
[Federal Register Volume 76, Number 180 (Friday, September 16, 2011)]
[Rules and Regulations]
[Pages 57636-57637]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-23732]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 200

[Release No. PA-47 ; File No. S7-19-11]


Privacy Act of 1974: Implementation and Amendment of Exemptions

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: The Securities and Exchange Commission (``SEC'' or 
``Commission'') is adopting a rule to amend its Privacy Act regulations 
to exempt portions of three new systems of records and to make 
technical amendments to its current inventory of exempted systems of 
records. Specifically, application of the exemptions to the three new 
systems of records is necessary to protect information compiled for law 
enforcement purposes.

DATES: Effective Date: October 17, 2011.

FOR FURTHER INFORMATION CONTACT: Cristal Perpignan, Acting Chief 
Privacy Officer, Office of Information Technology, 202-551-7716.

SUPPLEMENTARY INFORMATION: 
    Background: On May 24, 2011, SEC published notice of three new 
Privacy Act systems of records entitled Tips, Complaints, and Referrals 
(TCR) Records (SEC-63)'', ``SEC Security in the Workplace Incident 
Records (SEC-64)'', and ``Investor Response Information System (IRIS) 
(SEC-65)''; and to revise two existing systems of records at Release 
No. PA-46, (May 18, 2011), 76 FR 30213 (May 24, 2011). In conjunction 
with publication of the systems of records notice, the SEC published, 
with invitation to comment, a proposed rule to exempt the new systems 
of records from 5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4)(G), (H), and 
(I), and (f) of the Privacy Act and 17 CFR 200.303, 200.304, and 
200.306; and to make technical amendments to its current inventory of 
exempted systems of records at Release No. PA-45 (May 18, 2011), 76 FR 
30048 (May 24, 2011). The TCR Records (SEC-63) system of records 
contains records related to tips, complaints, referrals of misconduct, 
or related information about actual or potential violations of the 
federal securities laws; investor harm; conduct of public companies; 
securities professionals; regulated entities; and associated persons. 
This system of records may include investigatory materials that were 
compiled in connection with the Commission's enforcement 
responsibilities under the federal securities laws. Such material may 
consist of unsolicited and often unverified statements concerning 
individuals, information received from confidential sources, as well as 
reports from the Commission's investigators and other law enforcement 
personnel. The disclosure of the existence of investigatory materials 
could seriously undermine effective enforcement of the federal 
securities laws by prematurely alerting individuals to the fact that 
they are under investigation, by giving them access to the evidentiary 
bases for a Commission enforcement action or seriously hampering the 
Commission's case in court or before an administrative law judge.
    The SEC Security in the Workplace Incident Records (SEC-64) system 
of records contains records related to reports involving incidents of 
assault, harassment, intimidation, bullying, weapons possession, or 
threats at the SEC. This system of records may include investigatory 
materials that were compiled in connection with inquiries or 
investigation of potential or actual incidents of violence by and 
against individuals at an SEC facility. The disclosure of information 
as it relates to investigatory materials or the identity of sources of 
information may seriously undermine the safety and security of 
employees in the workplace. Access to such information could allow the 
subject of an investigation or inquiry of an actual or potential 
criminal or civil violation to interfere with and impede the 
investigation, tamper with witnesses or evidence, and to avoid 
detection or apprehension.
    The IRIS (SEC-65) system of records contains records related to 
complaints/inquiries/requests from members of the public and others. 
This system of records may include investigatory materials that were 
compiled in connection with the Commission's enforcement 
responsibilities under the federal securities laws. Such material may 
consist of unsolicited and often unverified statements concerning 
individuals, information received from confidential sources, as well as 
reports from the Commission's investigators and other law enforcement 
personnel. The disclosure of the existence of investigatory materials 
could seriously undermine effective enforcement of the federal 
securities laws by prematurely alerting individuals to the fact that 
they are under investigation, by giving them access to the evidentiary 
bases for a commission enforcement action or seriously hampering the 
Commission's case in court or before an administrative law judge.
    The Commission is exempting SEC-63, SEC-64 and SEC-65 from 5 U.S.C. 
552a(c)(3), (d), (e)(1), (e)(4)(G), (H), and (I), and (f) and 17 CFR 
200.303, 200.304, and 200.306, insofar as they contain investigatory 
materials compiled for law enforcement purposes; and amending its 
existing inventory of exemptions by modifying the name of SEC 38 from 
``Office of Personnel Code of Conduct and Employee Performance Files'' 
to ``Disciplinary and Adverse Actions, Employee Conduct, and Labor 
Relations Files'' and by deleting reference to ``Personnel Security 
Files'', which was published for deletion at Release No. PA-29 (July 
28, 2000), 65 FR 49037(August10, 2000).
    Public Comments: The Commission received only one comment on the 
proposal, but it did not address the specific exemptions; instead, the 
commenter stated generally that he thought privacy should be preserved 
and not taken away. We continue to believe the exemptions are 
consistent with the Privacy Act because the exemptions protect 
information relating to enforcement investigations from disclosure.

