Document ID: SEC-2014-0166-0001
Agency: sec
Document Type: Proposed Rule
Title: Regulatory Flexibility Act Review
Posted Date: 2014-01-29T05:00Z

[Federal Register Volume 79, Number 19 (Wednesday, January 29, 2014)]
[Proposed Rules]
[Pages 4638-4641]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-01628]

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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 79, No. 19 / Wednesday, January 29, 2014 / 
Proposed Rules  

[[Page 4638]]

SECURITIES AND EXCHANGE COMMISSION

17 CFR Chapter II

[Release Nos. 33-9516, 34-71370, 39-2494, IC-30890; File No. S7-02-14]

List of Rules To Be Reviewed Pursuant to the Regulatory 
Flexibility Act

AGENCY: Securities and Exchange Commission.

ACTION: Publication of list of rules scheduled for review.

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SUMMARY: The Securities and Exchange Commission is today publishing a 
list of rules to be reviewed pursuant to Section 610 of the Regulatory 
Flexibility Act. The list is published to provide the public with 
notice that these rules are scheduled for review by the agency and to 
invite public comment on them.

DATES: Comments should be submitted by February 28, 2014.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/other.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number S7-02-14 on the subject line; or
     Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.

Paper Comments

     Send paper comments to Elizabeth M. Murphy, Secretary, 
Securities and Exchange Commission, 100 F Street NE., Washington, DC 
20549-1090. All submissions should refer to File No. S7-02-14. This 
file number should be included on the subject line if email is used. To 
help us process and review your comments more efficiently, please use 
only one method. The Commission will post all comments on the 
Commission's Internet Web site (http://www.sec.gov/rules/other.shtml). 
Comments also are available for Web site viewing and printing in the 
Commission's Public Reference Room, 100 F Street NE., Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. All comments received will be posted without change; we do 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT: Anne Sullivan, Office of the General 
Counsel, 202-551-5019.

SUPPLEMENTARY INFORMATION: The Regulatory Flexibility Act (``RFA''), 
codified at 5 U.S.C. 600-611, requires an agency to review its rules 
that have a significant economic impact upon a substantial number of 
small entities within ten years of the publication of such rules as 
final rules. 5 U.S.C. 610(a). The purpose of the review is ``to 
determine whether such rules should be continued without change, or 
should be amended or rescinded . . . to minimize any significant 
economic impact of the rules upon a substantial number of such small 
entities.'' 5 U.S.C. 610(a). The RFA sets forth specific considerations 
that must be addressed in the review of each rule:
     The continued need for the rule;
     The nature of complaints or comments received concerning 
the rule from the public;
     The complexity of the rule;
     The extent to which the rule overlaps, duplicates or 
conflicts with other federal rules, and, to the extent feasible, with 
state and local governmental rules; and
     The length of time since the rule has been evaluated or 
the degree to which technology, economic conditions, or other factors 
have changed in the area affected by the rule. 5 U.S.C. 610(c).
    The Securities and Exchange Commission, as a matter of policy, 
reviews all final rules that it published for notice and comment to 
assess not only their continued compliance with the RFA, but also to 
assess generally their continued utility. The list below is therefore 
broader than that required by the RFA, and may include rules that do 
not have a significant economic impact on a substantial number of small 
entities. Where the Commission has previously made a determination of a 
rule's impact on small businesses, the determination is noted on the 
list.
    The Commission particularly solicits public comment on whether the 
rules listed below affect small businesses in new or different ways 
than when they were first adopted.\1\ The rules and forms listed below 
are scheduled for review by staff of the Commission during the next 12 
months. The list includes rules from 2002. When the Commission 
implemented the Act in 1980, it stated that it ``intend[ed] to conduct 
a broader review [than that required by the RFA], with a view to 
identifying those rules in need of modification or even rescission.'' 
Securities Act Release No. 6302 (Mar. 20, 1981), 46 FR 19251 (Mar. 30, 
1981).
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    \1\ Several of the rulemakings identified below included non-
substantive rule amendments, such as conforming cross references. 
The Commission requests that commenters focus on the substantive 
aspects of the rulemakings indicated in the list.
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List of Rules To Be Reviewed

