 360, we expect that these proposed 
amendments will have an impact on the efficiency of administrative 
proceedings but do not expect them to significantly affect the 
efficiency, competition, or capital formation of securities markets. We 
also do not expect the proposed amendments to impose a significant 
burden on competition.\52\
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    \52\ See 15 U.S.C. 78w(a)(2).
---------------------------------------------------------------------------

    We request comment on all aspects of the economic effects of the 
proposal, including any anticipated impacts that are not mentioned 
here. We are particularly interested in comments regarding the expected 
benefits and costs of the proposed rules, including the specific 
benefits and costs parties expect to result from the proposed 
amendments. We are also interested in comments regarding how the 
amendments may affect the overall length and outcomes of administrative 
proceedings, and how parties approach administrative proceedings. 
Additionally, we request quantitative estimates of the benefits and 
costs on respondents in administrative proceedings and witnesses who 
provide deposition testimony, in general or for particular types of 
proceedings. We also request comment on reasonable alternatives to the 
proposed rules and on any effect the proposed rules may have on 
efficiency, competition, and capital formation.

VI. Statutory Basis and Text of Proposed Amendments

    These amendments to the Rules of Practice are being proposed 
pursuant to statutory authority granted to the Commission, including 
section 3 of the Sarbanes-Oxley Act of 2002, 15 U.S.C. 7202; section 19 
of the Securities Act, 15 U.S.C. 77s; sections 4A, 19, and 23 of the 
Exchange Act, 15 U.S.C. 78d-1, 78s, and 78w; section 319 of the Trust 
Indenture Act of 1939, 15 U.S.C. 77sss; sections 38 and 40 of the 
Investment Company Act, 15 U.S.C. 80a-37 and 80a-39; and section 211 of 
the Investment Advisers Act, 15 U.S.C. 80b-11.

List of Subjects in 17 CFR Part 201

    Administrative practice and procedure.

Text of the Amendments

    For the reasons set out in the preamble, 17 CFR part 201 is 
proposed to be amended as follows:

PART 201--RULES OF PRACTICE

0
1. The authority citation for part 201, subpart D, continues to read as 
follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77h-1, 77j, 77s, 77u, 77sss, 
77ttt, 78c(b), 78d-1, 78d-2, 78l, 78m, 78n, 78o(d), 78o-3, 78s, 78u-
2, 78u-3, 78v, 78w, 80a-8, 80a-9, 80a-37, 80a-38, 80a-39, 80a-40, 
80a-41, 80a-44, 80b-3, 80b-9, 80b-11, 80b-12, 7202, 7215, and 7217.

0
2. Section 201.141 is amended by revising paragraphs (a)(2)(iv) and (v) 
and (a)(3) to read as follows:


Sec.  201.141  Orders and decisions: Service of orders instituting 
proceedings and other orders and decisions.

    (a) * * *
    (2) * * *
    (iv) Upon persons in a foreign country. Notice of a proceeding to a 
person in a foreign country may be made by any of the following 
methods:
    (A) Any method specified in paragraph (a)(2) of this section that 
is not prohibited by the law of the foreign country; or
    (B) By any internationally agreed means of service that is 
reasonably calculated to give notice, such as those authorized by the 
Hague Convention on the Service Abroad of Judicial and Extrajudicial 
Documents; or
    (C) Any method that is reasonably calculated to give notice
    (1) As prescribed by the foreign country's law for service in that 
country in an action in its courts of general jurisdiction; or
    (2) As the foreign authority directs in response to a letter 
rogatory or letter of request; or
    (3) Unless prohibited by the foreign country's law, by delivering a 
copy of the order instituting proceedings to the individual personally, 
or using any form of mail that the Secretary or the interested division 
addresses and sends to the individual and that requires a signed 
receipt; or

[[Page 60100]]

    (D) By any other means not prohibited by international agreement, 
as the Commission or hearing officer orders.
    (v) In stop order proceedings. Notwithstanding any other provision 
of paragraph (a)(2) of this section, in proceedings pursuant to 
Sections 8 or 10 of the Securities Act of 1933, 15 U.S.C. 77h or 77j, 
or Sections 305 or 307 of the Trust Indenture Act of 1939, 15 U.S.C. 
77eee or 77ggg, notice of the institution of proceedings shall be made 
by personal service or confirmed telegraphic notice, or a waiver 
obtained pursuant to paragraph (a)(4) of this section.
* * * * *
    (3) Record of service. The Secretary shall maintain a record of 
service on parties (in hard copy or computerized format), identifying 
the party given notice, the method of service, the date of service, the 
address to which service was made, and the person who made service. If 
a division serves a copy of an order instituting proceedings, the 
division shall file with the Secretary either an acknowledgement of 
service by the person served or proof of service consisting of a 
statement by the person who made service certifying the date and manner 
of service; the names of the persons served; and their mail or 
electronic addresses, facsimile numbers, or the addresses of the places 
of delivery, as appropriate for the manner of service. If service is 
made in person, the certificate of service shall state, if available, 
the name of the individual to whom the order was given. If service is 
made by U.S. Postal Service certified or Express Mail, the Secretary 
shall maintain the confirmation of receipt or of attempted delivery, 
and tracking number. If service is made to an agent authorized by 
appointment to receive service, the certificate of service shall be 
accompanied by evidence of the appointment.
* * * * *
0
3. Section 201.161 is amended by revising paragraph (c)(2)(iii) to read 
as follows:


Sec.  201.161  Extensions of time, postponements and adjournments.

* * * * *
    (c) * * *
    (2) * * *
    (iii) The granting of any stay pursuant to this paragraph (c) shall 
stay the timeline pursuant to Sec.  201.360(a).
0
4. Section 210.180 is amended by revising paragraphs (a)(1) 
introductory text, (a)(1)(i), and (a)(2) to read as follows:


Sec.  201.180  Sanctions.

