Federal Register / Vol. 60, No. 53 / Monday, March 20, 1995 / Rules and Regulations 14621

§ 39.13 [Amended]

2. Section 39.13 is amended by adding a

new airworthiness directive (AD),

Amendment 39–9177, to read as follows:

AD 95–06–07 Robinson Helicopter Company:

Amendment 39–9177. Docket Number

94–SW–22–AD. Supersedes Priority

Letter AD 94–11–01, issued May 18,

1994.

Applicability: Model R22 helicopters, with

forward flexplate (flexplate), part number (P/

N) A947–1 with bonded washers, or P/N

A193–1 without bonded washers, installed,

certificated in any category. Flexplate, P/N

A947–1E and subsequent FAA-approved

revisions to P/N A947–1, is exempt from the

requirements of this AD.

Compliance: Required as indicated, unless

accomplished previously.

To prevent failure of the flexplate, failure

of the main rotor drive, and subsequent loss

of control of the helicopter, accomplish the

following:

(a) Within the next 25 hours time-inservice (TIS) after the effective date of this

airworthiness directive (AD), accomplish the

following:

(1) With the clutch disengaged, support the

forward end of the clutch shaft, P/N A166–

1, remove the flexplate, and record the shim

locations for use during reinstallation.

(i) Replace any flexplate that does not have

eight bonded washers (two per arm) with an

airworthy flexplate, P/N A947–1E or a

subsequent FAA-approved revision to P/N

A947–1.

(ii) For those flexplates that have eight

bonded washers (two per arm), comply with

the following:

(2) Remove all coating down to bare metal

from the outer edges of the flexplate to

approximately 0.125 inches inward, but in no

case within 0.50 inches of the bonded

washers, using Scotch Brite or 600 grit sand

paper. Do not use a chemical paint stripper

since it may adversely affect the adhesive

that bonds the washers to the flexplate.

(3) Inspect the outer edges of the flexplate

for cracks, avoiding the bonded washers,

using a dye penetrant inspection method in

accordance with Appendix I of this AD. If the

dye penetrant contacts the bonded washers,

remove the solution from the bonded

washers within 1 minute since longer

exposure may adversely affect the adhesive.

(i) If a crack is found, replace the flexplate

with an airworthy flexplate, P/N A947–1E or

a subsequent FAA-approved revision to P/N

A947–1.

(ii) If no crack is found, paint the bare edge

area of the flexplate with an even coat of

zinc-chromate or epoxy primer. Do not paint

the bare metal surface of the bonded washers.

(4) Reinstall the flexplate and ensure

sheave and clutch shaft angle are properly

aligned in accordance with the applicable

maintenance manual.

(b) For those helicopters with flexplates

that have less than 2 years or 450 hours TIS,

accomplish the following prior to or upon

reaching 2 years or 500 hours TIS, and

thereafter at intervals not to exceed 50 hours

TIS from the last inspection; for those

helicopters with flexplates that have 2 years

or more or 450 hours or more TIS,

accomplish the following at intervals not to

exceed 50 hours TIS from the last inspection.

(If the flexplate TIS cannot be determined

through a review of the maintenance records,

then use the helicopter TIS as the TIS of the

flexplate).

(1) Remove the flexplate in accordance

with the applicable maintenance manual.

(2) Clean the flexplate using a solvent (e.g.,

methyl-ethyl ketone or naphtha).

(3) Inspect the flexplate for nicks, cracks,

or corrosion using a 10-power or higher

magnifying glass, paying close attention to

the edges of the flexplate.

(i) If a crack is found, replace the flexplate

with an airworthy flexplate, P/N A947–1E or

a subsequent FAA-approved revision to P/N

A947–1, in accordance with the applicable

maintenance manual.

(ii) If a nick or corrosion is found, repair

the flexplate in accordance with the

applicable maintenance manual.

(iii) Paint any bare edges of the flexplate

with an even coat of zinc-chromate or epoxy

primer. Do not paint the bare metal surface

of the bonded washers.

(iv) If any nick or corrosion cannot be

repaired within the rework limits specified in

the applicable maintenance manual, replace

the flexplate with an airworthy flexplate, P/

N A947–1E or a subsequent FAA-approved

revision to P/N A947–1, in accordance with

the applicable maintenance manual.

(4) Reinstall the flexplate and ensure

sheave and clutch shaft are properly aligned

in accordance with the applicable

maintenance manual.

Note 1: Robinson Helicopter Company R22

Maintenance Manual, Change 14, dated

March 14, 1994, pertains to this AD.

(c) If a crack, nick, or corrosion is found

on the flexplate as a result of the inspections

required by this AD, report a description of

the crack, nick, or corrosion, the total TIS,

and the operating conditions to the Manager,

Propulsion Branch, Los Angeles Aircraft

Certification Office, FAA. Reporting

requirements have been approved by the

Office of Management and Budget and

assigned control number 2120–0056.

(d) Installation of a flexplate, P/N A947–1E

or a subsequent FAA-approved revision to P/

N A947–1, constitutes terminating action for

the requirements of this AD.

(e) An alternative method of compliance or

adjustment of the compliance time that

provides an acceptable level of safety may be

used when approved by the Manager, Los

Angeles Aircraft Certification Office, FAA.

Operators shall submit their requests through

an FAA Principal Maintenance Inspector,

who may concur or comment and then send

it to the Manager, Los Angeles Aircraft

Certification Office.

Note 2: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Los Angeles Aircraft

Certification Office.

(f) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the helicopter

to a location where the requirements of this

AD can be accomplished.

(g) This amendment becomes effective on

April 4, 1995.

Appendix I—Dye Penetrants

Several dye penetrant type inspection kits

are now available that will reveal the

presence of surface cracks or defects and

subsurface flaws that extend to the surface of

the part being inspected. These penetrant

type inspection methods are considered

acceptable, provided the part being inspected

has been thoroughly cleaned, all areas are

readily accessible for viewing, and the

manufacturer’s recommendations as to the

method of application are closely followed.

a. Cleaning. An inspection is initiated by

first cleaning the surface to be inspected of

dirt, loose scale, oil, and grease. Precleaning

may usually be accomplished by vapor

degreasing or with volatile cleaners. Use a

volatile cleaner as it will evaporate from the

defects before applying the penetrant dye.

Sand blasting is not as desirable a cleaning

method, since surface indications may be

obscured. It is not necessary to remove

anodic films from parts to be inspected, since

the dye readily penetrates such films. Special

procedures for removing the excess dye

should be followed.

b. Application of Penetrant. The penetrant

is applied by brushing, spraying, or by

dipping and allowing to stand for a minimum

of 2 minutes. Dwell time may be extended up

to 15 minutes, depending upon the

temperature of the part and fineness of the

defect or surface condition. Parts being

inspected should be dry and heated to at

least 70° F, but not over 130° F. Very small

indications require increased penetration

periods.

c. Removal of Dye Penetrant. Surplus

penetrant is usually removed by application

of a special cleaner or remover, or by

washing with plain water and allowing the

part to dry. Water rinse may also be used in

conjunction with the remover, subject to the

manufacturer’s recommendations.

d. Application of Developer. A light and

even coat of developer is applied by

spraying, brushing, or dipping. When

dipping, avoid excess accumulation.

Penetrant that has penetrated into cracks or

other openings in the surface of the material

will be drawn out by the developer resulting

in a bright red indication. Some idea of the

size of the defect may be obtained after

experience by watching the size and rate of

growth of the indication.

Issued in Fort Worth, Texas, on March 10,

1995.

Eric Bries,

Acting Manager, Rotorcraft Directorate,

Aircraft Certification Service.

[FR Doc. 95–6684 Filed 3–17–95; 8:45 am]

BILLING CODE 4910–13–P
14622 Federal Register / Vol. 60, No. 53 / Monday, March 20, 1995 / Rules and Regulations

1 15 U.S.C. 78a et seq.

2 15 U.S.C. 77aaa et seq.

