[Federal Register Volume 62, Number 174 (Tuesday, September 9, 1997)]
[Rules and Regulations]
[Pages 47367-47369]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23830]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 200

[Release No. 33-7445]


Amendment of Rules Governing the Delegation of Authority to 
Regional Directors and the Director of the Division of Corporation 
Finance

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: The Securities and Exchange Commission is adopting revisions 
to its rules of general organization to eliminate outdated provisions 
that delegate authority to the Regional Directors and the Director of 
the Division of Corporation Finance.

DATES: The rule revisions are effective September 9, 1997.

FOR FURTHER INFORMATION CONTACT: Elliot Staffin, Attorney-Advisor, 
Division of Corporation Finance, (202) 942-2829, U.S. Securities and 
Exchange Commission, Washington, D.C. 20549.

SUPPLEMENTARY INFORMATION: The Securities and Exchange Commission 
(``Commission'') is eliminating the following ``delegated authority'' 
provisions in its rules of general organization:<SUP>1</SUP> Rule 30-
6(a),<SUP>2</SUP> which delegates authority to its Regional Directors 
regarding Regulation S-B;<SUP>3</SUP> Rule 30-6(b),<SUP>4</SUP> which 
delegates authority to its Regional Directors regarding Regulation 
A;<SUP>5</SUP> Rule 30-6(c),<SUP>6</SUP> which delegates authority to 
its Regional Directors regarding Regulation F;<SUP>7</SUP> Rule 30-
1(b),<SUP>8</SUP> which delegates authority to the Director of 
Corporation Finance regarding Regulation B;<SUP>9</SUP> and Rule 30-
1(g)(2),<SUP>10</SUP> which grants the same authority to the Director 
of Corporation Finance as that delegated to each Regional Director 
under Rule 30-6(a) and (c).
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    \1\ 17 CFR 200.10 through 200.30-18.
    \2\ 17 CFR 200.30-6(a).
    \3\ 17 CFR 228.10 through 228.702.
    \4\ 17 CFR 200.30-6(b).
    \5\ 17 CFR 230.251 through 230.263.
    \6\ 17 CFR 200.30-6(c).
    \7\ 17 CFR 230.651 through 230.656, rescinded in Release No. 33-
7300 (May 31, 1996) [61 FR 30397].
    \8\ 17 CFR 200.30-1(b).
    \9\ 17 CFR 230.300 through 230.346, rescinded in Release No. 33-
7300.
    \10\ 17 CFR 200.30-1(g)(2).
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I. DISCUSSION

A. Revision of Regional Director ``Delegation of Authority'' Rules

    The Commission has delegated authority to its Regional Directors to 
perform several functions under the statutes that it administers. Rules 
30-6(a), (b) and (c) govern the delegation of authority to Regional 
Directors to perform functions under the Securities Act of 1933 
(``Securities Act'').<SUP>11</SUP> In particular, Rule 30-6(a) grants 
authority to each Regional Director to perform functions regarding 
Forms SB-1<SUP>12</SUP> and SB-2,<SUP>13</SUP> the registration 
statements for small business issuers, and related documents filed 
under Regulation S-B.
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    \11\ 15 U.S.C. 77a through 77aa.
    \12\ 17 CFR 239.9.
    \13\ 17 CFR 239.10.
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    Rule 30-6(b) grants to each Regional Director the authority to 
perform certain functions under Regulation A. Regulation A provides a 
limited exemption from the registration requirements of the Securities 
Act for a securities offering by certain domestic and Canadian 
companies that meet the specific conditions of the exemption. Under 
Rule 30-6(b), each Regional Director possesses the same authority 
regarding Regulation A offering statements as that delegated to the 
Director of the Division of Corporation Finance under Rules 30-1(c)(2) 
and (3).<SUP>14</SUP> This authority includes issuing orders that 
qualify offering statements or that declare them withdrawn or 
abandoned.
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    \14\ 17 CFR 200.30-1(c)(2) and (3).
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    This delegation of authority to Regional Directors regarding 
Regulations S-B and A documents was necessary because, until recently, 
a small business issuer conducting an initial public offering and a 
Regulation A issuer had the option of filing, respectively, its 
Regulation S-B registration statement and Form 1-A offering statement 
either at the Commission's Headquarters in Washington, D.C. or in the 
Regional or District Office for the region closest to the registrant's 
principal place of business. However, in December 1996, the Commission 
revised Forms SB-1, SB-2 and 1-A to eliminate the Regional Office 
filing option and to require these forms to be filed at the 
Commission's Headquarters in Washington, D.C.<SUP>15</SUP> These 
revisions were part of a broader Commission initiative to improve 
generally the regulatory conditions for small business by creating a 
new Headquarters operations unit that specializes in small company 
filings and addressing the concerns of small businesses. Since the 
Regional and District Offices no longer perform any role in 
administering Regulation S-B and Regulation A filings, the 
corresponding Regional Director ``delegation of authority'' provisions 
have ceased to serve a useful purpose. Accordingly, the Commission is 
rescinding Rule 30-6(a) and (b) in their entirety.
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    \15\ Release No. 33-7373 (December 16, 1996) [61 FR 67200].
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    Rule 30-6(c) governs the delegation of authority to Regional 
Directors concerning Regulation F documents. Until recently, Regulation 
F provided a conditional limited exemption from Securities Act 
registration for assessments levied on assessable stock

