
[Federal Register Volume 77, Number 233 (Tuesday, December 4, 2012)]
[Proposed Rules]
[Pages 71743-71746]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-29149]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Chapter II

[Release Nos. 33-9370, 34-68309, 39-2487, IA-3506, IC-30282; File No. 
S7-12-12]


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 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

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scheduled for review by the agency and to invite public comment on 
them.

DATES: Comments should be submitted by January 3, 2013.

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 S7-12-12 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 in triplicate 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-
12-12. 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. The rules and forms listed below are 
scheduled for review by staff of the Commission during the next twelve 
months. The list includes rules from 2001. 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).

List of Rules To Be Reviewed

    Title: Role of Independent Directors of Investment Companies.
    Citation: 17 CFR 270.2a19-3; 17 CFR 270.10e-1; 17 CFR 270.32a-4.

    Authority: 15 U.S.C. 80a-6(c), 80a-10(e), 80a-29(e), 80a-30, 
80a-37(a).

    Description: Rule 2a19-3 under the Investment Company Act (``Act'') 
exempts an individual from being disqualified as an independent 
director of a registered investment company (``Fund'') solely because 
he or she owns shares of an index fund that invests in the investment 
adviser or underwriter of the Fund, or their controlling persons. The 
exemption permits a director of a Fund to own shares of a registered 
investment company (including the Fund on which it serves) whose 
investment objective is to replicate the performance of one or more 
broad-based securities indices.
    Rule 10e-1 under the Act suspends temporarily the board composition 
requirements of the Act and rules thereunder, if a Fund fails to meet 
those requirements by reason of the death, disqualification, or bona 
fide resignation of a director. Rule 10e-1 suspends the board 
composition requirements for 90 days if the board can fill the director 
vacancy, or 150 days if a shareholder vote is required to fill the 
vacancy.
    Rule 32a-4 under the Act exempts Funds from the Act's requirement 
that shareholders vote on the selection of the Fund's independent 
public accountant if the Fund (i) establishes an audit committee 
composed solely of independent directors that oversees the fund's 
accounting and auditing processes; (ii) adopts an audit committee 
charter setting forth the committee's structure, duties, powers, and 
methods of operation, or sets out similar provisions in the Fund's 
charter or bylaws; and (iii) maintains a copy of such audit committee 
charter.
    Prior Commission Determination Under 5 U.S.C. 604: A Final 
Regulatory Flexibility Analysis was prepared in accordance with 5 
U.S.C. 604 in conjunction with the adoption of Release No. IC-24816, 
which was approved by the Commission on January 2, 2001. Comments on 
the proposing release and any comments on the Initial Regulatory 
Flexibility Analysis were considered at that time.
    Title: Rule 35d-1.
    Citation: 17 CFR 270.35d-1.

    Authority: 15 U.S.C. 80a-8, 80a-29, 80a-33, 80a-34, and 80a-37.

    Description: Rule 35d-1 under the Act requires that an investment 
company with a name that suggests that the company focuses its 
investments in a particular type of investment (e.g., the ABC Stock 
Fund or XYZ Bond Fund), country or geographic region (e.g., The ABC 
Japan Fund or The XYZ Latin America Fund), or a particular industry 
(e.g., the ABC Utilities Fund or the XYZ Health Care Fund) invest at 
least 80% of its assets in the type of investment suggested by the 
name. Rule 35d-1 also addresses names that indicate that a Fund's 
distributions are exempt from income tax or that its shares are 
guaranteed or approved by the United States government.
    Prior Commission Determination Under 5 U.S.C. 604: A Final 
Regulatory Flexibility Analysis was prepared in accordance with 5 
U.S.C. 604 in conjunction with the adoption of Release No. IC-24828, 
which was approved by the Commission on January

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17, 2001. Comments on the proposing release and any comments on the 
Initial Regulatory Flexibility Analysis were considered at that time.
    Title: Integration of Abandoned Offerings.
    Citation: 17 CFR 230.155, 17 CFR 230.429, 17 CFR 230.457, 17 CFR 
230.477.

    Authority: 15 U.S.C. 77b, 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, and 15 U.S.C. 77z-3.