3 15 U.S.C. 79a et seq.

4 15 U.S.C. 80a–1 et seq.

5 5 U.S.C. 551–559. 6 5 U.S.C. app.

7 Investment Company Act Release No. 14341

(Jan. 30, 1985) [50 FR 5064] (Feb. 6, 1985)].

8 5 U.S.C. 552.

9 5 U.S.C. 552a.

10 15 U.S.C. 80b–1 et seq.

SECURITIES AND EXCHANGE

COMMISSION

17 CFR Parts 200 and 270

[Release No. 34–35483]

Organization and Program

Management

AGENCY: Securities and Exchange

Commission.

ACTION: Final rule.

SUMMARY: The Securities and Exchange

Commission is amending its rules on

organization and program management.

This action is necessary to reflect

changes that have occurred over the

years. It is intended to update the rules.

EFFECTIVE DATE: March 20, 1995.

FOR FURTHER INFORMATION CONTACT:

Diane A. Campbell, Office of the

Executive Director, (202) 942–4300;

Elizabeth T. Tsai, Office of Freedom of

Information and Privacy Act Operations,

(202) 942–4326.

SUPPLEMENTARY INFORMATION: The

Commission has undertaken a

comprehensive review of the rules

governing its organization and program

management. The present amendments

and additions to its rules result from

that review.

Specifically, the Commission is

amending § 200.2 (b) and (d) to clarify

the description of the Securities

Exchange Act of 1934 1 and the Trust

Indenture Act of 1939.2 It is amending

paragraphs (c) and (e) of § 200.2 to

describe adequately the Commission’s

current functions under the Public

Utility Holding Company Act of 1935 3

and the Investment Company Act of

1940.4 The Commission is revising

§ 200.13 to designate the Executive

Director as the Chief Operating Officer

of the Commission, to clarify the

description of the responsibilities of the

Executive Director, and to update the

list of statutes, regulations, and

Executive Orders to be implemented by

the Executive Director. It is revising

§ 200.14(a) to describe the work of the

Office of Administrative Law Judges

specifically and accurately. The revised

section refers to the Administrative

Procedure Act,5 under which hearings

are conducted, and lists the tasks of

administrative law judges in

administrative proceedings. The

Commission makes only minor editorial

changes in §§ 200.14(b) and 200.30–9.

The Commission is revising § 200.16a

to reflect the establishment of the Office

of the Inspector General (OIG) in March

1989 and the transfer of the Office of

Internal Audit to it in accordance with

the 1988 amendments to the Inspector

General Act of 1978.6 The Commission

established the OIG as an independent

and objective unit to conduct audits and

investigations, to keep Congress and the

Chairman informed about problems and

deficiencies in the Commission’s

programs and operations, and to further

the other purposes of the Inspector

General Act. Under this Act, the

Inspector General shall report to the

Commission Chairman, who ‘‘shall not

prevent or prohibit the Inspector

General from initiating, carrying out, or

completing any audit or investigation,

or from issuing any subpoena during the

course of any audit or investigation.’’

Under § 200.16a(e), any such subpoena

shall be served by any method

prescribed for service of subpoenas

under § 201.232 of this chapter.

The Commission is revising § 200.17

to describe clearly the duties of the

Chief Management Analyst. It is

amending § 200.18(b) (3) and (5) to

make technical clarifications.

The Commission is amending

§ 200.19a to reflect the current

responsibilities of the Director of the

Division of Market Regulation. As

amended, the Director would have

oversight of the entities and activities

enumerated in the section, such as the

national market system, government

securities dealers, and the Securities

Investor Protection Corporation. The

Commission is also amending § 200.30–

3, which delegates authority to the

Director, to update citations to certain

rules mentioned there.

The Commission is amending

§§ 200.19b and 200.27 to reflect the

reorganization of the Regional Offices

under the general supervision of the

Director of the Division of Enforcement.

A further amendment to § 200.19b

reflects the adoption of procedures for

handling requests from regulatory and

law enforcement agencies for access to

nonpublic information in enforcement

files.

The Commission is amending

§ 200.20b to clarify that the duties of the

Director of the Division of Investment

Management do not include

enforcement activities under the

jurisdiction of the Division of

Enforcement and that the functions of

the Director described in paragraphs (f)

and (g) of the section relate to the Public

Utility Holding Company Act. The

Commission added paragraphs (f) and

(g) in 1985 when it transferred the

duties under this Act to the Division of

Investment Management 7 from the

Office of Public Utility Regulation,

which then ceased to exist. At that time,

however, introductory language to

paragraphs (f) and (g) was inadvertently

omitted.

The Commission is amending

§ 200.21a to clarify the responsibilities

of the Ethics Counsel vis-a-vis those of

the Inspector General. Specifically, the

amendments reflect (1) Referral by the

Ethics Counsel to the Inspector General

of matters of alleged staff misconduct,

and complaints appearing to involve

violations of Federal criminal statutes,

(2) the transfer of the Ethics Counsel’s

investigative responsibilities in those

matters to the Inspector General, and (3)

the transfer from the Ethics Counsel to

the Inspector General of the

responsibility to act as liaison with the

Department of Justice with respect to

such referred matters.

The Commission is revising § 200.24a

to reflect reorganizations, which moved

the management of the public reference

facilities to the Office of Filings and

Information Services and the

administration of the Freedom of

Information Act 8 and the Privacy Act of

1974 9 to the Office of Freedom of

Information and Privacy Act Operations.

Both of these offices are now under the

executive direction and administrative

control of the Executive Director. The

former Office of Consumer Affairs and

Information Services has been renamed

as the Office of Consumer Affairs and

the Director of this office reports

directly to the Chairman of the

Commission.

The Commission is amending

§ 200.30–1 to reflect previous

amendments and revisions in

regulations overseen by the Division of

Corporation Finance. These

amendments are technical in nature, as

the amendments primarily update and

revise regulatory citations.

The Commission is amending

paragraphs (a)(1), (a)(2), (e)(3), and (e)(4)

of § 200.30–5 to simplify the review of

applications in the Division of

Investment Management. These

provisions authorize the Director of the

Division of Investment Management to

approve applications under all sections

of the Investment Company Act and the

Investment Advisers Act of 1940,10

except as specifically limited. The

amendments give some discretion to the
Federal Register / Vol. 60, No. 53 / Monday, March 20, 1995 / Rules and Regulations 14623

11 Investment Company Act Release No. 19362

(Mar. 26, 1993) (58 FR 16799 (Mar. 31, 1993)).

12 In reviewing applications, the Division

occasionally determines that it will not recommend

that the Commission order the relief requested by

an applicant, and notifies the applicant accordingly.

The applicant then may request that the Division

submit the application to the Commission with the

Division’s recommendation that the application be

set down for a hearing.

13 26 U.S.C. 1 et seq.

14Securities Act Release No. 6949 (July 30, 1992)

(57 FR 36442 (Aug. 13, 1992)).

15Pub. L. No. 102–486, 106 Stat. 2776.

16 5 U.S.C. 553(b)(3)(A).

17 5 U.S.C. 601 et seq. 18 15 U.S.C. 78w(a)(2).

Director to present applications to the

Commission. The Director generally

may issue notices and orders if the

matter does not appear to the Director

to present significant issues that have

not been previously settled by the

Commission or to raise questions of fact

or policy warranting consideration by

the Commission. The Commission

proposed these § 200.30–5 amendments

in March 1993, along with amendments

to Rule 0–5 under the Investment

Company Act,11 but has not received

any public comments on the former.

These § 200.30–5 amendments do not

authorize the Director to deny

exemptive relief or to order a hearing

under the Investment Company Act or

the Investment Advisers Act.12

The Commission is revising paragraph

(b) of § 200.30–5 to clarify that the

Director of the Division of Investment

Management has the authority referred

to in that paragraph with respect to all

of the types of entities listed. This

amendment does not change the

Director’s authority, but is intended to

clarify that the Director of the Division

of Investment Management, rather than

the Director of the Division of

Corporation Finance, has the authority

listed with respect to certain entities,

such as business development

companies, that are not registered

investment companies.