    (a) * * *
    (1) Subject to exclusion or suspension. Contemptuous conduct by any 
person before the Commission or a hearing officer during any 
proceeding, including at or in connection with any conference, 
deposition or hearing, shall be grounds for the Commission or the 
hearing officer to:
    (i) Exclude that person from such deposition, hearing or 
conference, or any portion thereof; and/or
* * * * *
    (2) Review procedure. A person excluded from a deposition, hearing 
or conference, or a counsel summarily suspended from practice for the 
duration or any portion of a proceeding, may seek review of the 
exclusion or suspension by filing with the Commission, within three 
days of the exclusion or suspension order, a motion to vacate the 
order. The Commission shall consider such motion on an expedited basis 
as provided in Sec.  201.500.
* * * * *
0
5. Revise Sec.  201.220 to read as follows:


Sec.  201.220  Answer to allegations.

    (a) When required. In its order instituting proceedings, the 
Commission may require any respondent to file an answer to each of the 
allegations contained therein. Even if not so ordered, any respondent 
in any proceeding may elect to file an answer. Any other person granted 
leave by the Commission or the hearing officer to participate on a 
limited basis in such proceedings pursuant to Sec.  201.210(c) may be 
required to file an answer.
    (b) When to file. Except where a different period is provided by 
rule or by order, a respondent shall do so within 20 days after service 
upon the respondent of the order instituting proceedings. Persons 
granted leave to participate on a limited basis in the proceeding 
pursuant to Sec.  201.210(c) may file an answer within a reasonable 
time, as determined by the Commission or the hearing officer. If the 
order instituting proceedings is amended, the Commission or the hearing 
officer may require that an amended answer be filed and, if such an 
answer is required, shall specify a date for the filing thereof.
    (c) Contents; effect of failure to deny. Unless otherwise directed 
by the hearing officer or the Commission, an answer shall specifically 
admit, deny, or state that the party does not have, and is unable to 
obtain, sufficient information to admit or deny each allegation in the 
order instituting proceedings. When a party intends in good faith to 
deny only a part of an allegation, the party shall specify so much of 
it as is true and shall deny only the remainder. A statement of a lack 
of information shall have the effect of a denial. A respondent must 
affirmatively state in the answer any avoidance or affirmative defense, 
including but not limited to res judicata, statute of limitations or 
reliance. Any allegation not denied shall be deemed admitted.
    (d) Motion for more definite statement. A respondent may file with 
an answer a motion for a more definite statement of specified matters 
of fact or law to be considered or determined. Such motion shall state 
the respects in which, and the reasons why, each such matter of fact or 
law should be required to be made more definite. If the motion is 
granted, the order granting such motion shall set the periods for 
filing such a statement and any answer thereto.
    (e) Amendments. A respondent may amend its answer at any time by 
written consent of each adverse party or with leave of the Commission 
or the hearing officer. Leave shall be freely granted when justice so 
requires.
    (f) Failure to file answer: default. If a respondent fails to file 
an answer required by this section within the time provided, such 
respondent may be deemed in default pursuant to Sec.  201.155(a). A 
party may make a motion to set aside a default pursuant to Sec.  
201.155(b).
0
6. Section 201.221 is amended by revising paragraph (c) to read as 
follows.


Sec.  201.221  Prehearing conference.

* * * * *
    (c) Subjects to be discussed. At a prehearing conference 
consideration may be given and action taken with respect to any and all 
of the following:
    (1) Simplification and clarification of the issues;
    (2) Exchange of witness and exhibit lists and copies of exhibits;
    (3) Timing of disclosure of expert witness disclosures and reports, 
if any;
    (4) Stipulations, admissions of fact, and stipulations concerning 
the contents, authenticity, or admissibility into evidence of 
documents;
    (5) Matters of which official notice may be taken;
    (6) The schedule for exchanging prehearing motions or briefs, if 
any;
    (7) The method of service for papers other than Commission orders;
    (8) Summary disposition of any or all issues;
    (9) Settlement of any or all issues;
    (10) Determination of hearing dates;
    (11) Amendments to the order instituting proceedings or answers 
thereto;
    (12) Production of documents as set forth in Sec.  201.230, and 
prehearing

[[Page 60101]]

production of documents in response to subpoenas duces tecum as set 
forth in Sec.  201.232;
    (13) Specification of procedures as set forth in Sec.  201.202;
    (14) Depositions to be conducted, if any, and date by which 
depositions shall be completed; and
    (15) Such other matters as may aid in the orderly and expeditious 
disposition of the proceeding.
* * * * *
0
7. Section 201.222 is amended by revising the section heading and 
paragraph (b) to read as follows:


Sec.  201.222  Prehearing submissions and disclosures.

* * * * *
    (b) Expert witnesses--(1) Information to be supplied; reports. Each 
party who intends to call an expert witness shall submit, in addition 
to the information required by paragraph (a)(4) of this section, a 
statement of the expert's qualifications, a listing of other 
proceedings in which the expert has given expert testimony during the 
previous 4 years, and a list of publications authored or co-authored by 
the expert in the previous 10 years. Additionally, if the witness is 
one retained or specially employed to provide expert testimony in the 
case or one whose duties as the party's employee regularly involve 
giving expert testimony, then the party must include in the disclosure 
a written report--prepared and signed by the witness. The report must 
contain:
    (i) A complete statement of all opinions the witness will express 
and the basis and reasons for them;
    (ii) The facts or data considered by the witness in forming them;
    (iii) Any exhibits that will be used to summarize or support them; 
and
    (iv) A statement of the compensation to be paid for the study and 
testimony in the case.
    (2) Drafts and communications protected. (i) Drafts of any report 
or other disclosure required under this section need not be furnished 
regardless of the form in which the draft is recorded.
    (ii) Communications between a party's attorney and the party's 
expert witness who is identified under this section need not be 
furnished regardless of the form of the communications, except if the 
communications relate to compensation for the expert's study or 
testimony, identify facts or data that the party's attorney provided 
and that the expert considered in forming the opinions to be expressed, 
or identify assumptions that the party's attorney provided and that the 
expert relied on in forming the opinions to be expressed.
0
8. Section 201.230 is amended by:
0
a. Revising the paragraph (b) subject heading;
0
b. Redesignating paragraph (b)(1)(iv) as paragraph (b)(1)(v) and adding 
new paragraph (b)(1)(iv);
0
c. Redesignating paragraph (b)(2) as paragraph (b)(3) and adding new 
paragraph (b)(2); and
0
d. In paragraph (c), removing the term ``(b)(1)(iv)'' and adding in its 
place ``(b)(1)(v)'' wherever it occurs.
    The revision and additions read as follows:


Sec.  201.230  Enforcement and disciplinary proceedings: Availability 
of documents for inspection and copying.

