[Federal Register Volume 84, Number 133 (Thursday, July 11, 2019)]
[Proposed Rules]
[Pages 33024-33027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-14616]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Chapter II
[Release Nos. 33-10660; 34-86302; 39-2527; IA-5284; IC-33543; File No.
S7-10-19]
List of Rules To Be Reviewed Pursuant to the Regulatory
Flexibility Act
AGENCY: Securities and Exchange Commission.
ACTION: List of rules scheduled for review.
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SUMMARY: The Securities and Exchange Commission is publishing a list of
rules to be reviewed pursuant to Section 610 of the Regulatory
Flexibility Act. The list is published to provide the public with
notice that these rules are scheduled for review by the agency and to
invite public comment on whether the rules should be continued without
change, or should be amended or rescinded to minimize any significant
economic impact of the rules upon a substantial number of small
entities.
DATES: Comments should be submitted by August 12, 2019.
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/other.shtml); or
Send an email to [email protected]. Please include
File Number S7-10-19 on the subject line.
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 No. S7-10-19. This file number
should be included on the subject line if email is used. To help us
process and review your comments more efficiently, please use only one
method. The Commission will post all comments on the Commission's
internet website (http://www.sec.gov/rules/other.shtml). Comments also
are available for website 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. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly.
FOR FURTHER INFORMATION CONTACT: Leila Bham, Office of the General
Counsel, 202-551-5532.
SUPPLEMENTARY INFORMATION: The Regulatory Flexibility Act (``RFA''),
codified at 5 U.S.C. 601-612, requires an agency to review its rules
that have a significant economic impact upon a substantial number of
small entities within ten years of the publication of such rules as
final rules. 5 U.S.C. 610(a). The purpose of the review is ``to
determine whether such rules should be continued without change, or
should be amended or rescinded . . . to minimize any significant
economic impact of the rules upon a substantial number of such small
entities.'' 5 U.S.C. 610(a). The RFA sets forth specific considerations
that must be addressed in the review of each rule:
The continued need for the rule;
The nature of complaints or comments received concerning
the rule from the public;
The complexity of the rule;
The extent to which the rule overlaps, duplicates or
conflicts with other federal rules, and, to the extent feasible, with
state and local governmental rules; and
The length of time since the rule has been evaluated or
the degree to which technology, economic conditions, or other factors
have changed in the area affected by the rule. 5 U.S.C. 610(c).
The Securities and Exchange Commission, as a matter of policy,
reviews all final rules that it published for notice and comment to
assess not only their continued compliance with the RFA, but also to
assess generally their continued utility. When the Commission
implemented the RFA in 1981, it stated that it ``intend[ed] to conduct
a broader review [than that required by the RFA], with a view to
identifying those rules in need of modification or even rescission.''
Securities Act Release No. 6302 (Mar. 20, 1981), 46 FR 19251 (Mar. 30,
1981). The list below is therefore broader than that required by the
RFA, and may include rules that do not have a significant economic
impact on a substantial number of small entities (but excludes such
rules that are minor amendments to previously adopted rules or rules
that are ministerial, procedural, or technical in nature). Where the
Commission has previously made a determination of a rule's impact on
small businesses, the determination is noted on the list.
The Commission particularly solicits public comment on whether the
rules
[[Page 33025]]
listed below affect small businesses in new or different ways than when
they were first adopted. The rules and forms listed below are scheduled
for review by staff of the Commission.
Title: Risk Management Controls for Brokers or Dealers with Market
Access.
Citation: 17 CFR 240.15c3-5.
Authority: 15 U.S.C. 78b, 78c(b), 78k-1, 78o, 78q(a) and (b), and
78w(a).