The Commission is changing the

cross-reference to the Internal Revenue

Code in § 200.30–5(d) to the Internal

Revenue Code of 1986.13 It also is

deleting paragraphs (g) and (h) of

§ 200.30–5 because the duties specified

in those paragraphs fall within the

jurisdiction of the Division of

Enforcement. In new § 200.30–5(g)(1), it

updates the cross-reference to § 200.30–

6, which it amended in 1992.14

The Commission is also amending

§ 200.30–5(f)(1) to authorize the Director

of the Division of Investment

Management to issue notices of

applications and declarations under

Sections 32 and 33 of the Public Utility

Holding Company Act. The Energy

Policy Act of 1992 15 has added these

two sections. Also, the Commission is

removing paragraph (f)(5) of § 200.30–5

because holding companies and their

subsidiaries no longer submit the type

of applications it describes and are not

likely to submit any such applications

in the future.

The Commission is amending

§ 200.30–6(a) to clarify that the

delegated authority for the Regional

Directors concerning Forms SB–1 and

SB–2 is limited to filings made in their

region. The Commission is amending

§ 200.20c and revising § 200.30–11 to

reflect recent reorganizations and to

clarify certain delegated authority to the

Associate Executive Director of the

Office of Filings and Information

Services. The Commission is adopting

new § 200.23, which describes the

functions of the Office of Economic

Analysis. It created this Office in 1988

when it merged the Office of the Chief

Economist and the Directorate of

Economic and Policy Analysis.

The Commission is removing

§ 200.30–12, which delegated authority

to waive or reduce fees under the

Freedom of Information Act and the

Privacy Act of 1974 to the director of an

office that no longer exists. The initial

authority to waive or reduce such fees

now lies with the Freedom of

Information Act/Privacy Act Officer,

whose decision is appealable to the

General Counsel under § 200.30–14(c)

and (d).

The Commission is revising § 200.30–

15 to update the delegation of authority

to the Executive Director in two ways.

First, it removes the delegation of

authority to publish quarterly

compilations of reimbursements for

Commission attendees of non-Federal

conferences relating to the work of the

Commission, since these

reimbursements are now required to be

reported semi-annually to the Office of

Government Ethics. Second, it delegates

the authority to the Executive Director,

as the Chief Operating Officer of the

Commission, to perform certain

functions described in President

Clinton’s memorandum, dated October

1, 1993, on ‘‘Implementing Management

Reform in the Executive Branch.’’

Other changes reflect the current titles

of certain offices and office heads.

The Commission finds, in accordance

with the Administrative Procedure Act

(‘‘APA’’),16 that these rule amendments

relate solely to agency organization,

procedures, or practice. Hence, the

public notice and comment

requirements of that Act are

inapplicable. Similarly, the provisions

of the Regulatory Flexibility Act,17

which apply only when notice and

comment are required by the APA or

other law, are not applicable. The

Commission further finds that, since

these rule amendments relate solely to

agency organization, procedures, or

practice, the provisions of the APA,

which require publication for not less

than 30 days before the effective date of

a substantive rule, are inapplicable.

Accordingly, the amendments adopted

today are effective March 20, 1995.

Effects on Competition

Section 23(a)(2) of the Securities

Exchange Act18 requires the

Commission, in adopting rules under

the Act, to consider their anticompetitive effects, if any. It also

requires the Commission to balance any

adverse impact against the regulatory

benefits that will flow by advancing the

purposes of the Act. The Commission

has considered the amendments and

additions to its rules announced in this

release in light of the standards set forth

in section 23(a)(2). It believes that their

adoption would not impose any burden

on competition unnecessary or

inappropriate in furtherance of the Act.

List of Subjects

17 CFR Part 200

Administrative practice and

procedure, Authority delegations

(Government agencies), Freedom of

information, Government employees,

Organization and functions

(Government agencies), Reporting and

recordkeeping requirements.

17 CFR Part 270

Investment companies.

Text of Amendments

For the reasons set out in the

preamble, Title 17, Chapter II of the

Code of Federal Regulations is amended

to read as follows:

PART 200—ORGANIZATION;

CONDUCT AND ETHICS; AND

INFORMATION AND REQUESTS

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. In § 200.1(a), the word ‘‘trade’’ is

revised to read ‘‘traded’’.

3. Section 200.2 is amended by

revising paragraphs (b), (c), (d), (e), and

(g) to read as follows:
14624 Federal Register / Vol. 60, No. 53 / Monday, March 20, 1995 / Rules and Regulations

§ 200.2 Statutory functions.

* * * * *

(b) Securities Exchange Act of 1934.

This Act requires the filing of

registration applications and annual and

other reports with national securities

exchanges and the Commission, by

companies whose securities are listed

on the exchanges. Annual and other

reports must be filed also by certain

companies whose securities are traded

on the over-the-counter markets. These

must contain financial and other data

prescribed by the Commission for the

information of investors. Material

misstatements or omissions are grounds

for suspension or withdrawal of the

security from exchange trading. This

Act makes unlawful any solicitation of

proxies, authorizations, or consents in

contravention of Commission rules.

These rules require disclosure of

information about the subject of the

solicitation to security holders. The Act

requires disclosure of the holdings and

the transactions by an officer, director,

or beneficial owner of over 10 percent

of any class of equity security of certain

companies. It also requires disclosure of

the beneficial owners of more than five

percent of any class of equity securities

of a registered company. It provides

substantive and procedural protection to

security holders in third-party and

issuer tender offers. The Act also

provides for the registration with, and

regulation by, the Commission of

national securities exchanges, brokers or

dealers engaged in an over-the-counter

securities business, and national

associations of such brokers or dealers.

It gives the Commission rulemaking

power with respect to short sales,

stabilizing, floor trading activities of

specialists and odd-lot dealers, and such

matters as excessive trading by

exchange members. The Act authorizes

the Board of Governors of the Federal

Reserve System to prescribe minimum

margin requirements for listed

securities.

(c) Public Utility Holding Company

Act of 1935. This Act authorizes the

Commission to regulate gas and electric

public-utility holding companies under

standards prescribed for the protection

of the public interest and the interest of

investors and consumers. The Act

generally limits a public-utility holding

company to a single integrated publicutility system, and requires simple

corporate and capital structures. If not

exempt, a public-utility holding

company must register with the

Commission. Generally, a registered

holding company must obtain

Commission approval before it can issue

and sell securities, acquire utility

securities or assets or any other interest

in any business, or enter into

transactions with its affiliates. It must

also comply with extensive reporting

and record-keeping requirements.

Although largely free of these

requirements, an exempt holding

company remains subject to the

geographic limitations of the Act. The

Act permits the acquisition of interests

in ‘‘exempt wholesale generators’’ and

‘‘foreign utility companies’’ unrelated to

a system’s utility operations.

(d) Trust Indenture Act of 1939. This

Act safeguards the interests of

purchasers of publicly-offered debt

securities issued under trust indentures

by requiring the inclusion of certain

protective provisions in, and the

exclusion of certain types of exculpatory

clauses from, trust indentures. The Act

also requires that an independent

indenture trustee represent the debtors

by proscribing certain relationships that

could conflict with proper exercise of

duties.

(e) Investment Company Act of 1940.