* * * * *
    (b) Documents that may be withheld or redacted.
    (1) * * *
    (iv) The document reflects only settlement negotiations between the 
Division of Enforcement and a person or entity who is not a respondent 
in the proceeding; or
* * * * *
    (2) Unless the hearing officer orders otherwise upon motion, the 
Division of Enforcement may redact information from a document if:
    (i) The information is among the categories set forth in paragraphs 
(b)(1)(i) through (v) of this section; or
    (ii) The information consists of the following with regard to a 
person other than the respondent to whom the information is being 
produced:
    (A) An individual's social-security number;
    (B) An individual's birth date;
    (C) The name of an individual known to be a minor; or
    (D) A financial account number, taxpayer-identification number, 
credit card or debit card number, passport number, driver's license 
number, or state-issued identification number other than the last four 
digits of the number.
* * * * *
0
9. Section 201.232 is amended by revising paragraphs (a), (c), (d), 
(e), and (f) to read as follows:


Sec.  201.232  Subpoenas.

    (a) Availability; procedure. In connection with any hearing ordered 
by the Commission or any deposition permitted under Sec.  201.233, a 
party may request the issuance of subpoenas requiring the attendance 
and testimony of witnesses at such depositions or at the designated 
time and place of hearing, and subpoenas requiring the production of 
documentary or other tangible evidence returnable at any designated 
time or place. Unless made on the record at a hearing, requests for 
issuance of a subpoena shall be made in writing and served on each 
party pursuant to Sec.  201.150. A person whose request for a subpoena 
has been denied or modified may not request that any other person issue 
the subpoena.
* * * * *
    (c) Service. Service shall be made pursuant to the provisions of 
Sec.  201.150 (b) through (d). The provisions of this paragraph (c) 
shall apply to the issuance of subpoenas for purposes of 
investigations, as required by 17 CFR 203.8, as well as depositions and 
hearings.
    (d) Tender of fees required. When a subpoena ordering the 
attendance of a person at a hearing or deposition is issued at the 
instance of anyone other than an officer or agency of the United 
States, service is valid only if the subpoena is accompanied by a 
tender to the subpoenaed person of the fees for one day's attendance 
and mileage specified by paragraph (f) of this section.
    (e) Application to quash or modify--(1) Procedure. Any person to 
whom a subpoena or notice of deposition is directed, or who is an 
owner, creator or the subject of the documents that are to be produced 
pursuant to a subpoena, or any party may, prior to the time specified 
therein for compliance, but in no event more than 15 days after the 
date of service of such subpoena or notice, request that the subpoena 
or notice be quashed or modified. Such request shall be made by 
application filed with the Secretary and served on all parties pursuant 
to Sec.  201.150. The party on whose behalf the subpoena or notice was 
issued may, within five days of service of the application, file an 
opposition to the application. If a hearing officer has been assigned 
to the proceeding, the application to quash shall be directed to that 
hearing officer for consideration, even if the subpoena or notice was 
issued by another person.
    (2) Standards governing application to quash or modify. If 
compliance with the subpoena or notice of deposition would be 
unreasonable, oppressive, unduly burdensome or would unduly delay the 
hearing, the hearing officer or the Commission shall quash or modify 
the subpoena or notice, or may order a response to the subpoena, or 
appearance at a deposition, only upon specified conditions. These 
conditions may include but are not limited to a requirement that the 
party on whose behalf the subpoena was issued shall make reasonable 
compensation to the person to whom the subpoena was

[[Page 60102]]

addressed for the cost of copying or transporting evidence to the place 
for return of the subpoena.
    (3) Additional standards governing application to quash deposition 
notices or subpoenas filed pursuant to Sec.  201.233(a). The hearing 
officer or the Commission shall quash or modify a deposition notice or 
subpoena filed or issued pursuant to Sec.  201.233(a) unless the 
requesting party demonstrates that the deposition notice or subpoena 
satisfies the requirements of Sec.  201.233(a), and:
    (i) The proposed deponent was a witness of or participant in any 
event, transaction, occurrence, act, or omission that forms the basis 
for any claim asserted by the Division of Enforcement, or any defense 
asserted by any respondent in the proceeding (this excludes a proposed 
deponent whose only knowledge of relevant facts about claims or 
defenses of any party arises from the Division of Enforcement's 
investigation or the proceeding);
    (ii) The proposed deponent is a designated as an ``expert witness'' 
under Sec.  201.222(b); provided, however, that the deposition of an 
expert who is required to submit a written report under Sec.  
201.222(b) may only occur after such report is served; or
    (iii) The proposed deponent has custody of documents or electronic 
data relevant to the claims or defenses of any party (this excludes 
Division of Enforcement or other Commission officers or personnel who 
have custody of documents or data that was produced by the Division to 
the respondent).
    (f) Witness fees and mileage. Witnesses summoned before the 
Commission shall be paid the same fees and mileage that are paid to 
witnesses in the courts of the United States, and witnesses whose 
depositions are taken and the persons taking the same shall severally 
be entitled to the same fees as are paid for like services in the 
courts of the United States. Witness fees and mileage shall be paid by 
the party at whose instance the witnesses appear. Except for such 
witness fees and mileage, each party is responsible for paying any fees 
and expenses of the expert witnesses whom that party designates under 
Sec.  201.222(b), for appearance at any deposition or hearing.
0
10. Section 201.233 is revised to read as follows:


Sec.  201.233  Depositions upon oral examination.