Description: The Commission adopted a new rule under the Securities
Exchange Act of 1934 (``Exchange Act'') to require broker-dealers with
market access to establish, document, and maintain a system of risk
management controls and supervisory procedures reasonably designed to
manage financial, regulatory, and other risks of this business
activity. These risk management controls and supervisory procedures are
required to be under the direct and exclusive control of the broker-
dealer subject to the obligations (subject to certain limited
exceptions). In addition, these risk management controls and
supervisory procedures must be reviewed for effectiveness on at least
an annual basis, and the broker-dealer's Chief Executive Officer (or
equivalent officer) must certify, on an annual basis, that the broker-
dealer's controls and procedures comply with the requirements of the
rule.
Prior RFA Analysis: A Final Regulatory Flexibility Analysis was
prepared in accordance with 5 U.S.C. 604 in conjunction with the
Commission's adoption of Release No. 34-63241 (November 3, 2010). In
the adopting release, the Commission considered comments received on
the Initial Regulatory Flexibility Analysis included in the proposing
release, Release No. 34-61379 (January 19, 2010).
* * * * *
Title: Facilitating Shareholder Director Nominations.
Citation: 17 CFR 200.82a, 17 CFR 232.13, 17 CFR 240.13a-11, 17 CFR
240.13d-1, 17 CFR 240.13d-102, 17 CFR 240.14a-2, 17 CFR 240.14a-4, 17
CFR 240.14a-5, 17 CFR 240.14a-6, 17 CFR 240.14a-8, 17 CFR 240.14a-9, 17
CFR 240.14a-11, 17 CFR 240.14a-12, 17 CFR 240.14a-18, 17 CFR 240.14a-
101, 17 CFR 240.14n-1 through 14n-3, 17 CFR 240.14n-101, 17 CFR
240.15d-11, and 17 CFR 249.308.
Authority: 15 U.S.C. 78c(b), 78m, 78n, 78o, 78w(a), 78mm, 80a-10,
80a-20(a), and 80a-37, and sections 971(a) and (b) of the Dodd-Frank
Wall Street Reform and Consumer Protection Act.
Description: The Commission adopted changes to the federal proxy
rules to facilitate the effective exercise of shareholders' traditional
state law rights to nominate and elect directors to company boards of
directors. The rules require that specified disclosures be made
concerning nominating shareholders or groups and their nominees. In
addition, the rules provide that companies must include in their proxy
materials, under certain circumstances, shareholder proposals that seek
to establish a procedure in the company's governing documents for the
inclusion of one or more shareholder director nominees in the company's
proxy materials. The Commission also adopted related changes to certain
of its other rules and regulations, including the existing solicitation
exemptions from its proxy rules and the beneficial ownership reporting
requirements.\1\
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\1\ 17 CFR.240.14a-11 (``Rule 14a-11'') was also adopted in this
release. It would have required, under certain circumstances, a
company's proxy materials to provide shareholders with information
about, and the ability to vote for, a shareholder's, or group of
shareholders', nominees for director. On July 22, 2011, the United
States Court of Appeals for the D.C. Circuit issued an order
vacating Rule 14a-11 and on September 14, 2011, the Court issued its
mandate. The Court's order did not affect the amendment to Rule 14a-
8, which was not challenged in the litigation, or the related rules
and amendments adopted concurrently with Rule 14a-11 and the
amendment to Rule 14a-8.
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Prior RFA Analysis: A Final Regulatory Flexibility Analysis was
prepared in accordance with 5 U.S.C. 604 in conjunction with the
Commission's adoption of Release No. 33-9136 (Aug. 25, 2010). The
Commission solicited comment on the Initial Regulatory Flexibility
Analysis included in the proposing release, Release No. 33-9046 (June
10, 2009), but received no comments on that analysis. However, the
adopting release considered other comments received that addressed
aspects of the proposed rule that could potentially affect small
entities.
* * * * *
Title: Amendments to Form ADV.
Citation: 17 CFR 275.203-1, 17 CFR 275.204-1, 17 CFR 275.204-2, 17
CFR 275.204-3, and 17 CFR 279.1.
