[Federal Register Volume 87, Number 121 (Friday, June 24, 2022)]
[Proposed Rules]
[Pages 37772-37773]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-13410]


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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. 87, No. 121 / Friday, June 24, 2022 / 
Proposed Rules  

[[Page 37772]]



SECURITIES AND EXCHANGE COMMISSION

17 CFR Chapter II

[Release Nos. 33-11073; 34-95122; IC-34619; File No. S7-19-22]


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 scheduled for review by the agency and to 
invite public comment on whether the 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change, or should be amended or rescinded to minimize any significant 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 small 
entities.

DATES: Comments should be submitted by August 23, 2022.

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

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/submitcomments.htm); or
     Send an email to [email protected]. Please include 
File Number S7-19-22 on the subject line.

Paper Comments

     Send paper comments to Vanessa A. Countryman, Secretary, 
Securities and Exchange Commission, 100 F Street NE, Washington, DC 
20549-1090.

All submissions should refer to File Number S7-19-22. This file number 
should be included on the subject line if email is used. To help the 
Commission process and review your comments more efficiently, please 
use only one method of submission. The Commission will post all 
comments on the Commission's website (https://www.sec.gov/rules/other.shtml). Comments are also available for website 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 
a.m. and 3 p.m. Operating conditions may limit access to the 
Commission's Public Reference Room.
    All comments received will be posted without change. Persons 
submitting comments are cautioned that we do not redact or edit 
personal identifying information from comment submissions. You should 
submit only information that you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT: Leila Bham, Senior Special Counsel, 
Office of the General Counsel, 202-551-5532.

SUPPLEMENTARY INFORMATION: The Regulatory Flexibility Act (``RFA''), 
codified at 5 U.S.C. 601-612, 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(b).
    The list below includes rules adopted in 2012 that may have a 
significant economic impact on a substantial number of small entities 
(but excludes rules that have been substantially changed since 
adoption, rules that are minor amendments to previously adopted rules, 
and rules that are ministerial, procedural, or technical in nature). 
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.

    Title: Purchase of Certain Debt Securities by Business and 
Industrial Development Companies Relying on an Investment Company Act 
Exemption.
    Citation: 17 CFR 270.6a-5.
    Authority: 15 U.S.C. 80a-6(a)(5)(A)(iv)(I) and 15 U.S.C. 80a-37(a).
    Description: The Commission adopted a new rule to establish a 
standard of credit-worthiness in place of a statutory reference to 
credit ratings that the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (``Dodd-Frank Act'') removed. The rule established the 
standard of credit quality that must be met by certain debt securities 
purchased by business and industrial development companies that rely on 
an exemption from the Investment Company Act of 1940.
    Prior RFA Analysis: When the Commission adopted this rule on 
November 19, 2012, it published a Final Regulatory Flexibility Analysis 
in the adopting release, Release No. IC-30268, available at: https://www.federalregister.gov/documents/2012/11/23/2012-28456/purchase-of-certain-debt-securities-by-business-and-industrial-development-companies-relying-on-an. The Commission received no comments on its 
Initial Regulatory Flexibility Analysis published in the proposing 
release, Release No. IC-29592 (March 3, 2011), available at: https://www.federalregister.gov/documents/2011/03/09/2011-5184/references-to-credit-ratings-in-certain-investment-company-act-rules-and-forms.
* * * * *
    Title: Conflict Minerals.
    Citation: 17 CFR 240.13p-1 and 17 CFR 249b.400.
    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 
77ggg, 77jjj, 77kkk, 77nnn, 77sss, 77ttt, 78a et seq. 78c, 78d, 78e, 
78f, 78g, 78i, 78j, 78j-1, 78k, 78k-1, 78 l, 78m, 78n, 78n-

[[Page 37773]]