    Title: Requirements for Arthur Andersen LLP Auditing Clients.
    Citation: 17 CFR 210.2-02, 17 CFR 230.401a, 17 CFR 230.437a, 17 CFR 
240.12b-37, and 17 CFR 260.19a-1.
    Authority: 15 U.S.C. 77b, 15 U.S.C. 77d, 15 U.S.C. 77g, 15 U.S.C. 
77h, 15 U.S.C. 77j, 15 U.S.C. 77s, 15 U.S.C. 77z-3, 15 U.S.C. 78c, 15 
U.S.C. 78d, 15 U.S.C. 78j, 15 U.S.C. 78l, 15 U.S.C. 78m, 15 U.S.C. 78n, 
15 U.S.C. 78o, 15 U.S.C. 78w, 15 U.S.C. 78mm, 15 U.S.C. 77ddd, 15 
U.S.C. 77eee, 15 U.S.C. 77ggg, 15 U.S.C. 77hhh, 15 U.S.C. 77jjj, 15 
U.S.C. 77nnn and 15 U.S.C. 77sss.
    Description: The rules were adopted to minimize any disruptions 
that may have occurred as a result of the indictment of Arthur Andersen 
LLP by modifying, in a manner appropriate to the protection of 
investors, the requirements for including audited financial statements 
in registration statements under the Securities Act of 1933 
(``Securities Act'') and filings required by the Trust Indenture Act of 
1939 by registrants that are unable to or elect not to have Andersen 
issue a manually signed audit report, if the audit report was not 
issued on or before March 14, 2002.
    Prior Commission Determination Under 5 U.S.C. 610: Pursuant to 
Section 553(b) of the Administrative Procedure Determination Under Act 
(5 U.S.C. 553(b)(B)) (``APA''), the Commission for

[[Page 4639]]

good cause found that prior notice and public comment was unnecessary. 
Because the Commission found good cause that notice and comment were 
unnecessary, no regulatory flexibility analysis was required. The rules 
were adopted in Release No. 33-8070 (March 18, 2002).

    Title: Registration Form for Insurance Company Separate Accounts 
Registered as Unit Investment Trusts that Offer Variable Life Insurance 
Policies.
    Citation: 17 CFR 239.17c (Securities Act). 17 CFR 274.11d 
(Investment Company Act).
    Authority: 15 U.S.C. 77b, 77c, 77d, 77f, 77g, 77h, 77j, 77r, 77sss, 
77z-3, 78c, 78d, 78l, 78m, 78n, 78o, 78t, 78w, 78ll(d), 78mm, 79t, 80a-
8, 80a-24, 80a-28, 80a-29, 80a-30, 80a-37.
    Description: Form N-6 is a registration form used by separate 
accounts that are unit investment trusts that offer variable life 
insurance contracts to register under Investment Company Act of 1940 
and to offer their securities under the Securities Act of 1933.
    Prior Commission Determination Under 5 U.S.C. 605: A Regulatory 
Flexibility Act Certification was prepared in accordance with 5 U.S.C. 
605(b) in conjunction with the adoption of Release No. 33-8088 (IC-
25522), which was approved by the Commission on April 12, 2002. At that 
time it was noted that the Commission had requested comments on the 
initial certification, which had been attached to the proposing 
release, but had received none.

    Title: Amendment to Definition of ``Equity Security.''
    Citation: 17 CFR 230.405 and 17 CFR 240.3a11-1.
    Authority: 15 U.S.C. 77f, 15 U.S.C. 77g, 15 U.S.C. 77j, 15 U.S.C. 
77s(a), 15 U.S.C. 78c(b), and 15 U.S.C. 78w(a).
    Description: The rule amendments conform the definition of ``equity 
security'' in the rules under the Securities Act and the Securities 
Exchange Act of 1934 (``Exchange Act'') to the statutory definitions 
with respect to security futures established in the Commodity Futures 
Modernization Act of 2000 (``CFMA'').
    Prior Commission Determination Under 5 U.S.C. 610: Pursuant to 
Section 553(b) of the APA, the Commission for good cause found that 
prior notice and public comment was unnecessary. Because the Commission 
found good cause that notice and comment were unnecessary, no RFA 
analysis was required. The rules were adopted in Release No. 33-8091 
(April 17, 2002).