Paperwork Reduction Act

    This rule does not contain a ``collection of information'' 
requirement within the meaning of the Paperwork Reduction Act of 1995, 
so the Paperwork Reduction Act is not applicable.

Cost-Benefit Analysis

    The Commission is sensitive to the costs and benefits imposed by 
its rules. The Privacy Act of 1974 directs each agency that proposes to 
establish or make a significant change in a system of records to 
publish in the Federal Register a notice of the existence and character 
of the system. Government agencies may exempt certain records from 
certain provisions of the Privacy Act, but to claim an exemption the

[[Page 57637]]

agency must issue a rule justifying the exemption.
    The new systems of records may include investigatory materials 
compiled in connection with the Commission's enforcement of the federal 
securities laws, in connection with potential or actual incidents of 
workplace violence, or in connections with complaints, inquiries or 
requests from the public. The Commission and investors will benefit 
from the amendments, because in their absence the potential access to 
or disclosure of the investigatory materials in these systems of 
records could seriously undermine the effective enforcement of the 
Federal securities laws, and could jeopardize the safety and security 
of Commission employees in the workplace.
    We recognize that the proposed amendments may impose costs on 
individuals who may wish to obtain access to records that contain 
investigatory materials in these systems of records. We have no way of 
estimating the potential number of individuals who might in the future 
desire such access. Nevertheless, the benefits of exempting those 
records from public access are compelling, and they clearly justify the 
costs of the exemption. In addition, Congress was aware of such 
potential costs when they promulgated the specific exemption in 5 
U.S.C. 552a(k)(2). The Commission discussed these costs and benefits in 
the proposing release and received no comments on them.

Regulatory Flexibility Act Certification

    Pursuant to the requirements of the Regulatory Flexibility Act, 5 
U.S.C. 601-612, SEC certified that these regulations would not 
significantly affect a substantial number of small entities. The rule 
imposes no duties or obligations on small entities. Further, in 
accordance with the provisions of the Paperwork Reduction Act of 1995, 
44 U.S.C. 3501, SEC has determined that this rule would not impose new 
recordkeeping, application, reporting, or other types of information 
collection requirements. The Commission provided this certification in 
the proposing release and received no comments.

List of Subjects in 17 CFR Part 200

    Administrative practice and procedure; Privacy.

Text of Amendments

    For the reasons set out in the preamble, Title 17, Chapter II, of 
the Code of Federal Regulations is amended as follows:

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

0
1. The authority citation for Part 200 is amended by adding authority 
for Sec.  200.312 in numerical order to read 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.
* * * * *
    Section 200.312 is also issued under 5 U.S.C. 552a(k).
* * * * *

Subpart H--Regulations Pertaining to the Privacy of Individuals and 
Systems of Records Maintained by the Commission

0
2. Amend Sec.  200.312 by:
0
a. Removing ``and'' at the end of paragraph (a)(5);
0
b. Removing the period at the end of paragraph (a)(6) and adding a 
semicolon in its place;
0
c. Adding paragraphs (a)(7), (a)(8) and (a)(9);
0
d. Revising paragraph (b); and
0
e. Removing the authority citation at the end of the section.
    The additions and revision read as follows.


Sec.  200.312  Specific exemptions.

* * * * *
    (a) * * *
    (7) Tips, Complaints, and Referrals (TCR) Records;
    (8) SEC Security in the Workplace Incident Records; and
    (9) Investor Response Information System (IRIS).
    (b) Pursuant to 5 U.S.C. 552a(k)(5), the system of records 
containing the Commission's Disciplinary and Adverse Actions, Employee 
Conduct, and Labor Relations Files shall be exempt from sections 
(c)(3), (d), (e)(1), (e)(4)(G), (H), and (I), and (f) of the Privacy 
Act, 5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4)(G), (e)(4)(H), and 
(e)(4)(I), and (f), and 17 CFR 200.303, 200.304, and 200.306 insofar as 
they contain investigatory material compiled to determine an 
individual's suitability, eligibility, and qualifications for Federal 
civilian employment or access to classified information, but only to 
the extent that the disclosure of such material would reveal the 
identity of a source who furnished information to the Government under 
an express promise that the identity of the source would be held in 
confidence, or, prior to September 27, 1975, under an implied promise 
that the identity of the source would be held in confidence.

    By the Commission.

    Dated: September 12, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-23732 Filed 9-15-11; 8:45 am]
BILLING CODE 8011-01-P