This Act establishes a comprehensive

regulatory framework for investment

companies and subjects their activities

to regulation under standards prescribed

for the protection of investors. Among

other things, the Act provides for the

registration of investment companies

with the Commission; requires them to

disclose their financial condition and

investment policies to their

shareholders; prohibits them from

substantially changing investment

policies without shareholder approval;

bars persons guilty of securities fraud

from serving as officers or directors;

prevents underwriters, investment

bankers, or brokers from constituting

more than a minority of the directors of

an investment company; requires that

management contracts be submitted to

shareholders for their approval;

prohibits transactions between

investment companies and their

directors, officers, or affiliated

companies or persons, except when

approved by the Commission; and

prohibits investment companies from

issuing senior securities except under

specified terms and conditions. The Act

also regulates advisory fees, sales and

repurchases of securities, exchange

offers, and other activities of investment

companies. The Act authorizes the

Commission to exempt any person or

class of persons or securities from any

provisions of, or rules under, the Act

and to conduct any investigation it

deems necessary to determine existing

or potential violations of the Act. It also

authorizes the Commission to prepare

reports to security holders on the

fairness of plans of reorganization,

merger, or consolidation. The

Commission may institute a court action

to enjoin acts or practices of

management involving, among other

things, a breach of fiduciary duty and

the consummation of plans of

reorganization, merger, or consolidation

that are grossly unfair to security

holders.

(f) * * *

(g) Chapter 11 of the Bankruptcy

Code. Chapter 11 of the Bankruptcy

Code (11 U.S.C. 1101 et seq.) provides

for Commission participation as a

statutory party in reorganization cases.

Under section 1109(a) of the Bankruptcy

Code (11 U.S.C. 1109(a)), which also

applies to Chapter 9 cases regarding

municipalities, the Commission ‘‘may

raise and may appear and be heard on

any issue in the case.’’

4. In § 200.12, the word ‘‘judges’’ is

revised to read ‘‘judges and the

Inspector General’’.

5. Section 200.13 is revised to read as

follows:

§ 200.13 Executive Director.

(a) The Executive Director is

responsible for developing and

executing the overall management

policies of the Commission for all its

operating divisions and staff offices. The

Executive Director also provides

executive direction to, and exercises

administrative control over, the Office

of Administrative and Personnel

Management, the Office of the

Comptroller, the Office of Filings and

Information Services, the Office of

Freedom of Information and Privacy Act

Operations, and the Office of

Information Technology. In addition,

the Executive Director implements the

following statutes, regulations, and

Executive orders, as well as those that

the Chairman may designate:

(1) Paperwork Reduction Act of 1980

(44 U.S.C. 3501 et seq.).

(2) Small and Disadvantaged Business

Utilization Program (15 U.S.C. 631 et

seq.).

(3) Government Printing and Binding

Regulations, U.S. Congress Joint

Committee on Printing (1977).

(4) Occupational Safety and Health

Programs for Federal Employees under

Executive Order 12196 of February 26,

1980 (29 CFR 1960.1–1960.90).

(5) Federal Managers’ Financial

Integrity Act of 1982 (31 U.S.C. 3512).

(6) National Security Information

under Executive Order 12356 of April 6,

1982.

(7) Government Performance and

Results Act of 1993 (31 U.S.C. 1101 et

seq.).

(8) Recommendations of the Report of

the National Performance Review

(September 1993).
Federal Register / Vol. 60, No. 53 / Monday, March 20, 1995 / Rules and Regulations 14625

(b) The Executive Director appoints

personnel, reviews and approves

policies and procedures, and assures

appropriate resources to implement the

programs set forth in paragraph (a) of

this section, and authorizes and

transmits reports required by them.

(c) The Executive Director also

designates certifying officers for agency

payments, prescribes procurement

regulations, enters into contracts,

designates contracting officers, and

makes procurement determinations.

(d) As the Chief Operating Officer of

the Commission, the Executive Director

shall be responsible for:

(1) Implementing the goals of the

President and the Chairman and the

mission of the Commission;

(2) Providing overall organizational

management to improve agency

performance;

(3) Assisting the Chairman in

promoting ongoing quality

improvement, developing strategic

plans, and measuring results;

(4) Directing ongoing reengineering of

the Commission’s administrative

processes;

(e) Overseeing Commission-specific

application of performance measures,

procurement reforms, personnel

reductions, financial management

improvements, telecommunications and

information technology policies, and

other government-wide systems reforms

adopted as a result of the

recommendations of the National

Performance Review; and

(f) Reforming the Commission’s

management practices by incorporating

the principles of the National

Performance Review into day-to-day

management.

6. In § 200.13b, the words ‘‘Public

Affairs’’ are revised to read ‘‘Public

Affairs, Policy Evaluation, and

Research’’ in the section heading and in

the text, and the words ‘‘coordination

and production of the Annual Report to

Congress,’’ are removed.

7. Section 200.14 is revised to read as

follows:

§ 200.14 Office of Administrative Law

Judges.

(a) Under the Administrative

Procedure Act (5 U.S.C. 551–559) and

the federal securities laws, the Office of

Administrative Law Judges conducts

hearings in proceedings instituted by

the Commission. The Administrative

Law Judges are responsible for the fair

and orderly conduct of the proceedings

and have the authority to:

(1) Administer oaths and affirmations;

(2) Issue subpoenas;

(3) Rule on offers of proof;

(4) Examine witnesses;

(5) Regulate the course of a hearing;

(6) Hold pre-hearing conferences;

(7) Rule upon motions; and

(8) Unless waived by the parties,

prepare an initial decision containing

the conclusions as to the factual and

legal issues presented, and issue an

appropriate order.

(b) The Chief Administrative Law

Judge performs the duties of an

Administrative Law Judge under the

Administrative Procedure Act and the

duties delegated to him or her by the

Commission that are compatible with

those duties. The Chief Administrative

Law Judge is responsible for the orderly

functioning of the Office of

Administrative Law Judges apart from

the conduct of administrative

proceedings and acts as liaison between

that Office and the Commission.

8. Section 200.16a is revised to read

as follows:

§ 200.16a Inspector General.

(a) Under the Inspector General Act of

1978, as amended, (5 U.S.C. app.) the

Inspector General performs independent

and objective investigations and audits

relating to the Commission’s programs

and operations. An investigation seeks

to detect and prevent waste, fraud, and

abuse in the Commission’s programs

and operations, such as violations of

federal statutes or regulations by

contractors and Commission employees

or the Standards Of Ethical Conduct For

Employees of the Executive Branch. An

audit seeks to determine whether:

(1) Program goals and results

identified in enabling legislation are

achieved.

(2) Resources are efficiently and

economically used and managed.

(3) Financial operations are properly

conducted.

(4) Financial reports are fairly

presented.

(5) Applicable laws and regulations

are complied with.

(b) In cooperation with Commission

management, the Inspector General

generally promotes economy, efficiency,

and the effectiveness of waste or fraud

detection and prevention in the

Commission’s programs and operations.

The Inspector General also keeps the

Congress and the Chairman informed

about problems and deficiencies in the

Commission’s programs and operations.

(c) The Inspector General reports to

the Chairman, but is independent of all

other Commission management. In

addition, the Inspector General

independently prepares semi-annual

reports to the Congress.

(d) With respect to misconduct of

Commission employees and contractors,

the Inspector General, after consultation

with the Ethics Counsel, where

appropriate, serves as the Commission’s

liaison with other federal audit and

investigative agencies, such as the

Department of Justice and the Executive

Council on Integrity and Efficiency.

(e) Subpoenas issued in the course of

an audit or investigation conducted by

the Office of the Inspector General shall

be effected by any method prescribed by

§ 201.232(a) and (c) of this chapter.

9. Section 200.17 is revised to read as

follows:

§ 200.17 Chief Management Analyst.

The Chief Management Analyst is

responsible to the Executive Director for

overseeing the performance of

management analysis tasks which

pertain, but are not limited, to:

(a) Agency work methods and

procedures;

(b) Effective personnel and resource

allocation and utilization;

(c) Organizational structures and

delegations of authority;

(d) Management information systems

and concepts; and

(e) The preparation of recurring

special reports and analyses.

10. In § 200.18(b)(3), the words

‘‘information material’’ are revised to

read ‘‘information statements’’.

11. In § 200.18(b)(5), the words

‘‘Section 16(a) thereof (15 U.S.C.

78p(a))’’ are revised to read ‘‘Section 16

thereof (15 U.S.C. 78p)’’.