    Title: Mandated EDGAR Filing for Foreign Issuers.
    Citation: 17 CFR 230.493, 17 CFR 239.800, 17 CFR 249.250, 17 CFR 
249.480, and 17 CFR 249.306.
    Authority: 15 U.S.C. 77f, 15 U.S.C. 77g, 15 U.S.C. 77h, 15 U.S.C. 
77j, 15 U.S.C. 77s(a), 15 U.S.C. 78c, 15 U.S.C. 78l, 15 U.S.C. 78m, 15 
U.S.C. 78n, 15 U.S.C. 78o(d), 15 U.S.C. 78w, 15 U.S.C. 78ll, 15 U.S.C. 
77ddd, 15 U.S.C. 77eee, 15 U.S.C. 77ggg, 15 U.S.C. 77jjj, and 15 U.S.C. 
77sss.
    Description: The amendments require foreign private issuers and 
foreign governments to file electronically through the EDGAR system 
most of their securities documents, including registration statements 
under the Securities Act and registration statements, reports and other 
documents under the Exchange Act. The rule amendments also clarify when 
an issuer may submit an English summary instead of an English 
translation of a foreign language document; eliminate the requirement 
that any first-time EDGAR filer, domestic or foreign, submit a paper 
copy of its electronic filing to the Commission; and permit a national 
securities exchange to file voluntarily on EDGAR a Form 25, which 
reports the delisting of a class of a company's securities.
    Prior Commission Determination Under 5 U.S.C. 610: Pursuant to 
Section 605(b) of the RFA, the Chairman of the Commission certified at 
the proposal stage on September 25, 2001 in Release No. 33-8016 that 
the rule revisions would not have a significant economic impact on a 
substantial number of small entities. The SEC solicited comments 
concerning the impact on small entities and the RFA certification, but 
received no comments. The rules were adopted in Release No. 33-8099 
(May 14, 2002).

    Title: Cash Settlement and Regulatory Halt Requirements for 
Security Futures Products.
    Citation: 17 CFR 240.6h-1.
    Authority: 15 U.S.C. 78f, 78i, 78o-3, 78s, 78w(a), and 78mm.
    Description: The Commodity Futures Trading Commission (``CFTC'') 
and SEC adopted this rule generally to require that the final 
settlement price for each cash-settled security futures product fairly 
reflect the opening price of the underlying security or securities, and 
that trading in any security futures product halt when a regulatory 
halt is instituted with respect to a security or securities underlying 
the security futures product by the national securities exchange or 
national securities association listing the security. The rule sets 
forth more specifically how the exchange's or association's rules can 
satisfy provisions added to the Commodity Exchange Act (``CEA'') and 
the Exchange Act by the CFMA.
    Prior Commission Determination Under 5 U.S.C. 610: Pursuant to 
Section 605(b) of the RFA, the Chairman of the Commission certified 
that the adopted rule would not have a significant economic impact on a 
substantial number of small entities. This certification, including the 
reasons therefore, was attached to Proposing Release No. 34-44743 
(August 24, 2001) as Appendix A. The SEC solicited comments concerning 
the impact on small entities and the RFA certification, but received no 
comments. The final rule was adopted in Release No. 34-45956 (May 17, 
2002).

    Title: Assessments on Security Futures Transactions and Fees on 
Sales of Securities Resulting from Physical Settlement of Security 
Futures Pursuant to Section 31 of the Exchange Act.
    Citation: 17 CFR 240.31.
    Authority: 15 U.S.C. 78c(A), 78w(a), and 78ee.
    Description: The amendment clarifies how to calculate assessments 
required to be paid by national securities exchanges and national 
securities associations pursuant to Section 31(d) of the Exchange Act 
for security futures transactions. In addition, the amendment provides 
guidance on how to calculate fees required to be paid by national 
securities exchanges and national securities associations pursuant to 
Sections 31(b) and (c) of the Exchange Act, respectively, for sales of 
securities that result from the physical settlement of security 
futures.
    Prior Commission Determination Under 5 U.S.C. 610: Pursuant to 
Section 605(b) of the RFA, the Chairman of the Commission certified 
that the amendment to the rule would not have a significant economic 
impact on a substantial number of small entities. This certification 
was attached to Proposing Release No. 45854 (May 1, 2002) as Appendix 
A. The SEC solicited comments concerning the impact on small entities 
and the RFA certification, but received no comments. The final rule was 
adopted in Release No. 34-46169. (July 8, 2002).

    Title: Customer Margin Rules Relating to Security Futures.
    Citation: 17 CFR 242.400 through 242.406.
    Authority: 15 U.S.C. 78c(A), 78f, 78g(c), 78o-3, and 78w(a).
    Description: The CFTC and SEC adopted rules to establish margin 
requirements for security futures to preserve the financial integrity 
of markets trading security futures, prevent

[[Page 4640]]

systemic risk, and require that the margin requirements for security 
futures be consistent with the margin requirements for comparable 
exchange-traded option contracts.
    Prior Commission Determination Under 5 U.S.C. 610: Pursuant to 
Section 605(b) of the RFA, the Chairman of the Commission certified 
that the adopted rule would not have a significant economic impact on a 
substantial number of small entities. This certification was attached 
to Proposing Release No. 34-50720 (October 4, 2001) as Appendix A. The 
SEC solicited comments concerning the impact on small entities and the 
RFA certification, but received no comments. The final rules were 
adopted in Release No. 34-46292 (August 1, 2002).