    (a) Depositions upon written notice. In any proceeding under the 
120-day timeframe under Sec.  201.360(a)(2), except as otherwise set 
forth in these rules, and consistent with the prehearing conference and 
hearing officer's scheduling order:
    (1) If the proceeding involves a single respondent, the respondent 
may file written notices to depose no more than three persons, and the 
Division of Enforcement may file written notices to depose no more than 
three persons. No other depositions shall be permitted, except as 
provided in paragraph (b) of this section;
    (2) If the proceeding involves multiple respondents, the 
respondents collectively may file joint written notices to depose no 
more than five persons, and the Division of Enforcement may file 
written notices to depose no more than five persons. The depositions 
taken under this paragraph (a)(2) shall not exceed a total of five 
depositions for the Division of Enforcement, and five depositions for 
all respondents collectively. No other depositions shall be permitted 
except as provided in paragraph (b) of this section;
    (3) A deponent's attendance may be ordered by subpoena issued 
pursuant to the procedures in Sec.  201.232; and
    (4) The Commission or hearing officer may rule on a motion by a 
party that a deposition shall not be taken upon a determination under 
Sec.  201.232(e). The fact that a witness testified during an 
investigation does not preclude the deposition of that witness.
    (b) Depositions when witness is unavailable. In addition to 
depositions permitted under paragraph (a) of this section, the 
Commission or the hearing officer may grant a party's request to file a 
written notice of deposition if the requesting party shows that the 
prospective witness will likely give testimony material to the 
proceeding; that it is likely the prospective witness, who is then 
within the United States, will be unable to attend or testify at the 
hearing because of age, sickness, infirmity, imprisonment, other 
disability, or absence from the United States, unless it appears that 
the absence of the witness was procured by the party requesting the 
deposition; and that the taking of a deposition will serve the 
interests of justice.
    (c) Service and contents of notice. Notice of any deposition 
pursuant to this section shall be made in writing and served on each 
party pursuant to Sec.  201.150, and shall be consistent with the 
prehearing conference and hearing officer's scheduling order. A notice 
of deposition shall designate by name a deposition officer. The 
deposition officer may be any person authorized to administer oaths by 
the laws of the United States or of the place where the deposition is 
to be held. A notice of deposition also shall state:
    (1) The name and address of the witness whose deposition is to be 
taken;
    (2) The scope of the testimony to be taken;
    (3) The time and place of the deposition; provided that a subpoena 
for a deposition may command a person to attend a deposition only as 
follows:
    (A) Within 100 miles of where the person resides, is employed, or 
regularly transacts business in person;
    (B) Within the state where the person resides, is employed, or 
regularly transacts business in person, if the person is a party or a 
party's officer;
    (C) At such other location that the parties and proposed deponent 
stipulate; or
    (D) At such other location that the hearing officer or the 
Commission determines is appropriate; and
    (4) The manner of recording and preserving the deposition.
    (d) Producing documents. In connection with any deposition pursuant 
to Sec.  201.233(a), a party may request the issuance of a subpoena 
duces tecum under Sec.  201.232. The party conducting the deposition 
shall serve upon the deponent any subpoena duces tecum so issued. The 
materials designated for production, as set out in the subpoena, must 
be listed in the notice of deposition or in an attachment.
    (e) Method of recording--(1) Method stated in the notice. The party 
who notices the deposition must state in the notice the method for 
recording the testimony. Unless the hearing officer or Commission 
orders otherwise, testimony may be recorded by audio, audiovisual, or 
stenographic means. The noticing party bears the recording costs. Any 
party may arrange to transcribe a deposition.
    (2) Additional method. With prior notice to the deponent and other 
parties, any party may designate another method for recording the 
testimony in addition to that specified in the original notice. That 
party bears the expense of the additional record or transcript unless 
the hearing officer or the Commission orders otherwise.
    (f) By remote means. The parties may stipulate--or the hearing 
officer or Commission may on motion order--that a deposition be taken 
by telephone or other remote means. For the purpose of this section, 
the deposition takes place where the deponent answers the questions.
    (g) Deposition officer's duties--(1) Before the deposition. The 
deposition officer designated pursuant to paragraph (c) of this section 
must begin the

[[Page 60103]]