12. The introductory text of § 200.19a

is revised to read as follows:

§ 200.19a Director of the Division of

Market Regulation.

The Director of the Division of Market

Regulation is responsible to the

Commission for the administration and

execution of the Commission’s programs

under the Securities Exchange Act of

1934 relating to the structure and

operation of the securities markets and

the prevention of manipulation in the

securities markets. These

responsibilities include oversight of the

national market system, the national

clearance and settlement system, and

self-regulatory organizations, such as

the national securities exchanges,

registered securities associations,

clearing agencies, the Municipal

Securities Rulemaking Board, and the

Securities Investor Protection

Corporation. Duties also include the

registration and regulation of brokers,

dealers, municipal securities dealers,

government securities brokers and

dealers, transfer agents, and securities

information processors. The functions

involved in the regulation of such

entities include reviewing proposed rule

changes of self-regulatory organizations,
14626 Federal Register / Vol. 60, No. 53 / Monday, March 20, 1995 / Rules and Regulations

recommending the adoption and

amendment of Commission rules,

responding to interpretive, exemptive,

and no-action requests, and conducting

inspections, examinations, and market

surveillance. In addition, the Director

shall have the duties specified below:

* * * * *

13. Section 200.19b is revised to read

as follows:

§ 200.19b Director of the Division of

Enforcement.

The Director of the Division of

Enforcement is responsible to the

Commission for supervising and

conducting all enforcement activities

under the acts administered by the

Commission. The Director recommends

the institution of administrative and

injunctive actions arising out of such

enforcement activities and determines

the sufficiency of evidence to support

the allegations in any proposed

complaint. The Director supervises the

Regional Directors and, in collaboration

with the General Counsel, reviews cases

to be recommended to the Department

of Justice for criminal prosecution. The

Director grants or denies access to

nonpublic information in the

Commission’s enforcement files under

§ 240.24c–1 of this chapter; provided

that access under that section shall be

granted only with the concurrence of

the head of the division or office

responsible for the information or the

files containing it.

14. Section 200.20b is amended by

revising the last sentence of the

introductory text, revising paragraph (f),

and removing paragraph (g) to read as

follows:

§ 200.20b Director of Division of

Investment Management.

* * * These duties shall include

inspections arising in connection with

such administration but shall exclude

enforcement and related activities under

the jurisdiction of the Division of

Enforcement.

* * * * *

(f) The administration and execution

of the Public Utility Holding Company

Act of 1935 in connection with:

(1) The administration and processing

of proxy solicitation material subject to

§§ 240.14a–1—240.14a–14 of this

chapter.

(2) The examination and processing of

ownership reports filed under section

17(a) of the Act (15 U.S.C. 79q(a)).

15. In § 200.20c, the words

‘‘Applications and Reports’’ are revised

to read ‘‘Filings and Information’’ in the

section heading and in the text, the last

sentence is removed, and two new

sentences are added in its place to read

as follows:

§ 200.20c Office of Filings and Information

Services.

* * * The Office provides filersupport services relating to the

Commission’s EDGAR system and the

receipt of fees and filings for all types

of filers, regardless of filing media. The

Office also manages the Commission’s

public reference facilities to facilitate

public access to electronic filings and

ensure that all information contained in

public filings with the Commission is

timely made available to investors.

16. Paragraph (a) of § 200.21 is

amended by:

(a) Adding in the second sentence

after the words ‘‘District Courts,’’ the

words ‘‘except for law enforcement

actions filed on behalf of the

Commission,’’;

(b) Revising in the fourth sentence the

words ‘‘officer’’ to read ‘‘office’’ and

‘‘professional persons’’ to read

‘‘lawyers’’;

(c) Removing at the end of the fifth

sentence the words ‘‘and is responsible

for investigating any claims of staff

improprieties’’;

(d) Revising the sixth sentence to read

‘‘He or she is responsible (with the

Associate Executive Director of the

Office of Administrative and Personnel

Management) for administering the

Commission’s Ethics Program, and (with

the Ethics Counsel) for interpreting

subpart M of this part and 5 CFR part

2635.’’; and

(e) Revising in the seventh sentence

the words ‘‘Personnel Management’’ to

read ‘‘Administrative and Personnel

Management, the Office of the Inspector

General’’.

17. Paragraph (b)(2) of § 200.21 is

amended by adding after the words

‘‘administrative proceedings’’ the words

‘‘against lawyers’’.

18. Section 200.21a is revised to read

as follows:

§ 200.21a The Ethics Counsel.

(a) The Ethics Counsel within the

Office of the General Counsel of the

Commission shall oversee compliance

with subpart M of this part and 5 CFR

part 2635. When appropriate and

subject to the authority of, and in

consultation with, the Inspector

General, the Ethics Counsel shall

inquire into alleged violations of

subparts C, F, and M of this part, and

5 CFR part 2635.

(b) Subject to the oversight of the

General Counsel or his or her delegate,

the Ethics Counsel shall:

(1) Receive and review allegations of

misconduct by a Commission employee.

(2) Refer matters involving

management questions to Division

Directors, Office Heads, District

Administrators, or Regional Directors,

and matters involving alleged or

apparent employee misconduct to the

Office of the Inspector General, except

for matters involving alleged

professional misconduct ultimately

referable to state professional boards or

societies.

(3) Refer complaints that appear to

involve a violation of Federal criminal

statutes, and do not appear to be

frivolous, to the Inspector General for

referral to the Department of Justice

under 28 U.S.C. 535.

(4) Act as liaison with the Office of

the Inspector General on matters that

the Ethics Counsel has referred to that

Office, and with state or local

authorities on matters that, on occasion,

the Ethics Counsel may refer to them.

(5) Arrange for the review of proposed

publications and prepared speeches

under § 200.735–4(e).

(6) Provide advice, counseling,

interpretations, and opinions with

respect to subparts C, F, and M of this

part, and 5 CFR part 2635.

(7) Oversee investigations and refer

findings of professional misconduct to

state professional boards or societies.

(8) Draft rules and regulations as

necessary to implement the

Commission’s Ethics Program.

19. Section 200.22 is revised to read

as follows:

§ 200.22 The Chief Accountant.

The Chief Accountant of the

Commission is the principal adviser to

the Commission on, and is responsible

to the Commission for, all accounting

and auditing matters arising in the

administration of the federal securities

laws. The Chief Accountant oversees the

accounting profession’s standard-setting

and self-regulatory organizations,

develops or supervises the development

of accounting and auditing rules,

regulations, opinions and policy, and

interprets Commission accounting

policy and positions. The Chief

Accountant is responsible for

recommending the institution of

administrative and disciplinary

proceedings relating to the

disqualification of accountants to

practice before the Commission. The

Chief Accountant supervises the

procedures to be followed in the

Commission’s enforcement activities

involving accounting and auditing

issues and helps resolve differences on

accounting issues between registrants

and the Commission staff.

20. Section 200.23a is revised to read

as follows:
Federal Register / Vol. 60, No. 53 / Monday, March 20, 1995 / Rules and Regulations 14627

§ 200.23 Office of Economic Analysis.

The Office of Economic Analysis is

responsible for providing an objective

economic perspective to understand and

evaluate the economic dimension of the

Commission’s regulatory oversight. It

performs economic analyses of

proposed rule changes, current or

proposed policies, and capital market

developments and offers advice on the

basis of these analyses. The Office also

assists the Commission’s enforcement

effort by applying economic analysis

and statistical tools to issues raised in

enforcement cases. It reviews

certifications and initial and final

regulatory flexibility analyses prepared

by the operating divisions under the

Regulatory Flexibility Act.

21. Section 200.23b is removed and

reserved.

22. In the text only of § 200.24, the

word ‘‘Comptroller’’ is revised to read

‘‘Associate Executive Director of the

Office of the Comptroller’’ each time it

appears, the word ‘‘his’’ is revised to

read ‘‘his or her’’ and the word ‘‘serves’’

is revised to read ‘‘serve’’.