    Title: Certification of Disclosure in Companies' Quarterly and 
Annual Reports.
    Citation: 17 CFR 229.307, 17 CFR 240.13a-10, 17 CFR 240.13a-14, 17 
CFR 240.13a-15, 17 CFR 240.15d-10, 17 CFR 240.15d-14, 17 CFR 240.15d-
15, 17 CFR 240.12b-15, 17 CFR 249.308a, 17 CFR 249.310, 17 CFR 
249.220f, 17 CFR 249.240f, 17 CFR 232.302.
    Authority: 15 U.S.C. 78j(b), 15 U.S.C. 78m, 15 U.S.C. 78o(d), and 
15 U.S.C. 78w(a), 15 U.S.C. 7202, 15 U.S.C. 7241.
    Description: The Commission adopted rules and amendments in light 
of Congress' directive in Section 302 of the Sarbanes-Oxley Act of 
2002. The rules require an issuer's principal executive and financial 
officers each to certify the financial and other information contained 
in the issuer's quarterly and annual reports. The rules also require 
these officers to certify that: they are responsible for establishing, 
maintaining and regularly evaluating the effectiveness of the issuer's 
internal controls; they have made certain disclosures to the issuer's 
auditors and the audit committee of the board of directors about the 
issuer's internal controls; and they have included information in the 
issuer's quarterly and annual reports about their evaluation and 
whether there have been significant changes in the issuer's internal 
controls or in other factors that could significantly affect internal 
controls subsequent to the evaluation. In addition, the rules require 
issuers to maintain, and regularly evaluate the effectiveness of, 
disclosure controls and procedures designed to ensure that the 
information required in reports filed under the Exchange Act is 
recorded, processed, summarized and reported on a timely basis.
    Prior Commission Determination Under 5 U.S.C. 610: A Final 
Regulatory Flexibility Analysis was prepared Determination Under in 
accordance with 5 U.S.C. 604 in conjunction with Release No. 33-8124, 
approved by the Commission on August 28, 2002, which adopted the rules 
and amendments. The Commission considered comments received on the 
Initial Regulatory Flexibility Analysis in the analysis at that time.

    Title: Rule 30a-2.
    Citation: 17 CFR 270.30a-2
    Authority: 15 U.S.C. 78m, 78o(d), 80a-1 et seq., 80a-8, 80a-29, 
80a-37; 7202 and 7241; and 18 U.S.C. 1350.
    Description: Rule 30a-2 under the Investment Company Act of 1940 
generally requires that (a) each report filed on Form N-CSR (Sec. Sec.  
249.331 and 274.128) and Form N-Q (Sec. Sec.  249.332 and 274.130) by a 
registered management investment company (``fund'') must include the 
certifications in the form specified in Item 12(a)(2) of Form N-CSR or 
Item 3 of Form N-Q, as applicable, and (b) each report on Form N-CSR 
filed by a fund under Section 13(a) or 15(d) of the Exchange Act (15 
U.S.C. 78m(a) or 78o(d)) and that contains financial statements must be 
accompanied by the certifications required by Section 1350 of Chapter 
63 of Title 18 of the United States Code (18 U.S.C. 1350).
    Prior Commission Determination Under 5 U.S.C. 601: A Final 
Regulatory Flexibility Analysis was prepared in accordance with 5 
U.S.C. 604 in conjunction with the adoption of Release No. IC-25722; 
the release was approved by the Commission on August 28, 2002. Comments 
to the respective proposing release and any comments to the respective 
Initial Regulatory Flexibility Analysis were considered in connection 
with those rulemakings.