Authority: 15 U.S.C. 80b-3(c)(1), 80b-4, 80b-6(4), 80b-11(a),
77s(a), 78w(a), 78bb(e)(2), 77sss(a), and 78a-37(a).
Description: The Commission adopted amendments to Part 2 of Form
ADV, and related rules under the Investment Advisers Act of 1940
(``Investment Advisers Act''), to require investment advisers
registered with the Commission to provide new and prospective clients
with a brochure and brochure supplements written in plain English.
These amendments were designed to provide new and prospective advisory
clients with clearly written, meaningful, current disclosure of the
business practices, conflicts of interest, and background of the
investment adviser and its advisory personnel. Advisers must file their
brochures with the Commission electronically and the brochures are made
available to the public through the Commission's website. The
Commission also withdrew the Advisers Act rule requiring advisers to
disclose certain disciplinary and financial information.
Prior RFA Analysis: A Final Regulatory Flexibility Analysis was
prepared in accordance with 5 U.S.C. 604 in conjunction with the
Commission's adoption of Release No. IA-3060 (July 28, 2010). The
Commission solicited comment on the Initial Regulatory Flexibility
Analysis included in the proposing release, Release No. IA-2711 (Mar.
3, 2008), but received no comments on that analysis. However, the
adopting release considered other comments received that addressed
aspects of the proposed rule that could potentially affect small
entities.
* * * * *
Title: Political Contributions by Certain Investment Advisers.
Citation: 17 CFR 275.204-2, 17 CFR 275.206(4)-3, and 17 CFR
275.206(4)-5.
Authority: 15 U.S.C. 80b-4, 80b-6(4), and 80b-11(a).
Description: The Commission adopted a new rule under the Investment
Advisers Act that prohibits an investment adviser from providing
advisory services for compensation to a government client for two years
after the adviser or certain of its executives or employees make a
contribution to certain elected officials or candidates. The rule also
prohibits an adviser from providing or agreeing to provide, directly or
indirectly, payment to any third party for a solicitation of advisory
business from any government entity on behalf of such adviser, unless
such third parties are registered broker-dealers or registered
investment advisers, in each case themselves subject to pay to play
restrictions. Additionally, the rule prevents an adviser from
soliciting from others, or coordinating, contributions to certain
elected officials or candidates or payments to political parties where
the adviser is providing or seeking government business. The amendments
require a registered adviser to maintain certain records of the
political contributions made by the adviser or certain of its
executives or employees. The rule and rule amendments address ``pay to
play'' practices by investment advisers.
Prior RFA Analysis: A Final Regulatory Flexibility Analysis was
[[Page 33026]]
prepared in accordance with 5 U.S.C. 604 in conjunction with the
Commission's adoption of Release No. IA-3043 (July 1, 2010). In the
adopting release, the Commission considered comments received on the
Initial Regulatory Flexibility Analysis included in the proposing
release, Release No. IA-2910 (Aug. 3, 2009).
* * * * *
Title: Amendment to Municipal Securities Disclosure.
Citation: 17 CFR 240.15c2-12.
Authority: 15 U.S.C. 78b, 78c(b), 78j, 78o(c), 78o-4, and
78w(a)(1).
Description: The Commission adopted amendments to Rule 15c2-12
under the Exchange Act relating to municipal securities disclosure. The
amendments revised certain requirements regarding the information that
the broker, dealer, or municipal securities dealer acting as an
underwriter in a primary offering of municipal securities must
reasonably determine that an issuer of municipal securities or an
obligated person has undertaken, in a written agreement or contract for
the benefit of holders of the issuer's municipal securities, to provide
to the Municipal Securities Rulemaking Board (``MSRB''). Specifically,
the amendments require a broker, dealer, or municipal securities dealer
to reasonably determine that the issuer or obligated person has agreed
to provide notice of specified events in a timely manner not in excess
of ten business days after the event's occurrence; amend the list of
events for which is notice is to be provided; and modify the events
that are subject to a materiality determination before triggering a
requirement to provide notice to the MSRB. In addition, the amendments
revised an exemption from the Rule for certain offerings of municipal
securities with put features. The release also provides interpretive
guidance intended to assist municipal securities brokers, dealers, and
municipal securities dealers in meeting their obligations under the
antifraud provisions of the federal securities laws.