23. Section 200.24a is revised to read

as follows:

§ 200.24a Director of the Office of

Consumer Affairs.

The Director of the Office of

Consumer Affairs is responsible to the

Chairman for the Commission’s investor

education and consumer protection

program. The program includes, but is

not limited to:

(a) Presenting seminars and

instructional programs to educate

investors about the securities markets

and their rights as investors; preparing

and distributing to the public materials

describing the operations of the

securities markets, prudent investor

behavior, and the rights of investors in

disputes they may have with

individuals and entities regulated by the

Commission; and increasing public

knowledge of the functions of the

Commission.

(b) Implementing and administering a

nationwide system for resolving

investor complaints against individuals

and entities regulated by the

Commission by processing complaints

received from individual investors and

assuring that regulated individual and

entities process and respond to such

complaints.

(c) Providing information to investors

who inquire about individuals and

entities regulated by the Commission,

the operation of the securities markets,

or the functions of the Commission.

(d) Advising the Commission and its

staff about problems frequently

encountered by investors and possible

solutions to them.

(e) Transmitting to other offices and

divisions of the Commission

information provided by investors

which concerns the responsibilities of

these offices and divisions.

(f) Providing for greater consumer

input in Commission rulemaking

proceedings.

24. Section 200.25 is revised to read

as follows:

§ 200.25 Office of Administrative and

Personnel Management.

(a) The Office of Administrative and

Personnel Management (OAPM) is

responsible for providing a wide variety

of programs for human resources, office

services, and other administrative and

management services for the

Commission. The Associate Executive

Director of the Office of Administrative

and Personnel Management is

responsible to the Executive Director

and the Chairman of the Commission for

developing and executing these

programs.

(b) OAPM develops, implements, and

evaluates the Commission’s programs

for human resources and personnel

management, such as position

management and pay administration;

recruitment, placement, and staffing;

performance management and employee

recognition; employee training and

career development; employee and labor

relations; personnel management

evaluation; employee benefits and

counseling; and the processing and

maintenance of employee records.

OAPM administers the Ethics Program,

and helps the Office of the Executive

Director manage the Senior Executive

Service Program. It reviews requests,

recommendations, and justifications for

certain awards, recruitment and

relocation bonuses, retention

allowances, special salary rates, and

other personnel compensation or benefit

determinations for sufficiency and

compliance with law, regulations, and

Commission policy. OAPM develops

and executes programs for office

services, such as telecommunications;

procurement and contracting; property

management; contract and lease

administration; space acquisition and

management; management of official

vehicles; safety programs; emergency

preparedness plans; physical security;

mail receipt and distribution; and

publications, printing, and desktop

publishing.

(c) With respect to human resources

management, the Associate Executive

Director of the Office of Administrative

and Personnel Management is the

Commission’s liaison with the Office of

Personnel Management, other agencies,

professional organizations, educational

institutions, and private industry. He or

she is also the Printing Liaison with the

Joint Committee on Printing, and the

Contract Officer.

25. Section 200.26 is removed and

reserved.

26. In § 200.26a, the words ‘‘Systems

Management’’ are revised to read

‘‘Technology’’ in the section heading

and in the text.

27. In § 200.27, the phrase ‘‘subject to

policy direction and review by the

Division Directors’’ is revised to read

‘‘subject to review by the Director of the

Division of Enforcement and policy

direction and review by the other

Division Directors’’.

28. Section 200.30–1 is amended by

revising paragraphs (e)(2), (e)(6), (f)(4),

(f)(8), (f)(12), and (g)(2) to read as

follows:

§ 200.30–1 Delegation of authority to

Director of Division of Corporation Finance.

* * * * *

(e) * * *

(2) To authorize the issuance of orders

exempting certain securities from the

Act under sections 304(c) and (d)

thereof (15 U.S.C. 77ddd(c) and

77ddd(d)) and § 260.4c–1 and § 260.4d–

7 of this chapter.

* * * * *

(6) To authorize the issuance of an

order permitting a foreign person to act

as sole trustee under qualified

indentures under section 310(a) of the

Act (15 U.S.C. 77jjj(a)) and § 260.10a–1

through § 260.10a–5 of this chapter.

* * * * *

(f) * * *

(4) To authorize the use of forms of

proxies, proxy statements, or other

soliciting material within periods of

time less than that prescribed in

§§ 240.14a–6, 240.14a–8(d), and

240.14a–11 of this chapter; to authorize

the filing of information statements

within periods of time less than that

prescribed in § 240.14c–5a of this

chapter; and to authorize the filing of

information under § 240.14f–1 of this

chapter within periods of time less than

that prescribed therein.

* * * * *

(8) At the request of the issuer to

accelerate the termination of registration

of any class of equity securities as

provided in section 12(g)(4) of the Act

(15 U.S.C. 78l(g)(4)) or as provided in

§ 240.12g–4(a) of this chapter.

* * * * *

(12) To grant an exemption from

§ 240.14b–2(b) or § 240.14b–2(c), or

both, of this chapter.

* * * * *
14628 Federal Register / Vol. 60, No. 53 / Monday, March 20, 1995 / Rules and Regulations

(g) * * *

(2) The Director of the Division of

Corporation Finance shall have the

same authority as that delegated to each

Regional Director in § 200.30–6(a) and

(c).

29. Section 200.30–3 is amended by

revising paragraphs (a)(21), (a)(22), and

(a)(32), adding an introductory text to

paragraph (a)(35), and revising

paragraph (a)(35)(i), the introductory

text to paragraph (a)(39), and paragraphs

(a)(39)(ii) and (a)(42) to read as follows:

§ 200.30–3 Delegation of authority to

Director of Division of Market Regulation.

(a) * * *

(21) Under section 17A(c)(4)(B) of the

Act (15 U.S.C. 78q–1(c)(4)(B)), to set

terms and conditions upon which

transfer agents registered with the

Commission may withdraw from

registration as a transfer agent by filing

a written notice of withdrawal.

(22) Under section 17A(c)(4)(B) of the

Act (15 U.S.C. 78q–1(c)(4)(B)), to

authorize the issuance of orders

canceling registrations of transfer agents

registered with the Commission or

denying applications for registration as

a transfer agent with the Commission, if

such transfer agents are no longer in

existence or are not engaged in business

as transfer agents.

* * * * *

(32) Under § 240.10b–10(f) of this

chapter, to grant exemptions from

§ 240.10b–10 of this chapter.

* * * * *

(35) Under § 240.13e–4(h)(8) of this

chapter:

(i) To grant exemptions from

§ 240.13e–4 of this chapter; and

* * * * *

(39) Under § 240.9b–1 of this chapter:

(i) * * *

(ii) To require refiling of an

amendment to an options disclosure

document pursuant to the procedure set

forth in § 240.9b–1(b)(2)(i) of this

chapter.

* * * * *

(42) Under § 240.11Aa3–2(f) of this

chapter, to grant or deny exemptions

from § 240.11Aa3–2 of this chapter.

* * * * *

30. Section 200.30–4(a)(2) is revised

to read as follows:

§ 200.30–4 Delegation of authority to

Director of Division of Enforcement.

* * * * *

(a) * * *

(2) In nonpublic investigative

proceedings, to grant requests of persons

to procure copies of the transcript of

their testimony under § 203.6 of this

chapter.

* * * * *

31. Section 200.30–5 is amended by

revising paragraphs (a)(1), (a)(2), (b), (d),

(e)(3), and (e)(4), adding paragraphs

(f)(1)(xxiv) and (f)(1)(xxv), removing

paragraphs (g) and (h), redesignating

present paragraphs (i), (j), (k), (l), (m),

and (n) as paragraphs (g), (h), (i), (j), (k),

and (l), respectively, and revising newly

designated paragraph (g)(1) to read as

follows:

§ 200.30–5 Delegation of Authority to

Director of Division of Investment

Management.

