Federal Register / Vol. 66, No. 120 / Thursday, June 21, 2001 / Rules and Regulations 33175

1Except for the discussion in this release about

authentication documents, our views expressed

today do not address record retention requirements

for investment companies and public utility

holding companies. Our views also do not address

record retention requirements for investment

advisers, transfer agents or broker-dealers. These

matters are addressed in separate releases. See

Investment Company Act Release No. 24991 (May

24, 2001) [66 FR 29224 (May 30, 2001)] (investment

companies and investment advisers); Public Utility

Holding Company Act Release No. 27404 (May 24,

2001) [66 FR 29471 (May 31, 2001)] (public utility

holding companies); Exchange Act Release No.

44238 (May 1, 2001) [66 FR 22916 (May 7, 2001)]

(broker-dealers); and Exchange Act Release No.

44227 (Apr. 27, 2001) [66 FR 21648 (May 1, 2001)]

(transfer agents). This release does not in any way

affect the record retention requirements discussed

in those releases.

As we have previously noted (see Securities Act

Release No. 7912 (Oct. 27, 2000) [65 FR 65736 (Nov.

2, 2000)]; Securities Act Release No. 7877 (July 27,

2000) [65 FR 47281 (Aug. 2, 2000)]), we are

considering the broader implications of the

Electronic Signatures in Global and National

Commerce Act on securities transactions.

2Pub. L. No. 106–229, 114 Stat. 464 (2000)

(codified at 15 U.S.C. 7001–7006, 7021, 7031).

3 15 U.S.C. 77a, et seq.

4 15 U.S.C. 78a, et seq.

5 17 CFR 232.10—232.601.

6E-SIGN preamble.

7E-SIGN section 106(13) [15 U.S.C. 7106(13)]

defines the term ‘‘transaction’’ generally to mean

‘‘an action or set of actions relating to the conduct

of business, consumer or commercial affairs

between two or more persons.’’

8E-SIGN section 101(a)(1) [15 U.S.C. 7001(a)(1)].

Note, however, that section 101(e) of E-SIGN [15

U.S.C. 7001(e)] provides that legal effect, validity or

enforceability may be denied to a contract or other

record required to be in writing that is kept in

electronic form if the electronic record is not in a

form that is capable of being retained and

accurately reproduced for later reference by all

involved parties.

9E-SIGN section 101(a)(2) [15 U.S.C. 7001(a)(2)].

10E-SIGN section 101(d)(1) [15 U.S.C. 7001(d)(1)].

With respect to record retention requirements

imposed by a federal statute or agency rule, E-SIGN

became effective on March 1, 2001 unless a federal

regulatory agency had announced, proposed or

initiated rulemaking to establish performance

standards to assure accuracy, record integrity and

accessibility of electronic records on or before that

date. Where a federal regulatory agency announced,

proposed or initiated a rulemaking project on or

before March 1, 2001, the effective date of E-SIGN

was postponed until June 1, 2001 with respect to

those record retention requirements. See E-SIGN

section 107(b)(1) [15 U.S.C. 7007(b)(1)]. On

February 28, 2001, we published notice of our

intention to engage in rulemaking in order to

provide interpretive guidance and, where

appropriate, propose or adopt electronic

performance standards consistent with E-SIGN. See

Securities Act Release No. 7955 (Feb. 28, 2001) [66

FR 13273 (Mar. 5, 2001)]. Accordingly, to the extent

that E-SIGN affects any record retention

requirements under the federal securities laws, ESIGN took effect on June 1, 2001, instead of March

1, 2001.

11E-SIGN section 104(b)(3) [15 U.S.C. 7004(b)(3)].

12E-SIGN section 101(d)(1) [15 U.S.C. 7001(d)(1)].

E-SIGN preserves our authority to interpret this

provision. E-SIGN section 104(b)(1) [15 U.S.C.

7004(b)(1)].

13See Office of Management and Budget,

Memorandum for the Heads of Departments and

Agencies from Jacob J. Lew, No. M–00–15, OMB

Guidance on Implementing the Electronic

Signatures in Global and National Commerce Act

(Sept. 25, 2000), Part III, B.1 (‘‘OMB Guidance’’).

Paragraph 6005 Class E airspace areas

extending upward from 700 feet or more

above the surface of the earth.

* * * * *

ANM UT E5 Heber City, UT [NEW]

Heber City Muni-Russ McDonald Field, UT

(Lat. 40°28′55′′N., long. 111°25′44′′W.)