deposition with an on-the-record statement that includes:
    (i) The deposition officer's name and business address;
    (ii) The date, time, and place of the deposition;
    (iii) The deponent's name;
    (iv) The deposition officer's administration of the oath or 
affirmation to the deponent; and
    (v) The identity of all persons present.
    (2) Conducting the deposition; Avoiding distortion. If the 
deposition is recorded non-stenographically, the deposition officer 
must repeat the items in paragraphs (g)(1)(i) through (iii) of this 
section at the beginning of each unit of the recording medium. The 
deponent's and attorneys' appearance or demeanor must not be distorted 
through recording techniques.
    (3) After the deposition. At the end of a deposition, the 
deposition officer must state on the record that the deposition is 
complete and must set out any stipulations made by the attorneys about 
custody of the transcript or recording and of the exhibits, or about 
any other pertinent matters.
    (h) Order and record of the examination--(1) Order of examination. 
The examination and cross-examination of a deponent proceed as they 
would at the hearing. After putting the deponent under oath or 
affirmation, the deposition officer must record the testimony by the 
method designated under paragraph (e) of this section. The testimony 
must be recorded by the deposition officer personally or by a person 
acting in the presence and under the direction of the deposition 
officer. The witness being deposed may have counsel present during the 
deposition.
    (2) Form of objections stated during the deposition. An objection 
at the time of the examination--whether to evidence, to a party's 
conduct, to the deposition officer's qualifications, to the manner of 
taking the deposition, or to any other aspect of the deposition--must 
be noted on the record, but the examination still proceeds and the 
testimony is taken subject to any objection. An objection must be 
stated concisely in a nonargumentative and nonsuggestive manner. A 
person may instruct a deponent not to answer only when necessary to 
preserve a privilege, to enforce a limitation ordered by the hearing 
officer or the Commission, or to present a motion to the hearing 
officer or the Commission for a limitation on the questioning in the 
deposition.
    (i) Waiver of objections--(1) To the notice. An objection to an 
error or irregularity in a deposition notice is waived unless promptly 
served in writing on the party giving the notice.
    (2) To the deposition officer's qualification. An objection based 
on disqualification of the deposition officer before whom a deposition 
is to be taken is waived if not made:
    (i) Before the deposition begins; or
    (ii) Promptly after the basis for disqualification becomes known 
or, with reasonable diligence, could have been known.
    (3) To the taking of the deposition--(i) Objection to competence, 
relevance, or materiality. An objection to a deponent's competence--or 
to the competence, relevance, or materiality of testimony--is not 
waived by a failure to make the objection before or during the 
deposition, unless the ground for it might have been corrected at that 
time.
    (ii) Objection to an error or irregularity. An objection to an 
error or irregularity at an oral examination is waived if:
    (A) It relates to the manner of taking the deposition, the form of 
a question or answer, the oath or affirmation, a party's conduct, or 
other matters that might have been corrected at that time; and
    (B) It is not timely made during the deposition.
    (4) To completing and returning the deposition. An objection to how 
the deposition officer transcribed the testimony--or prepared, signed, 
certified, sealed, endorsed, sent, or otherwise dealt with the 
deposition--is waived unless a motion to suppress is made promptly 
after the error or irregularity becomes known or, with reasonable 
diligence, could have been known.
    (j) Duration; cross-examination; motion to terminate or limit--(1) 
Duration. Unless otherwise stipulated or ordered by the hearing officer 
or the Commission, a deposition is limited to one day of 6 hours, 
including cross-examination as provided in this subsection. In a 
deposition conducted by or for a respondent, the Division of 
Enforcement shall be allowed a reasonable amount of time for cross-
examination of the deponent. In a deposition conducted by the Division, 
the respondents collectively shall be allowed a reasonable amount of 
time for cross-examination of the deponent. The hearing officer or the 
Commission may allow additional time if needed to fairly examine the 
deponent or if the deponent, another person, or any other circumstance 
impedes or delays the examination.
    (2) Motion to terminate or limit--(i) Grounds. At any time during a 
deposition, the deponent or a party may move to terminate or limit it 
on the ground that it is being conducted in bad faith or in a manner 
that unreasonably annoys, embarrasses, or oppresses the deponent or 
party. If the objecting deponent or party so demands, the deposition 
must be suspended for the time necessary to present the motion to the 
hearing officer or the Commission.
    (ii) Order. The hearing officer or the Commission may order that 
the deposition be terminated or may limit its scope. If terminated, the 
deposition may be resumed only by order of the hearing officer or the 
Commission.
    (k) Review by the witness; changes--(1) Review; statement of 
changes. On request by the deponent or a party before the deposition is 
completed, and unless otherwise ordered by the hearing officer or the 
Commission, the deponent must be allowed 14 days after being notified 
by the deposition officer that the transcript or recording is 
available, unless a longer time is agreed to by the parties or 
permitted by the hearing officer, in which:
    (i) To review the transcript or recording; and
    (ii) If there are changes in form or substance, to sign a statement 
listing the changes and the reasons for making them.
    (2) Changes indicated in the deposition officer's certificate. The 
deposition officer must note in the certificate prescribed by paragraph 
(l)(1) of this section whether a review was requested and, if so, must 
attach any changes the deponent makes during the 14-day period.
    (l) Certification and delivery; exhibits; copies of the transcript 
or recording--(1) Certification and delivery. The deposition officer 
must certify in writing that the witness was duly sworn and that the 
deposition accurately records the witness's testimony. The certificate 
must accompany the record of the deposition. Unless the hearing officer 
orders otherwise, the deposition officer must seal the deposition in an 
envelope or package bearing the title of the action and marked 
``Deposition of [witness's name]'' and must promptly send it to the 
attorney or party who arranged for the transcript or recording. The 
attorney or party must store it under conditions that will protect it 
against loss, destruction, tampering, or deterioration.
    (2) Documents and tangible things--(i) Originals and copies. 
Documents and tangible things produced for inspection during a 
deposition must, on a party's request, be marked for identification and 
attached to the deposition. Any party may inspect and copy them. But if 
the person who produced them wants to keep the originals, the person 
may:
    (A) Offer copies to be marked, attached to the deposition, and then

[[Page 60104]]

used as originals--after giving all parties a fair opportunity to 
verify the copies by comparing them with the originals; or
    (B) Give all parties a fair opportunity to inspect and copy the 
originals after they are marked--in which event the originals may be 
used as if attached to the deposition.
    (ii) Order regarding the originals. Any party may move for an order 
that the originals be attached to the deposition pending final 
disposition of the case.
    (3) Copies of the transcript or recording. Unless otherwise 
stipulated or ordered by the hearing officer or Commission, the 
deposition officer must retain the stenographic notes of a deposition 
taken stenographically or a copy of the recording of a deposition taken 
by another method. When paid reasonable charges, the deposition officer 
must furnish a copy of the transcript or recording to any party or the 
deponent.
0
11. Section 201.234 is amended by revising paragraphs (a) and (c) to 
read as follows:


Sec.  201.234  Depositions upon written questions.

    (a) Availability. Any deposition permitted under Sec.  201.232 may 
be taken and submitted on written questions upon motion of any party, 
for good cause shown, or as stipulated by the parties.
* * * * *
    (c) Additional requirements. The order for deposition, filing of 
the deposition, form of the deposition and use of the deposition in the 
record shall be governed by paragraphs (c) through (l) of Sec.  
201.233, except that no cross-examination shall be made.
0
12. Section 201.235 is amended by revising the section heading and 
paragraphs (a) introductory text, (a)(2), and (a)(5), and by adding 
paragraph (b) to read as follows:


Sec.  201.235  Introducing prior sworn statements or declarations.