* * * * *

(a) * * *

(1) Except as otherwise provided in

this section, to issue notices, under

§ 270.0–5 of this chapter, with respect to

applications for orders under the Act

and the rules and regulations

thereunder and, with respect to section

8(f) of the Act (15 U.S.C. 80a–8(f)), in

cases where no application has been

filed, where, upon examination, the

matter does not appear to the Director

to present significant issues that have

not been previously settled by the

Commission or to raise questions of fact

or policy indicating that the public

interest or the interest of investors

warrants that the Commission consider

the matter.

(2) Except as otherwise provided in

this section, to authorize the issuance of

orders where a notice, under § 270.0–5

of this chapter, has been issued and no

request for a hearing has been received

from any interested person within the

period specified in the notice and the

Director believes that the matter

presents no significant issues that have

not been previously settled by the

Commission and it does not appear to

the Director to be necessary in the

public interest or the interest of

investors that the Commission consider

the matter.

(b) With respect to matters pertaining

to investment companies registered

under the Investment Company Act of

1940 (15 U.S.C. 80a et seq.), pooled

investment funds or accounts, and the

general assets or separate accounts of

insurance companies, all arising under

the Securities Act of 1933 (15 U.S.C.

77a, et seq.), the Securities Exchange

Act of 1934 (15 U.S.C. 78a, et seq.), and

the Trust Indenture Act of 1939 (15

U.S.C. 77aaa, et seq.), the same

functions as are delegated to the

Director of the Division of Corporation

Finance in regard to companies other

than such investment companies in

paragraphs (a), (e), and (f) of § 200.30–

1.

* * * * *

(d) To issue certifications to

investment companies that are

principally engaged in the furnishing of

capital to corporations that are

principally engaged in the development

or exploitation of inventions,

technological improvements, new

processes, or products not previously

generally available, under Section

851(e) of the Internal Revenue Code of

1986 (26 U.S.C. 851(e)), where

applications from the investment

companies do not present issues that

have not been previously settled by the

Commission and do not require a

hearing.

(e) * * *

(3) To issue notices, under § 275.0–5

of this chapter, with respect to

applications for orders under the Act

and the rules and regulations

thereunder where, upon examination,

the matter does not appear to the

Director to present significant issues

that have not been previously settled by

the Commission or to raise questions of

fact or policy indicating that the public

interest or the interest of investors

warrants that the Commission consider

the matter.

(4) To authorize the issuance of orders

where a notice, pursuant to § 275.0–5 of

this chapter, has been issued, no request

for a hearing has been received from any

interested person within the period

specified in the notice, and the Director

believes that the matter presents no

significant issues that have not been

previously settled by the Commission

and it does not appear to the Director to

be necessary in the public interest or the

interest of investors that the

Commission consider the matter.

* * * * *

(f) * * *

(1) * * *

(xxiv) Section 32, 15 U.S.C. 79ff.

(xxv) Section 33, 15 U.S.C. 79gg.

(g) * * *

(1) The Director of the Division of

Investment Management shall have the

same authority with respect to the

Securities Act of 1933 (15 U.S.C. 77a, et

seq.), §§ 230.251–230.263, and

§§ 230.651–230.703(T) of this chapter as

that delegated to each Regional Director

in § 200.30–6 (b) and (c).

32. Section 200.30–6 is amended by

revising the introductory text of

paragraph (a) to read as follows:

§ 200.30–6 Delegation of authority to

Regional Directors.

* * * * *

(a) With respect to the registration of

securities on Forms SB–1 and SB–2

(§§ 239.9 and 239.10 of this chapter)

filed in the regional office under the

Securities Act of 1933 (15 U.S.C. 77a et
Federal Register / Vol. 60, No. 53 / Monday, March 20, 1995 / Rules and Regulations 14629

seq.) and §§ 230.400 et seq. of this

chapter:

* * * * *

33. Section 200.30–7(a)(4) is revised

to read as follows:

§ 200.30–7 Delegation of authority to

Secretary of the Commission.

* * * * *

(a) * * *

(4) To grant or deny extensions of

time within which to file papers with

the Commission under § 201.13 of this

chapter.

34. Section 200.30–9 is revised to read

as follows:

§ 200.30–9 Delegation of authority to

Administrative Law Judges.

Under Pub. L. 87–592, 76 Stat. 394 (15

U.S.C. 78d–1), the Securities and

Exchange Commission hereby delegates,

until the Commission orders otherwise,

to each Administrative Law Judge

(‘‘Judge’’) the authority to make the

initial decision in any proceeding at

which the Judge presides in which a

hearing is required to be conducted in

conformity with the Administrative

Procedure Act (5 U.S.C. 557) unless an

initial decision is waived by all parties

that appear at the hearing and the

Commission does not subsequently

order that an initial decision

nevertheless be made by the Judge, and

in any other proceeding in which the

Commission directs the Judge to make

an initial decision.

35. Section 200.30–11 is amended by

revising the section heading, the

introductory text, and paragraphs (a),

(b), and (d) to read as follows:

§ 200.30–11 Delegation of authority to

Associate Executive Director of the Office

of Filings and Information Services.

Under Pub. L. 87–592, 76 Stat. 394 (15

U.S.C. 78d–1, 78d–2), the Securities and

Exchange Commission hereby delegates

the following functions to the Associate

Executive Director of the Office of

Filings and Information Services to be

performed by him or her or under his

or her direction by such person or

persons as the Chairman of the

Commission may designate from time to

time:

(a) With respect to the Securities

Exchange Act of 1934 (15 U.S.C. 78a, et

seq.):

(1) Under section 15(b) of the Act (15

U.S.C. 78o(b)):

(i) To authorize the issuance of orders

granting registration of brokers or

dealers within 45 days of the acceptance

of an application for registration as a

broker or dealer (or within such longer

period as to which the applicant

consents);

(ii) To grant registration of brokers or

dealers sooner than 45 days after

acceptance of an application for

registration;

(iii) To authorize the issuance of

orders canceling registrations of brokers

or dealers, or pending applications for

registration, if such brokers or dealers or

applicants for registration are no longer

in existence or are not engaged in

business as brokers or dealers; and

(iv) To determine whether notices of

withdrawal from registration on Form

BDW shall become effective sooner than

the normal 60-day waiting period.

(2) Under section 15B(a) of the Act (15

U.S.C. 78o–4(a)):

(i) To authorize the issuance of orders

granting registration of municipal

securities dealers within 45 days of the

filing of acceptable applications for

registration as a municipal securities

dealer (or within such longer period as

to which the applicant consents); and

(ii) To grant registration of municipal

securities dealers sooner than 45 days

after receipt by the Commission of

acceptable applications for registration.

(3) Under section 15B(c) of the Act (15

U.S.C. 78o–4(c)):

(i) To authorize the issuance of orders

canceling registrations of municipal

securities dealers, or pending

applications for registration, if such

municipal securities dealers or

applicants for registration are no longer

in existence or are not engaged in

business as municipal securities dealers;

and

(ii) To determine whether notices of

withdrawal from registration on Form

MSDW shall become effective sooner

than the normal 60-day waiting period.

(4) Under section 15C(a) of the Act (15

U.S.C. 78o–5(a)):

(i) To authorize the issuance of orders

granting registration of government

securities brokers or government

securities dealers for which the

Commission is the appropriate

regulatory agency within 45 days of the

acceptance of an application for

registration as a government securities

broker or government securities dealer

(or within such longer period as to

which the applicant consents); and

(ii) To grant registration of

government securities brokers or

government securities dealers for which

the Commission is the appropriate

regulatory agency sooner than 45 days

after acceptance of an application for

registration.

(5) Under section 15C(c) of the Act (15

U.S.C. 78o–5(c)):

(i) To authorize the issuance of orders

canceling registrations of government

securities brokers or government

securities dealers registered with the

Commission, or pending applications

for registration, if such government

securities brokers or government

securities dealers or applicants for

registration are no longer in existence or

are not engaged in business as

government securities brokers or

government securities dealers; and

(ii) To determine whether notices of

withdrawal from registration on Form

BDW shall become effective sooner than

the normal 60-day waiting period.