1, 78o, 78o-4, 78o-8, 78p, 78q, 78s, 78u-5, 78w, 78x, 78dd(b), 78dd(c), 
78 ll, 78mm, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, 7201 
et seq., and 8302; 18 U.S.C. 1350; 12 U.S.C. 5221(e)(3), and Pub. L. 
111-203, Sec. 1502, 124 Stat. 1376.
    Description: The Commission adopted a new form and rule pursuant to 
Section 1502 of the Dodd-Frank Act relating to the use of conflict 
minerals. Section 1502 added Section 13(p) to the Securities Exchange 
Act of 1934 (``Exchange Act''), which required the Commission to 
promulgate rules requiring issuers with conflict minerals that are 
necessary to the functionality or production of a product manufactured 
by such person to disclose annually whether any of those minerals 
originated in the Democratic Republic of the Congo or an adjoining 
country. If an issuer's conflict minerals originated in those 
countries, Section 13(p) required the issuer to submit a report to the 
Commission that includes a description of the measures it took to 
exercise due diligence on the conflict minerals' source and chain of 
custody. The measures taken to exercise due diligence must include an 
independent private sector audit of the report that is conducted in 
accordance with standards established by the Comptroller General of the 
United States. Section 13(p) also required the issuer submitting the 
report to identify the auditor and to certify the audit. In addition, 
Section 13(p) required the report to include a description of the 
products manufactured or contracted to be manufactured that are not 
``DRC conflict free,'' the facilities used to process the conflict 
minerals, the country of origin of the conflict minerals, and the 
efforts to determine the mine or location of origin. Section 13(p) 
required the information disclosed by the issuer to be available to the 
public on its internet website.\1\
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    \1\ In April 2014, the U.S. Court of Appeals for the District of 
Columbia Circuit rejected challenges to the bulk of the SEC conflict 
minerals rule but held that Section 1502 of the Dodd-Frank Act and 
the rule violate the First Amendment to the extent that they require 
regulated entities to report to the SEC and to state on their 
website that any of their products ``have not been found to be DRC 
conflict free.'' Nat'l Ass'n of Mfrs. v. SEC, 748 F.3d 359 (D.C. 
Cir. Apr. 14, 2014). In April 2017, the U.S. District Court for the 
District of Columbia remanded the case to the Commission. Nat'l 
Ass'n of Mfrs. v. SEC, No. 13-635 (D.D.C. Apr. 3, 2017) (Doc. No. 
47) (Final Judgment).
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    Prior RFA Analysis: When the Commission adopted the new form and 
rule on August 22, 2012, it published a Final Regulatory Flexibility 
Analysis in the adopting release, Release No. 34-67716, available at: 
https://www.federalregister.gov/documents/2012/09/12/2012-21153/conflict-minerals. The Commission solicited comment on the Initial 
Regulatory Flexibility Analysis included in the proposing release, 
Release No. 34-63547 (Dec. 15, 2010), available at https://www.federalregister.gov/documents/2010/12/23/2010-31940/conflict-minerals, and considered comments received at that time.
* * * * *
    Title: Listing Standards for Compensation Committees.
    Citation: 17 CFR 229.407 and 17 CFR 240.10C-1.
    Authority: 15 U.S.C. 77c, 77d, 77e, 77f, 77g, 77h, 77j, 77k, 77s, 
77z-2, 77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 
77jjj, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 
78j-3, 78k, 78k-1,78l, 78m, 78n, 78n-1, 78o, 78o-4, 78p, 78q, 78s, 78u-
5, 78w, 78x, 78ll, 78mm, 80a-8, 80a-9, 80a-20, 80a-23, 80a-29, 80a-30, 
80a-31(c), 80a-37, 80a-38(a), 80a-39, 80b-3, 80b-4, 80b-11, and 7201 et 
seq.; and 18 U.S.C. 1350, and 12 U.S.C. 5221(e)(3), unless otherwise 
noted.
    Description: The Commission adopted a new rule and amendments to 
its proxy disclosure rules to implement Section 952 of the Dodd-Frank 
Act, which added Section 10C to the Exchange Act. Section 10C required 
the Commission to adopt rules directing the national securities 
exchanges and national securities associations to prohibit the listing 
of any equity security of an issuer that is not in compliance with 
Section 10C's compensation committee and compensation adviser 
requirements. In accordance with the statute, 17 CFR 240.10C-1 (Rule 
10C-1) directs the national securities exchanges to establish listing 
standards that, among other things, require each member of a listed 
issuer's compensation committee to be a member of the board of 
directors and to be ``independent,'' as defined in the listing 
standards of the national securities exchanges adopted in accordance 
with the final rule. In addition, pursuant to Section 10C(c)(2), the 
Commission adopted amendments to its proxy disclosure rules concerning 
issuers' use of compensation consultants and related conflicts of 
interest.
    Prior RFA Analysis: When the Commission adopted the new rule and 
amendments on June 20. 2012, it published a Final Regulatory 
Flexibility Analysis in the adopting release, Release No. 33-9330, 
available at: https://www.federalregister.gov/documents/2012/06/27/2012-15408/listing-standards-for-compensation-committees. The 
Commission received no comments on its Initial Regulatory Flexibility 
Analysis published in the proposing release, Release No. 33-9199 (Mar. 
30, 2011), available at https://www.federalregister.gov/documents/2011/04/06/2011-7948/listing-standards-for-compensation-committees. However, 
other comments received that addressed aspects of the proposed rule 
that could potentially affect small entities were considered at that 
time.
* * * * *

    By the Commission.

    Dated: June 17, 2022.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2022-13410 Filed 6-23-22; 8:45 am]
BILLING CODE 8011-01-P