[[Page 47368]]

and for resales of forfeited assessable stock. However, in May 1996, 
the Commission rescinded Regulation F in its entirety and accompanying 
Form 1-F after determining that the availability of other exemptions, 
such as the limited offering exemptions from registration set forth in 
Regulation D<SUP>16</SUP> or the private placement exemption under 
Securities Act Section 4(2),<SUP>17</SUP> have rendered the Regulation 
F exemption obsolete.<SUP>18</SUP> Since Regulation F no longer exists, 
the corresponding Regional Director ``delegation of authority'' 
provision regarding Regulation F has become unnecessary as well. 
Therefore, the Commission is rescinding Rule 30-6(c) in its entirety.
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    \16\ 17 CFR 230.501 through 230.508.
    \17\ 15 U.S.C. 77d(2).
    \18\ Release No. 33-7300 [61 FR at 30398].
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B. Revision of Rules Governing Delegation of Authority To Director of 
Corporation Finance

    Rule 30-1 governs the Commission's delegation of authority to the 
Director of the Division of Corporation Finance 
(``Director'').<SUP>19</SUP> Rule 30-1(b) concerns the Director's 
delegated authority regarding Regulation B documents. Until recently, 
Regulation B provided a conditional limited exemption from Securities 
Act registration for offerings of ``fractional undivided interests'' in 
oil or gas rights of up to $250,000 per offering.<SUP>20</SUP> However, 
the Commission rescinded Regulation B and all accompanying forms and 
schedules in May 1996 for reasons substantially similar to those 
justifying the rescinding of Regulation F.<SUP>21</SUP> Since 
Regulation B no longer exists, the corresponding Director ``delegation 
of authority'' provision has become obsolete. Therefore, the Commission 
is rescinding Rule 30-1(b) in its entirety.
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    \19\ 17 CFR 200.30-1.
    \20\ Former 17 CFR 230.302(a).
    \21\ Release No. 33-7300 [61 FR at 30398].
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    Rule 30-1(g)(2) grants to the Director the same authority as that 
delegated to each Regional Director under Rule 30-6(a) and (c). As 
previously explained, these latter provisions govern the delegation of 
authority to Regional Directors concerning Regulation S-B and 
Regulation F documents. Since the Commission is today rescinding Rule 
30-6(a) and (c), it is rescinding Rule 30-1(g)(2) as well. The Director 
will continue to have authority to administer the Regulation S-B 
registration regimen under the Commission's rule of organization that 
delegates authority to the Director to perform functions regarding the 
registration of securities under the Securities Act.<SUP>22</SUP>
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    \22\ Rule 30-1(a).
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II. Effective Date

    These revisions are effective on September 9, 1997.