    (a) At a hearing, any person wishing to introduce a prior, sworn 
deposition taken pursuant to Sec.  201.233 or Sec.  201.234, 
investigative testimony, or other sworn statement or a declaration 
pursuant to 28 U.S.C. 1746, of a witness, not a party, otherwise 
admissible in the proceeding, may make a motion setting forth the 
reasons therefor. If only part of a statement or declaration is offered 
in evidence, the hearing officer may require that all relevant portions 
of the statement or declaration be introduced. If all of a statement or 
declaration is offered in evidence, the hearing officer may require 
that portions not relevant to the proceeding be excluded. A motion to 
introduce a prior sworn statement or declaration may be granted if:
* * * * *
    (2) The witness is out of the United States, unless it appears that 
the absence of the witness was procured by the party offering the prior 
sworn statement or declaration;
* * * * *
    (5) In the discretion of the Commission or the hearing officer, it 
would be desirable, in the interests of justice, to allow the prior 
sworn statement or declaration to be used. In making this 
determination, due regard shall be given to the presumption that 
witnesses will testify orally in an open hearing. If the parties have 
stipulated to accept a prior sworn statement or declaration in lieu of 
live testimony, consideration shall also be given to the convenience of 
the parties in avoiding unnecessary expense.
    (b) Sworn statement or declaration of party or agent. An adverse 
party may use for any purpose a deposition taken pursuant to Sec.  
201.233 or Sec.  201.234, investigative testimony, or other sworn 
statement or a declaration pursuant to 28 U.S.C. 1746, of a party or 
anyone who, when giving the sworn statement or declaration, was the 
party's officer, director, or managing agent.
0
13. Section 201.320 is revised to read as follows:


Sec.  201.320  Evidence: Admissibility.

    (a) Except as otherwise provided in this section, the Commission or 
the hearing officer may receive relevant evidence and shall exclude all 
evidence that is irrelevant, immaterial, unduly repetitious, or 
unreliable.
    (b) Subject to Sec.  201.235, evidence that constitutes hearsay may 
be admitted if it is relevant, material, and bears satisfactory indicia 
of reliability so that its use is fair.
0
14. Section 201.360 is amended by revising paragraphs (a)(2) and (3) 
and (b) to read as follows:


Sec.  201.360  Initial decision of hearing officer.

    (a) * * *
    (2) Time period for filing initial decision and for hearing--(i) 
Initial decision. In the order instituting proceedings, the Commission 
will specify a time period in which the hearing officer's initial 
decision must be filed with the Secretary. In the Commission's 
discretion, after consideration of the nature, complexity, and urgency 
of the subject matter, and with due regard for the public interest and 
the protection of investors, this time period will be either 30, 75, or 
120 days from the completion of post-hearing briefing, or if there is 
no in-person hearing, the completion of briefing on a dispositive 
motion (including but not limited to a motion for summary disposition 
or default) or the occurrence of a default under Sec.  201.155(a).
    (ii) Hearing. Under the 120-day timeline, the hearing officer shall 
issue an order scheduling the hearing to begin approximately 4 months 
(but no more than 8 months) from the date of service of the order 
instituting the proceeding, allowing parties approximately 2 months 
from the conclusion of the hearing to obtain the transcript and submit 
post-hearing briefs, and no more than 120 days after the completion of 
post-hearing or dispositive motion briefing for the hearing officer to 
file an initial decision. Under the 75-day timeline, the hearing 
officer shall issue an order scheduling the hearing to begin 
approximately 2\1/2\ months (but no more than 6 months) from the date 
of service of the order instituting the proceeding, allowing parties 
approximately 2 months from the conclusion of the hearing to obtain the 
transcript and submit post-hearing briefs, and no more than 75 days 
after the completion of post-hearing or dispositive motion briefing for 
the hearing officer to file an initial decision. Under the 30-day 
timeline, the hearing officer shall issue an order scheduling the 
hearing to begin approximately 1 month (but no more than 4 months) from 
the date of service of the order instituting the proceeding, allowing 
parties approximately 2 months from the conclusion of the hearing to 
obtain the transcript and submit post-hearing briefs, and no more than 
30 days after the completion of post-hearing or dispositive motion 
briefing for the hearing officer to file an initial decision. These 
deadlines confer no substantive rights on respondents. If a stay is 
granted pursuant to Sec.  201.161(c)(2)(i) or Sec.  201.210(c)(3), the 
time period specified in the order instituting proceedings in which the 
hearing officer's initial decision must be filed with the Secretary, as 
well as any other time limits established in orders issued by the 
hearing officer in the proceeding, shall be automatically tolled during 
the period while the stay is in effect.
    (3) Certification of extension; motion for extension. (i) In the 
event that the hearing officer presiding over the proceeding determines 
that it will not be possible to file the initial decision within the 
specified period of time, the hearing officer may certify to the 
Commission in writing the need to extend the initial decision deadline 
by up to 30 days for case management purposes. The certification must 
be issued no later than 30 days prior to the

[[Page 60105]]