Prior RFA Analysis: A Final Regulatory Flexibility Analysis was
prepared in accordance with 5 U.S.C. 604 in conjunction with the
Commission's adoption of Release No. 34-62184A (May 27, 2010). In the
adopting release, the Commission considered comments received on the
Initial Regulatory Flexibility Analysis included in the proposing
release, Release No. 34-60332 (July 24, 2009).
* * * * *
Title: Amendments to Regulation SHO.
Citation: 17 CFR 242.200(g) and 17 CFR 242.201.
Authority: 15 U.S.C. 78b, 78c(b), 78(f), 78i(h), 78j, 78k-1, 78o,
78o-3, 78q, 78s, 78w(a), and 78mm.
Description: The Commission adopted amendments to Regulation SHO
under the Exchange Act, in particular a short sale-related circuit
breaker that, if triggered, imposes a restriction on the prices at
which securities may be sold short (``short sale price test'' or
``short sale price test restriction''). Specifically, the Rule requires
that a trading center establish, maintain, and enforce written policies
and procedures reasonably designed to prevent the execution or display
of a short sale order of a covered security at a price that is less
than or equal to the current national best bid if the price of that
covered security decreases by 10% or more from the covered security's
closing price as determined by the listing market for the covered
security as of the end of regular trading hours on the prior day. In
addition, the Rule requires that the trading center establish,
maintain, and enforce written policies and procedures reasonably
designed to impose this short sale price test restriction for the
remainder of the day and the following day when a national best bid for
the covered security is calculated and disseminated on a current and
continuing basis by a plan processor pursuant to an effective national
market system plan. In addition, the Commission amended Regulation SHO
to provide that a broker-dealer may mark certain qualifying sell orders
``short exempt.'' In particular, if the broker-dealer chooses to rely
on its own determination that it is submitting the short sale order to
the trading center at a price that is above the current national best
bid at the time of submission or to rely on an exception specified in
the Rule, it must mark the order as ``short exempt.'' This ``short
exempt'' marking requirement aids surveillance by self-regulatory
organizations and the Commission for compliance with the provisions of
Rule 201 of Regulation SHO.
Prior RFA Analysis: A Final Regulatory Flexibility Analysis was
prepared in accordance with 5 U.S.C. 604 in conjunction with the
Commission's adoption of Release No. 34-61595 (Feb. 26, 2010). In the
adopting release, the Commission considered comments received on the
Initial Regulatory Flexibility Analysis included in the proposing
release, Release No. 34-59748 (April 10, 2009).
* * * * *
Title: Money Market Fund Reform.
Citation: 17 CFR 270.2a-7, 17 CFR 270.17a-9, 17 CFR 270.22e-3, 17
CFR 270.30b1-6T, 17 CFR 270.30b1-7, and 17 CFR 274.201.
Authority: 15 U.S.C. 80a-6(c), 80a-8(b), 80a-22(c), 80a-22(e), 80a-
29(b), 80a-30(a), and 80a-37(a).
Description: The Commission adopted amendments to certain rules
that govern money market funds under the Investment Company Act of
1940. The amendments tightened the risk-limiting conditions of rule 2a-
7 by, among other things, requiring funds to maintain a portion of
their portfolios in instruments that can be readily converted to cash,
reducing the maximum weighted average maturity of portfolio holdings,
and improving the quality of portfolio securities; requiring money
market funds to report their portfolio holdings monthly to the
Commission; and permitting a money market fund that has ``broken the
buck'' (i.e., re-priced its securities below $1.00 per share), or is at
imminent risk of breaking the buck, to suspend redemptions to allow for
the orderly liquidation of fund assets. The amendments were designed to
make money market funds more resilient to certain short-term market
risks, and to provide greater protections for investors in a money
market fund that is unable to maintain a stable net asset value per
share.