That airspace extending upward from 700

feet above the surface within the 5-mile

radius of the Heber City Muni-Russ

McDonald Field, and within 2 miles each

side of the 010° bearing from the airport

extending to 7.8 miles, and within 2 miles

each side of the 160° bearing extending to 8.9

miles; and that airspace extending upward

from 1,200 feet above the surface bounded by

a line beginning at lat. 41°13′45′′N., long.

111°24′20′′W., to lat. 41°11′34′′N., long.

111°09′28′′W., to lat. 40°09′40′′N., long.

111°15′42′′W., to lat. 40°10′52′′N., long.

111°34′57′′W., to lat. 40°30′00′′N., long.

111°34′57′′W to origin, and excluding that

airspace within Federal airways; the Salt

Lake City, UT; and the Evanston, WY, Class

E airspace areas.

* * * * *

Issued in Seattle, Washington, on June 14,

2001.

Dan A. Boyle,

Assistant Manager, Air Traffic Division,

Northwest Mountain Region.

[FR Doc. 01–15610 Filed 6–20–01; 8:45 am]

BILLING CODE 4910–13–M

SECURITIES AND EXCHANGE

COMMISSION

17 CFR Parts 231, 241, 251 and 271

[Release Nos. 33–7985, 34–44424; 35–

27419; IC–25003]

RIN 3235–AI14

Application of the Electronic

Signatures in Global and National

Commerce Act To Record Retention

Requirements Pertaining to Issuers

Under the Securities Act of 1933,

Securities Exchange Act of 1934 and

Regulation S-T

AGENCY: Securities and Exchange

Commission.

ACTION: Interpretation.

SUMMARY: We are publishing guidance

on the obligations of issuers to maintain

certain records under the Securities Act

of 1933 (‘‘Securities Act’’), Securities

Exchange Act of 1934 (‘‘Exchange Act’’)

and Regulation S-T in light of the

Electronic Signatures in Global and

National Commerce Act (‘‘E-SIGN’’).

EFFECTIVE DATE: June 21, 2001.

FOR FURTHER INFORMATION CONTACT:

Mark A. Borges, Division of Corporation

Finance, at (202) 942–2910.

SUPPLEMENTARY INFORMATION: We are

publishing guidance 1 on the impact of

E-SIGN 2 on our rules promulgated

under the Securities Act,3 Exchange

Act 4 and Regulation S-T5 that require

issuers to retain signature

authentication documents and certain

other records for specified time periods.

Discussion

I. Background

E-SIGN seeks to promote electronic

commerce by permitting and

encouraging the use of electronic

records and signatures in transactions in

interstate or foreign commerce.6

Generally, E-SIGN provides that, with

respect to any transaction 7 within its

scope, a signature, contract or other

record relating to the transaction may

not be denied legal effect, validity or

enforceability solely because it is in

electronic form.8 Similarly, E-SIGN

provides that a contract relating to such

transaction may not be denied legal

effect, validity or enforceability solely

because an electronic signature or

electronic record was used in its

formation.9

E-SIGN also encourages the electronic

storage of records relating to business,

consumer and commercial

transactions.10 Further, E-SIGN

authorizes federal and state regulatory

agencies to set standards and formats for

the retention of these electronic

records.11

II. E-SIGN’s Record Retention Provision

Under E-SIGN, if a statute, regulation

or other rule of law requires that a

contract or other record relating to a

transaction be retained, that

requirement is met by retaining an

electronic record of the information in

the contract or other record if the

electronic record

• Accurately reflects the information

set forth in the contract or other record;

and

• Remains accessible to all persons

who are entitled to access by statute,

regulation or rule of law, for the period

required by such statute, regulation or

rule of law, in a form that is capable of

being accurately reproduced for later

reference.12

E-SIGN generally supersedes preexisting regulatory agency requirements

that a record be kept on paper if that

record is generated in a business,

consumer or commercial transaction.13

If, however, the record is generated

33176 Federal Register / Vol. 66, No. 120 / Thursday, June 21, 2001 / Rules and Regulations

14 Id. at Part I, B and Part III, B.1. The OMB

Guidance provides two examples that illustrate this

point. In the first example, E-SIGN applies to a

governmental agency’s requirement that a seller

retain a copy of the contract of sale for a regulated

substance for future audit or law enforcement

purposes because the contract is generated as part

of a commercial transaction. In the second example,

E-SIGN does not apply to a governmental agency’s

requirement that a seller retain a copy of an audit

of its consumption of the regulated substance

because retention is not ‘‘related to’’ a commercial

transaction, but occurs to comply with a

governmental requirement. See also 146 Cong. Rec.