expiration of the time specified for the issuance of an initial 
decision and be served on the Commission and all parties in the 
proceeding. If the Commission has not issued an order to the contrary 
within fourteen days after receiving the certification, the extension 
set forth in the hearing officer's certification shall take effect.
    (ii) Either in addition to a certification of extension, or instead 
of a certification of extension, the Chief Administrative Law Judge may 
submit a motion to the Commission requesting an extension of the time 
period for filing the initial decision. First, the hearing officer 
presiding over the proceeding must consult with the Chief 
Administrative Law Judge. Following such consultation, the Chief 
Administrative Law Judge may determine, in his or her discretion, to 
submit a motion to the Commission requesting an extension of the time 
period for filing the initial decision. This motion may request an 
extension of any length but must be filed no later than 15 days prior 
to the expiration of the time specified in the certification of 
extension, or if there is no certification of extension, 30 days prior 
to the expiration of the time specified in the order instituting 
proceedings. The motion will be served upon all parties in the 
proceeding, who may file with the Commission statements in support of 
or in opposition to the motion. If the Commission determines that 
additional time is necessary or appropriate in the public interest, the 
Commission shall issue an order extending the time period for filing 
the initial decision.
    (iii) The provisions of this paragraph (a)(3) confer no rights on 
respondents.
    (b) Content. An initial decision shall include findings and 
conclusions, and the reasons or basis therefor, as to all the material 
issues of fact, law or discretion presented on the record and the 
appropriate order, sanction, relief, or denial thereof. The initial 
decision shall also state the time period, not to exceed 21 days after 
service of the decision, except for good cause shown, within which a 
petition for review of the initial decision may be filed. The reasons 
for any extension of time shall be stated in the initial decision. The 
initial decision shall also include a statement that, as provided in 
paragraph (d) of this section:
* * * * *
0
15. Section 201.410 is amended by revising paragraph (b), redesignating 
paragraph (c) as paragraph (d), and adding new paragraph (c) to read as 
follows:


Sec.  201.410  Appeal of initial decisions by hearing officers.

* * * * *
    (b) Procedure. The petition for review of an initial decision shall 
be filed with the Commission within such time after service of the 
initial decision as prescribed by the hearing officer pursuant to Sec.  
201.360(b) unless a party has filed a motion to correct an initial 
decision with the hearing officer. If such correction has been sought, 
a party shall have 21 days from the date of the hearing officer's order 
resolving the motion to correct to file a petition for review. The 
petition shall set forth a statement of the issues presented for review 
under Sec.  201.411(b). In the event a petition for review is filed, 
any other party to the proceeding may file a cross-petition for review 
within the original time allowed for seeking review or within ten days 
from the date that the petition for review was filed, whichever is 
later.
    (c) Length limitation. Except with leave of the Commission, the 
petition for review shall not exceed three pages in length. 
Incorporation of pleadings or filings by reference is not permitted. 
Motions to file petitions in excess of those limitations are 
disfavored.
* * * * *
0
16. Section 201.411 is amended by revising paragraph (d) to read as 
follows:


Sec.  201.411  Commission consideration of initial decisions by hearing 
officers.

* * * * *
    (d) Limitations on matters reviewed. Review by the Commission of an 
initial decision shall be limited to the issues specified in an opening 
brief that complies with Sec.  201.450(b), or the issues, if any, 
specified in the briefing schedule order issued pursuant to Sec.  
201.450(a). Any exception to an initial decision not supported in an 
opening brief that complies with Sec.  201.450(b) may, at the 
discretion of the Commission, be deemed to have been waived by the 
petitioner. On notice to all parties, however, the Commission may, at 
any time prior to issuance of its decision, raise and determine any 
other matters that it deems material, with opportunity for oral or 
written argument thereon by the parties.
* * * * *
0
17. Section 201.420 is amended by adding a sentence to the end of 
paragraph (c) to read as follows:


Sec.  201.420  Appeal of determinations by self-regulatory 
organizations.

* * * * *
    (c) * * * Any exception to a determination not supported in an 
opening brief that complies with Sec.  201.450(b) may, at the 
discretion of the Commission, be deemed to have been waived by the 
applicant.
* * * * *
0
18. Section 201.440 is amended by revising paragraph (b) to read as 
follows:


Sec.  201.440  Appeal of determinations by the Public Company 
Accounting Oversight Board.

* * * * *
    (b) Procedure. An aggrieved person may file an application for 
review with the Commission pursuant to Sec.  201.151 within 30 days 
after the notice filed by the Board of its determination with the 
Commission pursuant to 17 CFR 240.19d-4 is received by the aggrieved 
person applying for review. The applicant shall serve the application 
on the Board at the same time. The application shall identify the 
determination complained of, set forth in summary form a brief 
statement of alleged errors in the determination and supporting reasons 
therefor, and state an address where the applicant can be served. The 
application should not exceed two pages in length. The notice of 
appearance required by Sec.  201.102(d) shall accompany the 
application. Any exception to a determination not supported in an 
opening brief that complies with Sec.  201.450(b) may, at the 
discretion of the Commission, be deemed to have been waived by the 
applicant.
* * * * *
0
19. Section 201.450 is amended by revising paragraphs (b), (c), and (d) 
to read as follows.


Sec.  201.450  Briefs filed with the Commission.

* * * * *
    (b) Contents of briefs. Briefs shall be confined to the particular 
matters at issue. Each exception to the findings or conclusions being 
reviewed shall be stated succinctly. Exceptions shall be supported by 
citation to the relevant portions of the record, including references 
to the specific pages relied upon, and by concise argument including 
citation of such statutes, decisions and other authorities as may be 
relevant. If the exception relates to the admission or exclusion of 
evidence, the substance of the evidence admitted or excluded shall be 
set forth in the brief, or by citation to the record. Reply briefs 
shall be confined to matters in opposition briefs of other parties; 
except as otherwise determined by the Commission in its discretion, any 
argument raised for the first time in a reply brief shall be deemed to 
have been waived.

[[Page 60106]]

    (c) Length limitation. Except with leave of the Commission, opening 
and opposition briefs shall not exceed 14,000 words and reply briefs 
shall not exceed 7,000 words, exclusive of pages containing the table 
of contents, table of authorities, and any addendum that consists 
solely of copies of applicable cases, pertinent legislative provisions 
or rules, and exhibits. Incorporation of pleadings or filings by 
reference is not permitted. Motions to file briefs in excess of these 
limitations are disfavored.
    (d) Certificate of compliance. An opening or opposition brief that 
does not exceed 30 pages in length, exclusive of pages containing the 
table of contents, table of authorities, and any addendum that consists 
solely of copies of applicable cases, pertinent legislative provisions, 
or rules and exhibits, is presumptively considered to contain no more 
than 14,000 words. A reply brief that does not exceed 15 pages in 
length, exclusive of pages containing the table of contents, table of 
authorities, and any addendum that consists solely of copies of 
applicable cases, pertinent legislative provisions, or rules and 
exhibits is presumptively considered to contain no more than 7,000 
words. Any brief that exceeds these page limits must include a 
certificate by the party's representative, or an unrepresented party, 
stating that the brief complies with the requirements set forth in 
Sec.  201.450(c) and stating the number of words in the brief. The 
person preparing the certificate may rely on the word count of the 
word-processing system used to prepare the brief.
0
20. Section 201.900 is revised to read as follows:


Sec.  201.900  Informal Procedures and Supplementary Information 
Concerning Adjudicatory Proceedings.