Prior RFA Analysis: Pursuant to 5 U.S.C. 605(b) of the Regulatory
Flexibility Act, the Commission certified that the rule would not have
a significant economic impact on a substantial number of small
entities. This certification was incorporated into the proposing
release, Release No. IC-28807 (June 30, 2009). As stated in the
adopting release, Release No. IC-29132 (Feb. 23, 2010), the Commission
received no comments concerning the impact on small entities or the
Regulatory Flexibility Act certification.
* * * * *
Title: Amendments to Rules Requiring Internet Availability of Proxy
Materials.
Citation: 17 CFR 240.14a-16 and 17 CFR 230.498.
Authority: 15 U.S.C. 77f, 77g, 77j, 77s, 78c(b), 78m, 78n, 78o,
78w(a), 80a-8, 80a-20(a), 80a-24(a), 80a-29, and 80a-37.
Description: The Commission adopted amendments to rules under the
Exchange Act and the Securities Act of 1933 to clarify and provide
additional flexibility regarding the format of the Notice of Internet
Availability of Proxy Materials that is sent to shareholders and to
permit issuers and other soliciting persons to better communicate
[[Page 33027]]
with shareholders by including explanatory materials regarding the
reasons for the use of the notice and access proxy rules and the
process of receiving and reviewing proxy materials and voting pursuant
to the notice and access proxy rules. The amendments also revised the
timeframe for delivering a notice to shareholders when a soliciting
person other than the issuer relies on the notice and access proxy
rules and permit mutual funds to accompany the Notice with a summary
prospectus.
Prior RFA Analysis: A Final Regulatory Flexibility Analysis was
prepared in accordance with 5 U.S.C. 603 in conjunction with the
Commission's adoption of Release No. 33-9108 (Feb. 22, 2010). The
Commission solicited comment on the Initial Regulatory Flexibility
Analysis included in the proposing release, Release No. 33-9073 (Oct.
14, 2009), but, as stated in the adopting release, received no comments
on that analysis.
* * * * *
Title: Shareholder Approval of Executive Compensation of TARP
Recipients.
Citation: 17 CFR 240.14a-6, 17 CFR 240.14a-20, and 17 CFR 240.14a-
101.
Authority: 12 U.S.C. 5221(e), and 15 U.S.C. 78n(a) and 78w(a).
Description: The Commission adopted amendments to the proxy rules
under the Exchange Act to set forth certain requirements for U.S.
registrants subject to Section 111(e) of the Emergency Economic
Stabilization Act of 2008 (``EESA''). Section 111(e) of EESA requires
companies that have received financial assistance under the Troubled
Asset Relief Program (``TARP'') to permit a separate shareholder
advisory vote to approve the compensation of executives, as disclosed
pursuant to the compensation disclosure rules of the Commission, during
the period in which any obligation arising from financial assistance
provided under the TARP remains outstanding. The amendments were
intended to help implement this requirement by specifying and
clarifying it in the context of the federal proxy rules.
Prior RFA Analysis: Pursuant to 5 U.S.C. 605(b) of the Regulatory
Flexibility Act, the Commission certified that the proposed amendment
to the federal proxy rules would not have a significant economic impact
on a substantial number of small entities. This certification was
incorporated into the proposing release, Release No. 34-60218 (July 1,
2009). As stated in the adopting release, Release No. 34-61335 (January
12, 2010), the Commission received no comments concerning the impact on
small entities or the Regulatory Flexibility Act certification.
* * * * *
By the Commission.
Dated: July 3, 2019.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2019-14616 Filed 7-10-19; 8:45 am]
BILLING CODE 8011-01-P