H4357 (daily ed. Jun. 14, 2000) (statement of Rep.

Dingell).

Records generated to comply with governmental

requirements are subject to the Government

Paperwork Elimination Act [Pub. L. No. 105–277,

Title XVII, §§ 1701—1710 (1998) (codified at 44

U.S.C. 3504)], which is effective October 21, 2003.

15See Item 302(b) of Regulation S-T [17 CFR

232.302(b)]. Since 1993, we have required most

documents filed or otherwise submitted to us to be

transmitted electronically to our Electronic Data

Gathering, Analysis and Retrieval, or EDGAR,

system. Regulation S-T, in conjunction with the

EDGAR Filer Manual and the electronic filing

provisions of applicable rules, regulations and

forms, governs the electronic submission of

documents filed or otherwise submitted to us via

EDGAR. See Item 10(a) of Regulation S-T [17 CFR

232.10(a)].

16See Securities Act Rule 402(e) [17 CFR

230.402(e)]; Securities Act Rule 471(b) [17 CFR

230.471(b)]; Exchange Act Rule 12b-11(d) [17 CFR

240.12b-11(d)]; and Exchange Act Rule 14d-1(h) [17

CFR 240.14d-1(h)]. A similar requirement is

applicable to beneficial owners of more than ten

percent of any class of equity securities registered

under Section 12 of the Exchange Act [15 U.S.C.

78l], and the officers and directors of the issuer of

such security who are subject to Section 16(a) of the

Exchange Act [15 U.S.C. 78p(a)]. See Exchange Act

Rule 16a-3(i) [17 CFR 240.16a-3(i)] (retention of

manually-signed signature page for any Section

16(a) statement filed with a typed, duplicated or

facsimile signature).

17As explained in the adopting release for

Regulation S-T, generally the authentication

document retention requirement was established to

provide a satisfactory means by which signatories

could authenticate and adopt their typed signatures

appearing on filed documents for evidentiary

purposes. See Securities Act Release No. 6977,

Section III.F.2 (Feb. 23, 1993) [58 FR 14628 (Mar.

18, 1993)]. Subsequently, comparable changes were

made to the signature requirements for paper filings

under the Securities Act and Exchange Act. See

Securities Act Release No. 7300, Section IV (May

31, 1996) [61 FR 30397 (June 14, 1996)].

18E-SIGN section 104(a) [15 U.S.C. 7004(a)].

19Similarly, officers, directors and greater than

ten percent beneficial owners who are subject to

Section 16(a) of the Exchange Act should continue

to retain the paper original of their authentication

documents. See Exchange Act Rule 16a-3(i) [17 CFR

240.16a-3(i)].

20See, for example, Securities Act Rule 428(a)(2)

[17 CFR 230.428(a)(2)] (issuers filing registration

statements on Form S–8 [17 CFR 239.16b] required

to retain documents comprising the Form S–8

prospectus for a period of five years after last use)

and Item 405(b)(2)(ii) of Regulation S-K [17 CFR

229.405(b)(2)(ii)] (issuers that maintain for a period

of two years the written representation of any

reporting person under Section 16(a) of the

Exchange Act [15 U.S.C. 78p(a)] that they were not

required to file an annual statement of beneficial

ownership of securities on Form 5 [17 CFR 249.105]

for the issuer’s most recently completed fiscal year

not required to identify reporting person as having

failed to file a Form 5 for that year).

21We note, however, that Item 304(c) of

Regulation S-T [17 CFR 232.304(c)] requires

electronic filers to retain for a period of five years

a copy of each publicly distributed document, in

the format used, that contains graphic, image, audio

or video material where such material is not

included in the filed version of the document.

Therefore, if graphic or image material is

distributed to investors in paper, an issuer would

have to retain the information in paper under the

rule. We will not object, however, if issuers elect

to keep graphic or image information in electronic

form, so long as it is a form that replicates the

appearance of the distributed document.