(6) Under section 17A(c) of the Act

(15 U.S.C. 78q–1(c)):

(i) To authorize the issuance of orders

granting registration of transfer agents

within 45 days of the filing of

acceptable applications for registration

as a transfer agent (or within such

longer period as to which the applicant

consents);

(ii) To grant registration of transfer

agents sooner than 45 days after receipt

by the Commission of acceptable

applications for registration;

(iii) To authorize the issuance of

orders canceling registrations of transfer

agents, or pending applications for

registration, if such transfer agents or

applicants for registration are no longer

in existence or are not engaged in

business as transfer agents; and

(iv) To determine whether notices of

withdrawal from registration on Form

TA–W shall become effective sooner

than the normal 60-day waiting period.

(b) With respect to the Investment

Advisers Act of 1940 (15 U.S.C. 80b–1

et seq.):

(1) Under section 203(c) of the Act (15

U.S.C. 80b–3(c)):

(i) To authorize the issuance of orders

granting registration of investment

advisers within 45 days of the filing of

acceptable applications for registration

as an investment adviser (or within such

longer period as to which the applicant

consents); and

(ii) To grant registration of investment

advisers sooner than 45 days after

receipt by the Commission of acceptable

applications for registration.

(2) Under section 203(h) of the Act (15

U.S.C. 80b–3(h)):

(i) To authorize the issuance of orders

canceling registrations of investment

advisers, or pending applications for

registration, if such investment advisers

or applicants for registration are no

longer in existence or are not engaged in

business as investment advisers; and

(ii) To determine whether notices of

withdrawal from registration on Form

ADV–W shall become effective sooner

than the normal 60-day waiting period.

(c) * * *

(d) Notwithstanding anything in the

foregoing, in any case in which the

Associate Executive Director of the
14630 Federal Register / Vol. 60, No. 53 / Monday, March 20, 1995 / Rules and Regulations

Office of Filings and Information

Services believes it appropriate, he or

she may submit the matter to the

Commission.

* * * * *

36. Section 200.30–12 is removed and

reserved.

37. In § 200.30–13, the word

‘‘Comptroller’’ in the heading and the

words ‘‘Comptroller of the Commission’’

in the text are revised to read ‘‘Associate

Executive Director of the Office of the

Comptroller’’.

38. In § 200.30–14, remove the

semicolon at the end of paragraph (a)

and ‘‘; and’’ at the end of paragraph (b)

and add in both their places a period.

39. Section 200.30–15 is revised to

read as follows:

§ 200.30–15 Delegation of authority to

Executive Director.

Under Pub. L. 100–181, 101 Stat. 1254

(15 U.S.C. 78d–1, 78d–2), the Securities

and Exchange Commission hereby

delegates, until the Commission orders

otherwise, the following functions to the

Executive Director to be performed by

him or her or under his or her direction

by persons designated by the Chairman

of the Commission: To identify and

implement additional changes within

the Commission that will promote the

principles and standards of the National

Performance Review and the strategic

and quality management approaches

described by the Federal Quality

Institute’s ‘‘Presidential Award for

Quality’’ or its successor awards.

PART 270—RULES AND

REGULATIONS, INVESTMENT

COMPANY ACT OF 1940

40. The authority citation for part 270

continues to read in part as follows:

Authority: 15 U.S.C. 80a–1 et seq., 80a–37,

80a–39, unless otherwise noted;

* * * * *

41. In the last sentence of § 270.8b–

25(b), the words ‘‘(j) and (k)’’ are revised

to read ‘‘(h) and (i)’’.

By the Commission.

Dated: March 14, 1995.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–6696 Filed 3–17–95; 8:45 am]

BILLING CODE 8010–01–P

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 10

[T.D. 95–22]

RIN 1515–AB65

Temporary Importation Bonds;

Anticipatory Breach, Assessment

Amounts, Petitions for Relief

AGENCY: Customs Service, Department

of the Treasury.

ACTION: Final rule.

SUMMARY: This document amends the

Customs Regulations to permit

anticipatory breach and provide for

early payment of liquidated damages in

Temporary Importation Bond (TIB)

cases. It also amends the regulations to

permit assessment of liquidated

damages in excess of double the duties

in those cases where the district director

requires extra bonding in order to

protect the revenue and to state that the

term ‘‘duties’’ for TIB assessment shall

also include any applicable

merchandise processing fees that

otherwise would be charged on an entry

for consumption. Finally, the document

amends the regulations to eliminate

forwarding of petitions for relief in TIB

cases to Customs Headquarters when

the bond principal or surety is

dissatisfied with the decision on the

petition afforded by the district director.

EFFECTIVE DATE: April 19, 1995.

FOR FURTHER INFORMATION CONTACT:

Jeremy Baskin, Penalties Branch, Office

of Regulations and Rulings, 202–482–

6950.

SUPPLEMENTARY INFORMATION:

Background

Under the provisions of Chapter 98,

Subchapter XIII, Harmonized Tariff

Schedule of the United States (HTSUS),

merchandise may be entered under the

terms of a Temporary Importation Bond

(TIB) without the payment of duties if

the merchandise is entered for a specific

purpose enumerated in Subchapter XIII,

HTSUS. Per U.S. Note 1 to Subchapter

XIII, the merchandise is permitted to

remain in the United States for a oneyear period subsequent to the date of

importation (with a maximum of two

one-year extensions allowed). Prior to

the expiration of the bond period or any

properly approved extension thereof,

the merchandise must be exported or

destroyed under Customs supervision.

Failure to export or destroy in a timely

manner results in the imposition of

liquidated damages against the

importer.

Instances arise where, after initiation

of a TIB entry, the importer decides that

the merchandise will remain in the

United States in violation of the terms

of the bond. Rather than wait for the

one-year period to end and for

liquidated damages to be assessed,

importers inquired as to the possibility

of early payment of liquidated damages.

The Customs Regulations currently do

not provide for an anticipatory breach of

a TIB.

In a Notice of Proposed Rulemaking

(NPRM) published in the Federal

Register of September 29, 1992 (57 FR

44714), it was proposed to amend the

regulations to permit anticipatory

breach of a TIB and allow the importer

to pay the full measure of liquidated

damages and thereby close the bond.

Through payment of the liquidated

damages, the importer would waive his

right to receipt of notice of a claim for

liquidated damages pursuant to

§ 172.1(a), Customs Regulations (19 CFR

172.1(a)).

For TIB entries, the provisions of

§ 10.31(f) of the Customs Regulations

(19 CFR 10.31(f)) require that a bond

shall be given containing the conditions

set forth in § 113.62 of the Customs

Regulations (19 CFR 113.62) in an

amount equal to double the duties

which it is estimated would have

accrued (or such larger amount as the

district director shall state in writing to

the entrant is necessary to protect the

revenue) had all the articles covered by

the entry been entered under an

ordinary consumption entry. By

contrast, under the provisions of

§ 10.39(d), if any article entered under

Chapter 98, Subchapter XIII, HTSUS,

has not been exported or destroyed in

accordance with the regulations within

the period of time during which the

articles may remain in the Customs

territory of the United States under

bond (including any lawful extension),

the district director shall make a

demand in writing under the bond for

the payment of liquidated damages

equal to double the estimated duties

applicable to such entry, unless a lower

amount is prescribed by § 10.31(f).

On the one hand, § 10.31(f) empowers

the district director to require a bond in

excess of double the duties, but the

provisions of § 10.39(d) only permit him

to assess liquidated damages at double

the estimated duties or such lower

amount (emphasis added) as prescribed

by § 10.31(f). These regulations can

provide anomalous results and

inefficient protection of the revenue.

Accordingly, the NPRM proposed an

amendment to the regulations to permit,

in the case of breach of a TIB,

assessment of liquidated damages in an