    Description: Rule 155 provides safe harbors for a registered 
offering following an abandoned private offering, or a private offering 
following an abandoned registered offering, without integrating the 
registered and private offerings in either case. The rule amendments 
facilitate reliance on the public-to-private safe harbor by providing 
automatic effectiveness for any application to withdraw an entire 
registration statement before it becomes effective, permitting filing 
fees to be offset from withdrawn registration statements and providing 
other technical changes to the calculation of filing fees in order to 
reduce the financial risk of a registered offering that is withdrawn.
    Prior Commission Determination Under 5 U.S.C. 604: A Final 
Regulatory Flexibility Analysis was prepared in accordance with 5 
U.S.C. 604 in conjunction with Release No. 33-7943, approved by the 
Commission on January 26, 2001, which adopted the rule and rule 
amendments. Comments on the proposing release were considered at that 
time. The Commission solicited comments concerning the impact on small 
entities and the Regulatory Flexibility Act certification, but received 
no comments.
    Title: Electronic Submission of Securities Transaction Information 
by Exchange Members, Brokers, and Dealers.
    Citation: 17 CFR 240.17a-25.

    Authority: 15 U.S.C. 78a et seq.

    Description: Rule 17a-25 requires brokers and dealers to submit 
electronically to the Commission, upon request, information on customer 
and firm securities trading. Rule 17a-25 is designed to improve the 
Commission's capacity to analyze electronic submissions of transaction 
information, thereby facilitating Commission enforcement investigations 
and other trading reconstructions.
    Prior Commission Determination Under 5 U.S.C. 604: A Final 
Regulatory Flexibility Analysis was prepared in accordance with 5 
U.S.C. 604 in conjunction with the adoption of Release No. 34-44494, 
which was issued by the Commission on June 29, 2001. Comments on the 
proposing release and any comments on the Initial Regulatory 
Flexibility Analysis were considered at that time.
    Title: Rule 5b-3.
    Citation: 17 CFR 270.5b-3.

    Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, 80a-39, 
unless otherwise noted.

    Description: Rule 5b-3 under the Investment Company Act permits 
investment companies to treat a repurchase agreement as an acquisition 
of the underlying collateral, subject to certain conditions, in 
determining whether it is in compliance with the investment criteria 
for diversified funds set forth in section 5(b)(1) of the Act and the 
prohibition on fund acquisition of an interest in a broker-dealer in 
section 12(d)(3) of the Act. Rule 5b-3 also permits an investment 
company to treat the acquisition of a refunded security (which is a 
debt security whose principal and interest payments are to be paid by 
U.S. government securities that have been placed in an escrow account 
and are pledged only to the payment of the debt security) as an 
acquisition of the escrowed government securities, subject to certain 
conditions, for purposes of the diversification requirements of section 
5(b)(1) of the Act.
    Prior Commission Determination Under 5 U.S.C. 604: A Final 
Regulatory Flexibility Analysis was prepared in accordance with 5 
U.S.C. 604 in conjunction with the adoption of rule 5b-3 in Release No. 
IC-25058, which was approved by the Commission on July 5, 2001. 
Comments on the proposing release and any comments on the Initial 
Regulatory Flexibility Analyses were considered at that time.
    Title: Registration of National Securities Exchanges Pursuant to 
Section 6(g) of the Securities Exchange Act of 1934 and Proposed Rule 
Changes of Certain National Securities Exchanges and Limited Purpose 
National Securities Associations.
    Citation: 17 CFR 240.6a-2, 17 CFR 240.6a-3, 17 CFR 240.6a-4, 17 CFR 
240.19b-4, 17 CFR 240.19b-7, 17 CFR 249.10, 17 CFR 249.819; 17 CFR 
249.822.

    Authority: 15 U.S.C. 78a et seq.

    Description: The Commission adopted Rule 6a-4 under the Exchange 
Act and registration Form 1-N prescribing the requirements for 
designated contract markets and derivative transaction execution 
facilities to register as national securities exchanges pursuant to 
Section 6(g)(1) of the Exchange Act to trade security futures products. 
The Commission also adopted conforming amendments to Rules 6a-2 and 6a-
3 under the Exchange Act and Rule 202.3 of the Commission's procedural 
rules. In addition, the Commission adopted Rule 19b-7, Form 19b-7, and 
amendments to Rule 19b-4 and Form 19b-4 to accommodate proposed rule 
changes submitted by national securities exchanges registered pursuant 
to Section 6(g) of the Exchange Act and limited purpose national 
securities associations registered pursuant to Section 15A(k) of the 
Exchange Act. These rules and forms, and amendments to existing rules 
and forms, were necessary to implement the Commodity Futures 
Modernization Act of 2000.
    Prior Commission Determination Under 5 U.S.C. 605: Pursuant to 15 
U.S.C. 605(b), the Chairman of the Commission certified that the 
adopted rules, forms, and conforming amendments would not have a 
significant economic impact on a substantial number of small entities. 
This certification, including the reasons therefor, was attached to 
Proposing Release No. 34-44279 (May 8, 2001) as Appendix A. The 
Commission solicited comments concerning the impact on small entities 
and the Regulatory Flexibility Act certification, but received no 
comments.
    Title: Registration of Broker-Dealers Pursuant to Section 15(b)(11) 
of the Securities Exchange Act of 1934.
    Citation: 17 CFR 240.15a-10, 17 CFR 240.15b2-2, 17 CFR 15b11-1, 17 
CFR Part 248, 17 CFR Part 249.