22E–SIGN permits us to establish performance

standards to assure the accuracy, record integrity

and accessibility of records that are required to be

retained. See E–SIGN section 104(b)(3)(A) [15

U.S.C. 7004(b)(3)(A)].

principally for governmental purposes,

it is not subject to E-SIGN.14

III. Record Retention Requirements

Imposed on Issuers Under the Securities

Act, Exchange Act and Regulation S-T

Several of our disclosure rules require

issuers to retain records related to the

documents filed with us or distributed

to investors. Of principal concern to us

is the provision in Regulation S-T that

requires issuers to retain manuallysigned signature pages or other

documents that signatories must execute

(‘‘authentication documents’’) to

authenticate, acknowledge or otherwise

adopt their signatures that appear in

typed form within electronically filed

documents.15 These authentication

documents must be executed before or

at the time an issuer makes an electronic

filing. The filer must retain each

authentication document for a period of

five years and furnish it to us upon

request. Comparable requirements exist

under the Securities Act and the

Exchange Act where typed, duplicated

or facsimile signatures appear on a

document that we permit issuers to file

with us in paper form.16

We believe that these requirements to

retain authentication documents are not

subject to E-SIGN because

authentication documents are records

generated principally for governmental

purposes rather than in connection with

a business, consumer or commercial

transaction.17 Moreover, these

authentication documents arise in the

context of a governmental filing.

Governmental filings are expressly

excluded from E-SIGN.18 Accordingly,

issuers subject to these retention

requirements should continue to retain

the paper original of all authentication

documents.19

Other rules under the Securities Act,

Exchange Act and Regulation S-T that

require issuers to retain records 20 do

not expressly require that the records be

retained in paper form.21 Accordingly,

issuers may elect to keep these records

in electronic form as long as the storage

method selected offers the same

assurances of accuracy and accessibility

as are provided by paper retention.

At this time, we do not believe that

the specification of any additional

standards 22 for the electronic retention

of issuer records subject to E-SIGN is

needed to protect investors. If questions

arise about the accuracy, integrity or

accessibility of electronic records in the

future, we may exercise our authority to

impose appropriate standards for

electronic retention.

List of Subjects

17 CFR Parts 231 and 241

Securities.

17 CFR Part 251

Holding companies; Securities.

17 CFR Part 271

Investment companies; Securities.

Amendments to the Code of Federal

Regulations

For the reasons set forth in the

preamble, Title 17, Chapter II of the

Code of Federal Regulations is amended

as set forth below:

PART 231—INTERPRETATIVE

RELEASES RELATING TO THE

SECURITIES ACT OF 1933 AND

GENERAL RULES AND REGULATIONS

THEREUNDER

1. Part 231 is amended by adding

Release No. 33–7985 and the release

date of June 14, 2001, to the list of

interpretive releases.

PART 241—INTERPRETATIVE

RELEASES RELATING TO THE

SECURITIES EXCHANGE ACT OF 1934

AND GENERAL RULES AND

REGULATIONS THEREUNDER

2. Part 241 is amended by adding

Release No. 34–44424 and the release

date of June 14, 2001, to the list of

interpretive releases.

PART 251—INTERPRETATIVE

RELEASES RELATING TO THE

PUBLIC UTILITY HOLDING COMPANY

ACT OF 1935 AND GENERAL RULES

AND REGULATIONS THEREUNDER

3. Part 251 is amended by adding

Release No. 35–27419 and the release

date of June 14, 2001, to the list of

interpretive releases.

Federal Register / Vol. 66, No. 120 / Thursday, June 21, 2001 / Rules and Regulations 33177

PART 271—INTERPRETATIVE

RELEASES RELATING TO THE

INVESTMENT COMPANY ACT OF 1940

AND GENERAL RULES AND

REGULATIONS THEREUNDER

4. Part 271 is amended by adding

Release No. IC–25003 and the release

date of June 14, 2001, to the list of

interpretive releases.

Dated: June 14, 2001.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–15455 Filed 6–20–01; 8:45 am]

BILLING CODE 8010–01–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[CA 226–0271; FRL–6998–3]

Revision to the California State

Implementation Plan, Antelope Valley

Air Pollution Control District

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Final rule.

SUMMARY: EPA is finalizing a full

disapproval of a revision to the

Antelope Valley Air Pollution Control

District portion of the California State

Implementation Plan (SIP). This action

was proposed in the Federal Register on

November 14, 2000 and concerns

volatile organic compound (VOC)

emissions from the transfer of gasoline

at dispensing stations. We are taking

this action under authority of the Clean

Air Act as amended in 1990 (CAA or the

Act).

