Document ID: SEC-2008-0210-0001
Agency: sec
Document Type: Rule
Title: Delegation of Authority to the Director of the Division of Corporation Finance
Posted Date: 2008-02-07T05:00Z

[Federal Register: February 7, 2008 (Volume 73, Number 26)]
[Rules and Regulations]               
[Page 7205-7206]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07fe08-8]                         

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 200

[Release No. 34-57262]

 
Delegation of Authority to the Director of the Division of 
Corporation Finance

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: The Securities and Exchange Commission is amending its Rules 
of Organization and Program Management to delegate its authority to the 
Director of the Division of Corporation Finance to grant or deny 
exemptions pursuant to Section 36 of the Securities Exchange Act of 
1934 from the requirement for registrants in connection with an annual 
meeting of security holders to furnish an annual report to security 
holders that contains audited financial statements as required by rules 
under the Exchange Act under certain limited circumstances. The 
delegation of authority is intended to conserve Commission resources by 
permitting the staff to review and act on exemptive applications under 
Section 36 when appropriate.

DATES: Effective Date: February 7, 2008.

FOR FURTHER INFORMATION CONTACT: Celeste M. Murphy, Special Counsel, at 
(202) 551-3440, Office of Mergers and Acquisitions, Division of 
Corporation Finance, Securities and Exchange Commission, 100 F Street, 
NE., Washington, DC 20549-3628.

SUPPLEMENTARY INFORMATION: The Commission today announces an amendment 
to its Organization and Program Management Rules governing Delegations 
of Authority to the Director of the Division of Corporation Finance.\1\ 
The amendment adds to Rule 30-1 a new paragraph (e)(18) authorizing the 
Director to grant or deny exemptions from the requirements of Rule 14a-
3(b) and Rule 14c-3(a) under the Exchange Act, pursuant to Section 36 
of the Exchange Act, for audited financial statements to be included in 
the annual report to be furnished to security holders in connection 
with an annual meeting of security holders.
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    \1\ 17 CFR 200.30-1.
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    A number of companies have faced the dilemma of being required to 
hold a meeting of security holders when they are unable to deliver 
current audited financial statements. These companies may be compelled 
to hold meetings of their security holders pursuant to the provisions 
of certain state corporation

[[Page 7206]]

laws, despite the inability to comply with the requirements of Rule 
14a-3(b) and Rule 14c-3(a) under the Exchange Act. Although these 
situations are infrequent, we recognize the need to flexibly address 
this conflict in limited circumstances.
    Section 36(a) provides that ``the Commission, by rule, regulation, 
or order, may conditionally or unconditionally exempt any person, 
security, or transaction, or any class or classes of persons, 
securities, or transactions, from any provision or provisions of this 
title or of any rule or regulation thereunder, to the extent that such 
exemption is necessary or appropriate in the public interest, and is 
consistent with the protection of investors.'' \2\ Section 4A(a) of the 
Exchange Act grants the Commission ``the authority to delegate, by 
published order or rule, any of its functions to a division of the 
Commission.'' \3\
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    \2\ 15 U.S.C. 78mm(a).
    \3\ 15 U.S.C. 78d-1(a).
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    The delegation of authority to the Director is intended to conserve 
Commission resources by permitting the staff, pursuant to Section 
36(a), to review and act on applications for exemption from Rule 14a-
3(b) and Rule 14c-3(a) in cases where upon examination, the matter does 
not appear to present significant issues that have not been addressed 
previously 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. Nevertheless, the staff may submit 
matters to the Commission for consideration as it deems appropriate. In 
addition, under Section 4A(b) of the Exchange Act, the Commission 
retains discretionary authority to review upon its own initiative or, 
pursuant to Commission Rule 430, upon application by a party adversely 
affected, any exemption granted or denied by the Director pursuant to 
delegated authority.\4\
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    \4\ For information concerning the filing of exemptive relief 
applications, see Exchange Act Release No. 39624 (February 5, 1998), 
63 FR 8101 (February 18, 1998); 17 CFR 240.0-12.
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    The Commission finds, in accordance with Section 553(b)(3)(A) of 
the Administrative Procedure Act,\5\ that this amendment relates solely 
to agency organization, procedure, or practice, and does not relate to 
a substantive rule. Accordingly, notice, opportunity for public 
comment, and publication of the amendment prior to its effective date 
are unnecessary.
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    \5\ 5 U.S.C. 553(b)(3)(A).
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List of Subjects in 17 CFR Part 200

    Administrative practice and procedure, Authority delegations 
(Government agencies), Organization and functions (Government 
agencies).

Text of Amendment

0
In accordance with the preamble, the Commission hereby amends Title 17, 
Chapter II of the Code of Federal Regulations as follows:

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

0
1. The authority citation for part 200, subpart A, continues to read in 
part as follows:

    Authority: 15 U.S.C. 77o, 77s, 77sss, 78d, 78d-1, 78d-2, 78w, 
78ll(d), 78mm, 80a-37, 80b-11, and 7202, unless otherwise noted.
* * * * *

0
2. Section 200.30-1 is amended by adding paragraph (e)(18) to read as 
follows:

Sec.  200.30-1  Delegation of authority to Director of Division of 
Corporation Finance.

* * * * *
    (e) * * *
    (18) To review and, either unconditionally or upon specified terms 
and conditions, grant or deny exemptions from the requirements of Rules 
14a-3(b) and 14c-3(a) (Sec. Sec.  240.14a-3(b) and 240.14c-3(a) of this 
chapter) under the Act pursuant to Section 36 of the Act, in cases 
where upon examination, the matter does not appear to the Director to 
present significant issues that have not been addressed previously 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, where an applicant demonstrates that it:
    (i) Is required to hold a meeting of security holders as a result 
of an action taken by one or more of the applicant's security holders 
pursuant to state law;
    (ii) Is unable to comply with the requirements of Rule 14a-3(b) or 
Rule 14c-3(a) under the Act for audited financial statements to be 
included in the annual report to security holders to be furnished to 
security holders in connection with the security holder meeting 
required to be held as a result of the security holder demand under 
state law;
    (iii) Has made a good faith effort to furnish the audited financial 
statements before holding the security holder meeting;
    (iv) Has made a determination that it has disclosed to security 
holders all available material information necessary for the security 
holders to make an informed voting decision in accordance with 
Regulation 14A or Regulation 14C (Sec. Sec.  240.14a-1-240.14b-2 or 
Sec. Sec.  240.14c-1-240.14c-101 of this chapter); and
    (v) Absent a grant of exemptive relief, it would be forced to 
violate either state law or the rules and regulations administered by 
the Commission.
* * * * *

    Dated: February 4, 2008.
    By the Commission.
Nancy M. Morris,
Secretary.
 [FR Doc. E8-2246 Filed 2-6-08; 8:45 am]

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