    Authority: 15 U.S.C. 78a et seq.; 15 U.S.C. 6801 et seq.

    Description: The Commission adopted the following rules to 
implement provisions of the Commodity Futures Modernization Act of 2000 
(``CFMA''). First, the Commission amended its broker-dealer 
registration requirements and adopted a new form to implement Section 
203 of the CFMA to allow futures commission merchants and introducing 
brokers registered with the CFTC to register as broker-dealers by 
filing a notice with the Commission for the limited purpose of 
effecting transactions in security futures products. Second, the 
Commission adopted an exemption from registration under Section 15(a) 
of the Exchange Act to permit, subject to certain conditions, a broker-
dealer registered by notice to trade security futures products 
regardless of the market on which the product was listed or traded. 
Third, the Commission adopted amendments to Regulation S-P to revise 
certain

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provisions of Regulation S-P in light of Section 124 of the CFMA, which 
made the privacy provisions of the Gramm-Leach-Bliley Act applicable to 
activity regulated by the CFTC. These amendments also permitted futures 
commission merchants and introducing brokers registered by notice as 
broker-dealers to comply with Regulation S-P by complying with the 
CFTC's financial privacy rules.
    Prior Commission Determination Under 5 U.S.C. 605: Pursuant to 15 
U.S.C. 605(b), the Chairman of the Commission certified that the 
proposed rules, forms, and conforming amendments 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. 34-44455 (June 20, 2001) as Appendix A. The 
Commission solicited comments concerning the impact on small entities 
and the Regulatory Flexibility Act certification, but received no 
comments.
    Title: Method for Determining Market Capitalization and Dollar 
Value of Average Daily Trading Volume; Application of the Definition of 
Narrow-Based Security Index.
    Citation: 17 CFR 240.3a55-1, 17 CFR 240.3a55-2, 17 CFR 240.3a55-3.

    Authority: 15 U.S.C. 78a et seq.

    Description: The CFTC and the SEC (collectively, ``Commissions'') 
adopted joint final rules to implement new statutory provisions enacted 
by the Commodity Futures Modernization Act of 2000. Specifically, the 
CFMA directed the Commissions to jointly specify by rule or regulation 
the method to be used to determine ``market capitalization'' and 
``dollar value of average daily trading volume'' for purposes of the 
new definition of ``narrow-based security index,'' including exclusions 
from that definition, in the Commodity Exchange Act and the Exchange 
Act. The CFMA also directed the Commissions to jointly adopt rules or 
regulations that set forth the requirements for an index underlying a 
contract of sale for future delivery traded on or subject to the rules 
of a foreign board of trade to be excluded from the definition of 
``narrow-based security index.''
    Prior Commission Determination Under 5 U.S.C. 605: Pursuant to 15 
U.S.C. 605(b), 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. 34-44288 (May 9, 2001) as an Appendix. The Commission solicited 
comments concerning the impact on small entities and the Regulatory 
Flexibility Act certification, but received no comments.
    Title: Options Disclosure Document.
    Citation: 17 CFR 230.135b.

    Authority: 15 U.S.C. 77b, 15 U.S.C. 77g, 15 U.S.C. 77j, 15 
U.S.C. 77s, and 15 U.S.C. 77z-3.

    Description: This rule clarifies that an options disclosure 
document prepared in accordance with Commission rules under the 
Securities Exchange Act of 1934 is not a prospectus and is not subject 
to civil liability under Section 12(a)(2) of the Securities Act. This 
amendment reduces legal uncertainty regarding whether such liability 
applies to these documents by codifying a long-standing interpretive 
position taken by the Division of Corporation Finance.
    Prior Commission Determination Under 5 U.S.C. 605: Pursuant to the 
Regulatory Flexibility Act (5 U.S.C. 605(b)), the Chairman of the 
Commission certified at the proposal stage on July 1, 1998 in Release 
No. 33-7550 that the rule revisions would not have a significant 
economic impact on a substantial number of small entities. The 
Commission solicited comments concerning the impact on small entities 
and the Regulatory Flexibility Act certification, but received no 
comments.

    Dated: November 28, 2012.

    By the Commission.

Elizabeth M. Murphy,
Secretary.
[FR Doc. 2012-29149 Filed 12-3-12; 8:45 am]
BILLING CODE 8011-01-P