    Title: Confirmation Requirements for Transactions of Security 
Futures Products Effected in Futures Accounts.
    Citation: 17 CFR 240.10b-10; 17 CFR 249.11d2-1
    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 
77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j, 78j-l, 
78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78ll, 
78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4 and 80b-11
    Description: The rule amendments and new rule were designed to 
clarify the disclosures broker-dealers effecting transactions in 
security futures products in futures accounts must make in the 
confirmations sent to customers regarding those transactions. The 
amendments provide that broker-dealers effecting transactions in 
security futures products in futures accounts do not have to disclose 
all of the information required by the SEC's confirmation disclosure 
rule, but rather require that the transaction confirmations for these 
accounts disclose specific information and notify customers that 
certain additional information will be available upon written request. 
One rule also exempts broker-dealers effecting transactions for 
customers in security futures products in a futures account from the 
disclosure requirements of Section 11(d)(2) of the Exchange Act.
    Prior Commission Determination Under 5 U.S.C. 610: Pursuant to 
Section 605(b) of the RFA, the Chairman of the Commission certified 
that the proposed amendments to Rule 10b-10 and new Rule 11d2-1 would 
not have a significant economic impact on a substantial number of small 
entities. This certification was attached to Proposing Release No. 34-
46014 (May 31, 2001) as Appendix A. The SEC solicited comments 
concerning the impact on small entities and the RFA certification, but 
received no comments. The rule and rule amendment were adopted in 
Release No. 34-46471 (September 6, 2002).

    Title: Applicability of CFTC and SEC Customer Protection, 
Recordkeeping, Reporting, and Bankruptcy Rules and the Securities 
Investor Protection Act of 1970 to Accounts Holding Security Futures 
Products.
    Citation: 17 CFR 240.15c3-3, 17 CFR 240.17a-3, 17 CFR 240.17a-4, 17 
CFR 240.17a-5, 17 CFR 240.17a-7, 17 CFR 240.17a-11, 17 CFR 240.17a-13, 
and 17 CFR 240.17a-25
    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 
77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78fff, 78g, 78i, 78j, 
78j-1, 78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 
78ll, 78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4 and 
80b-11
    Description: The CFTC and SEC adopted rules under the CEA and the 
Securities Exchange Act as part of the joint regulatory framework under 
which futures commission merchants (``FCMs'') and brokers or dealers 
(``broker-dealers'' or ``BDs'') may effect transactions in security 
futures products for customers. The rules require all firms conducting 
business in security futures products to make disclosures to customers 
that transact business in security futures products concerning the 
protections provided by both the CEA and Exchange Act regulatory 
schemes, the regulatory scheme applicable to their accounts, and the 
alternative regulatory scheme not applicable to

[[Page 4641]]

their accounts. In addition, the rules require that every firm engaged 
in this business that is fully-registered both as an FCM and as a 
broker-dealer establish written procedures regarding how customer 
security futures products are held. The rules also specify how CEA and 
Exchange Act recordkeeping, reporting, and certain other rules apply to 
security futures product transactions and accounts in which security 
futures products are held.
    Prior Commission Determination Under 5 U.S.C. 610: Pursuant to 
Section 605(b) of the RFA, the Chairman of the Commission certified 
that the rules would not have a significant economic impact on a 
substantial number of small entities. This certification was attached 
to Proposing Release No. 44854 (Sept. 26, 2001) as Appendix A. The SEC 
solicited comments concerning the impact on small entities and the RFA 
certification, but received no comments. The rules were adopted in 
Release No. 34-46473 (September 9, 2002).

    Title: Exemption for Standardized Options From Provisions of the 
Securities Act of 1933 and From the Registration Requirements of the 
Securities Exchange Act of 1934.
    Citation: 17 CFR 230.238, 17 CFR 240.9b-1, 17 CFR 240.12a-9, and 17 
CFR 240.12h-1.
    Authority: 15 U.S.C. 77s, 15 U.S.C. 77z-3, 15 U.S.C. 78l(h), 15 
U.S.C. 78w(a), and 15 U.S.C. 78mm.
    Description: The rules exempt standardized options issued by 
registered clearing agencies and traded on a national securities 
exchange from all the provisions of the Securities Act (other than the 
antifraud provisions) and the Exchange Act registration requirements. 
The rules also clarify that a security futures product is similarly 
exempted from the Exchange Act Section 12(g) registration requirements.
    Prior Commission Determination Under 5 U.S.C. 610: Pursuant to 
Section 605(b) of the RFA, the Chairman of the Commission certified at 
the proposal stage on July 25, 2002 in 5 U.S.C. 610: Release No. 33-
8114 that the rule revisions would not have a significant economic 
impact on a substantial number of small entities. The SEC solicited 
comments concerning the impact on small entities and the RFA 
certification, but received no comments. The rules and rule amendments 
were adopted in Release No. 33-8171 (December 23, 2002).

    Dated: January 23, 2014.

    By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2014-01628 Filed 1-28-14; 8:45 am]
BILLING CODE 8011-01-P