    (a) Guidelines for the timely completion of proceedings. (1) Timely 
resolution of adjudicatory proceedings is one factor in assessing the 
effectiveness of the adjudicatory program in protecting investors, 
promoting public confidence in the securities markets and assuring 
respondents a fair hearing. Establishment of guidelines for the timely 
completion of key phases of contested administrative proceedings 
provides a standard for both the Commission and the public to gauge the 
Commission's adjudicatory program on this criterion. The Commission has 
directed that:
    (i) To the extent possible, a decision by the Commission on review 
of an interlocutory matter should be completed within 45 days of the 
date set for filing the final brief on the matter submitted for review.
    (ii) To the extent possible, a decision by the Commission on a 
motion to stay a decision that has already taken effect or that will 
take effect within five days of the filing of the motion, should be 
issued within five days of the date set for filing of the opposition to 
the motion for a stay. If the decision complained of has not taken 
effect, the Commission's decision should be issued within 45 days of 
the date set for filing of the opposition to the motion for a stay.
    (iii) Ordinarily, a decision by the Commission with respect to an 
appeal from the initial decision of a hearing officer, a review of a 
determination by a self-regulatory organization or the Public Company 
Accounting Oversight Board, or a remand of a prior Commission decision 
by a court of appeals will be issued within eight months from the 
completion of briefing on the petition for review, application for 
review, or remand order. If the Commission determines that the 
complexity of the issues presented in a petition for review, 
application for review, or remand order warrants additional time, the 
decision of the Commission in that matter may be issued within 10 
months of the completion of briefing.
    (iv) If the Commission determines that a decision by the Commission 
cannot be issued within the period specified in paragraph (a)(1)(iii), 
the Commission may extend that period by orders as it deems appropriate 
in its discretion. The guidelines in this paragraph (a) confer no 
rights or entitlements on parties or other persons.
    (2) The guidelines in this paragraph (a) do not create a 
requirement that each portion of a proceeding or the entire proceeding 
be completed within the periods described. Among other reasons, 
Commission review may require additional time because a matter is 
unusually complex or because the record is exceptionally long. In 
addition, fairness is enhanced if the Commission's deliberative process 
is not constrained by an inflexible schedule. In some proceedings, 
deliberation may be delayed by the need to consider more urgent 
matters, to permit the preparation of dissenting opinions, or for other 
good cause. The guidelines will be used by the Commission as one of 
several criteria in monitoring and evaluating its adjudicatory program. 
The guidelines will be examined periodically, and, if necessary, 
readjusted in light of changes in the pending caseload and the 
available level of staff resources.
    (b) Reports to the Commission on pending cases. The administrative 
law judges, the Secretary and the General Counsel have each been 
delegated authority to issue certain orders or adjudicate certain 
proceedings. See 17 CFR 200.30-1 et seq. Proceedings are also assigned 
to the General Counsel for the preparation of a proposed order or 
opinion which will then be recommended to the Commission for 
consideration. In order to improve accountability by and to the 
Commission for management of the docket, the Commission has directed 
that confidential status reports with respect to all filed adjudicatory 
proceedings shall be made periodically to the Commission. These reports 
will be made through the Secretary, with a minimum frequency 
established by the Commission. In connection with these periodic 
reports, if a proceeding pending before the Commission has not been 
concluded within 30 days of the guidelines established in paragraph (a) 
of this section, the General Counsel shall specifically apprise the 
Commission of that fact, and shall describe the procedural posture of 
the case, project an estimated date for conclusion of the proceeding, 
and provide such other information as is necessary to enable the 
Commission to make a determination under paragraph (a)(1)(iv) of this 
section or to determine whether additional steps are necessary to reach 
a fair and timely resolution of the matter.
    (c) Publication of information concerning the pending case docket. 
Ongoing disclosure of information about the adjudication program 
caseload increases awareness of the importance of the program, 
facilitates oversight of the program and promotes confidence in the 
efficiency and fairness of the program by investors, securities 
industry participants, self-regulatory organizations and other members 
of the public. The Commission has directed the Secretary to publish in 
the first and seventh months of each fiscal year summary statistical 
information about the status of pending adjudicatory proceedings and 
changes in the Commission's caseload over the prior six months. The 
report will include the number of cases pending before the 
administrative law judges and the Commission at the beginning and end 
of the six-month period. The report will also show increases in the 
caseload arising from new cases being instituted, appealed or remanded 
to the Commission and decreases in the caseload arising from the 
disposition of proceedings by issuance of initial

[[Page 60107]]

decisions, issuance of final decisions issued on appeal of initial 
decisions, other dispositions of appeals of initial decisions, final 
decisions on review of self-regulatory organization determinations, 
other dispositions on review of self-regulatory organization 
determinations, and decisions with respect to stays or interlocutory 
motions. For each category of decision, the report shall also show the 
median age of the cases at the time of the decision, the number of 
cases decided within the guidelines for the timely completion of 
adjudicatory proceedings, and, with respect to appeals from initial 
decisions, reviews of determinations by self-regulatory organizations 
or the Public Company Accounting Oversight Board, and remands of prior 
Commission decisions, the median days from the completion of briefing 
to the time of the Commission's decision.

    By the Commission.

    Dated: September 24, 2015.
Brent J. Fields,
Secretary.
[FR Doc. 2015-24707 Filed 10-2-15; 8:45 am]
BILLING CODE 8011-01-P