III. Certain Findings

    Because the revisions to the Director and Regional Director 
``delegation of authority'' rules relate solely to agency organization, 
procedure, or practice, publication for notice and comment is not 
required under the Administrative Procedure Act.<SUP>23</SUP> 
Therefore, the requirements of the Regulatory Flexibility 
Act<SUP>24</SUP> are inapplicable.<SUP>25</SUP>
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    \23\ 5 U.S.C. 553(b).
    \24\ 5 U.S.C. 601 through 612.
    \25\ 5 U.S.C. 603(a).
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    These ``delegation of authority'' rule revisions are effective upon 
publication in the Federal Register. The Commission finds that there is 
good cause to dispense with the 30 day delay between publication and 
effectiveness normally required by the Administrative Procedure 
Act.<SUP>26</SUP> Because the revisions relate solely to agency 
organization, procedure, or practice, there will be no hardship imposed 
on filers by their immediate implementation. Rather, the public will 
indirectly benefit by their immediate implementation since the primary 
purpose of the revisions is to conform the Commission's ``delegation of 
authority'' rules of organization with previously adopted revisions to 
Securities Act regulations, which it has already determined to be of 
benefit to the public. Furthermore, by eliminating organizational or 
procedural rules that have become obsolete, the ``delegation of 
authority'' revisions will reduce confusion and promote simplicity and 
efficiency in the Commission's regulatory framework. Balancing these 
benefits against the possible confusion and harm to filers and 
investors of leaving intact obsolete organizational or procedural 
rules, the Commission finds good cause for making these rules 
immediately effective.
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    \26\ 5 U.S.C. 553(d).
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    These ``delegation of authority'' revisions fail to fall within the 
scope of the Paperwork Reduction Act of 1995<SUP>27</SUP> because they 
do not constitute a substantive or material change to a collection of 
information.
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    \27\ 44 U.S.C. 3501 through 3520.
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    Under 5 U.S.C. 804, these rule revisions are exempt from the 
definition of the term ``rule'' for purposes of Chapter 8, entitled 
``Congressional Review of Agency Rulemaking,'' since they constitute 
rules of agency organization, procedure, or practice that do not 
substantially affect the rights or obligations of non-agency 
parties.<SUP>28</SUP>
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    \28\ 5 U.S.C. 804(3)(C).
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IV. Cost-Benefit Analysis

    Because these revisions relate to organizational or procedural 
rules, which will substantially impact the Commission rather than any 
filer or investor, a traditional cost-benefit analysis appears 
unnecessary. As previously mentioned, the revisions will indirectly 
benefit filers and investors by eliminating the possibility of 
confusion caused by leaving intact obsolete organizational or 
procedural rules. There do not appear to be any significant costs to 
the public as a result of enacting these revisions.

V. Statutory Basis

    The Commission is adopting these ``delegated authority'' rule 
revisions pursuant to Section 19(a) of the Securities Act.<SUP>29</SUP>
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    \29\ 15 U.S.C. 77s(a).
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List of Subjects in 17 CFR Part 200

    Authority delegations (Government agencies), Organization and 
functions (Government agencies).

Text of the Amendments

    In accordance with the foregoing, Title 17, Chapter II of the Code 
of Federal Regulations is amended as follows:

PART 200--ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND 
REQUESTS

Subpart A--Organization and Program Management

    1. The authority citation for part 200, Subpart A continues to read 
in part as follows:

    Authority: 15 U.S.C. 77s, 78d-1, 78d-2, 78w, 78ll(d), 79t, 
77sss, 80a-37, 80b-11, unless otherwise noted.

* * * * *
    2. Section 200.30-1 is amended by removing paragraphs (b) and 
(g)(2); redesignating paragraphs (c) through (f) as paragraphs (b) 
through (e), paragraph (g)(3) as paragraph (g)(2) and paragraphs (g) 
through (l) as paragraphs (f) through (k).
    3. Section 200.30-6 is amended by removing paragraphs (a), (b) and 
(c) and redesignating paragraphs (d) through (h) as paragraphs (a) 
through (e).

    Dated: September 3, 1997.


[[Page 47369]]


    By the Commission.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-23830 Filed 9-8-97; 8:45 am]
BILLING CODE 8010-01-P