EFFECTIVE DATE: This rule is effective on

July 23, 2001.

ADDRESSES: You can inspect copies of

the administrative record for this action

at EPA’s Region IX office during normal

business hours. You can inspect copies

of the submitted rule revisions at the

following locations:

Environmental Protection Agency, Region IX,

75 Hawthorne Street, San Francisco, CA

94105.

Environmental Protection Agency, Air

Docket (6102), Ariel Rios Building, 1200

Pennsylvania Avenue, NW., Washington

DC 20460.

California Air Resources Board, Stationary

Source Division, Rule Evaluation Section,

1001 ‘‘I’’ Street, Sacramento, CA 95814.

Antelope Valley Air Pollution Control

District, 43301 Division Street, Suite 206,

(P.O. Box 4038), Lancaster, CA 93539.

FOR FURTHER INFORMATION CONTACT: Al

Petersen, Rulemaking Office (AIR–4),

U.S. Environmental Protection Agency,

Region IX; (415) 744–1135.

SUPPLEMENTARY INFORMATION:

Throughout this document, ‘‘we,’’ ‘‘us’’

and ‘‘our’’ refer to EPA.

I. Proposed Action

On November 14, 2000 (65 FR 68111),

EPA proposed a full disapproval of the

following rule that was submitted for

incorporation into the California SIP.

TABLE 1.—SUBMITTED RULE

Local agency Rule No. Rule title Adopted Submitted

AVAPCD ........................................................... 461 Gasoline Transfer and Dispensing ................... 09/15/98 05/13/99

Our proposed action contains more

information on the rule and our

evaluation.

II. Public Comments and EPA

Responses

EPA’s proposed action provided a 30-

day public comment period. During this

period, we received comments from the

following party:

• Charles L. Fryxell, AVAPCD; letter

dated December 12, 2000 and received

December 14, 2000.

The comments and our responses are

summarized below.

Comment I: AVAPCD disagrees with

EPA that the reference to Rule 430 must

be removed from Rule 461 because Rule

430 is not in the SIP and is not

appropriate for the SIP. AVAPCD argues

that Rule 430 was appropriately

submitted to EPA as a SIP revision to

support the District’s title V program.

AVAPCD believes that pursuant to the

part 70 White Papers #1 and #2,

submitted Rule 430 should be

considered enforceable unless and until

EPA disapproves it.

Response: Page 19 of part 70 White

Paper #2 provides for Districts to write

Title V permits that rely on rules that

have been submitted but not approved

by EPA, where the District reasonably

believes that the submitted rule will be

approved. This does not adequately

support the comment on Rule 461

because:

(1) The White Papers do not address

the case where a SIP rule, rather than a

permit, references rules submitted but

not approved.

(2) Based on the EPA correspondence

referenced in the comment, AVACPD

cannot reasonably assume that the

submitted Rule 430 will be approved.

Because we believe Rule 430 will not

be incorporated into the SIP and

because we have identified other

deficiencies in Rule 461, we believe it

is appropriate to list the reference to

Rule 430 as a deficiency in Rule 461.

However, if AVAPCD continues to

request EPA action on Rule 430, we can

act on Rule 430 in a time frame

consistent with District activity to revise

Rule 461.

Comment II: AVAPCD comments that

they removed the ‘‘Self-Compliance

Program’’ (SCP) from Rule 461 because

South Coast Air Quality Management

District (SCAQMD) audits showed that

the SCP was ineffective. AVAPCD also

comments that they intend to monitor

changes that SCAQMD has made in

their SCP and will consider EPA’s

suggested replacement program.

Response: Information collected over

the last several years by CARB,

SCAQMD and others show considerable

VOC emissions caused by inadequately

maintained vapor recovery equipment.

The SCP was designed to require regular

equipment inspections and upkeep to

ensure reasonable emission control.

While this program may be flawed, we

believe it has resulted in significant

emission reductions. AVAPCD’s

removal of the SCP requirement without

equivalent replacement violates sections

110(l), 182(b)(2), and 182(b)(3) of the

CAA.

Comment III: AVAPCD comments that

the proposed disapproval should be a

limited approval/limited disapproval,

because the rule was previously

approved into the SIP and portions of

the proposed amendments, including

the deletion of the training requirement,

the conditional extension of the

exemption for mobile fuelers, and a