81 FR 59927 - Request for Comment on Subpart 400 of Regulation S-K Disclosure Requirements Relating to Management, Certain Security Holders and Corporate Governance Matters
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 169 (August 31, 2016)
Federal Register Volume 81, Issue 169 (August 31, 2016)
| Page Range | 59927-59929 | |
| FR Document | 2016-20906 |
[Federal Register Volume 81, Number 169 (Wednesday, August 31, 2016)] [Proposed Rules] [Pages 59927-59929] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-20906] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 229 [Release No. 33-10198; 34-78687; File No. S7-18-16] Request for Comment on Subpart 400 of Regulation S-K Disclosure Requirements Relating to Management, Certain Security Holders and Corporate Governance Matters AGENCY: Securities and Exchange Commission. ACTION: Request for comment. ----------------------------------------------------------------------- SUMMARY: The Commission is requesting public comment on certain disclosure requirements in Regulation S-K relating to management, certain security holders, and corporate governance matters contained in Subpart 400. This request is part of an initiative by the Division of Corporation Finance to review the disclosure requirements in Regulation S-K to consider ways to improve them for the benefit of investors and registrants. Comments received in response to this request for comment will also inform the Commission's study on Regulation S-K, which is required by Section 72003 of the Fixing America's Surface Transportation Act (``FAST Act''). DATES: Comments should be received on or before October 31, 2016. ADDRESSES: Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/other.shtml); or Send an email to [email protected]. Please include File Number S7-18-16 in 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 Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number S7-18-16. This file number should be included in the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's 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: Eduardo A. Aleman, Special Counsel, Office of Rulemaking, Division of Corporation Finance, at (202) 551- 3430, 100 F Street NE., Washington, DC 20549. SUPPLEMENTARY INFORMATION: Background and Discussion Over the years, the Commission has evaluated its disclosure regime and engaged periodically in rulemakings designed to enhance its disclosure and registration requirements.\1\ Most recently, the Commission published a concept release to seek public comment on modernizing certain business and financial disclosure requirements in Regulation S-K.\2\ The purpose of the Regulation S-K Concept Release is to assess whether the business and financial disclosure requirements in Regulation S-K continue to provide the information that investors need to make informed investment and voting decisions. The Regulation S-K Concept Release focuses on the business and financial disclosures that registrants provide in their periodic reports, which are a subset of the disclosure requirements in Regulation S-K, because many of them have changed little since they were first adopted and are often the foundation of the disclosures investors look to when making investment decisions. These requirements have also been revisited by the Commission or the staff less [[Page 59928]] frequently in the recent past than other disclosure requirements in Regulation S-K, such as executive compensation and governance contained in Subpart 400 of Regulation S-K.\3\ Last year, the Commission also published a request for comment to seek public input about the financial disclosure requirements in Regulation S-X for certain entities other than a registrant.\4\ --------------------------------------------------------------------------- \1\ For a summary of the relevant history and background of Regulation S-K, see Business and Financial Disclosure Required by Regulation S-K, Release No. 33-10064 (Apr. 13, 2016) [81 FR 23916 (Apr. 22, 2016)] (``Regulation S-K Concept Release''). \2\ See id. \3\ See, e.g., Executive Compensation and Related Person Disclosure, Release No. 33-8732A (Aug. 29, 2006) [71 FR 53157 (Sept. 8, 2006)]; Proxy Disclosure Enhancements, Release No. 33-9089 (Dec. 16, 2009) [74 FR 68333 (Dec. 23, 2009)]; Staff Observations in the Review of Executive Compensation Disclosure, Division of Corporation Finance (Oct. 9, 2007), available at https://www.sec.gov/divisions/corpfin/guidance/execcompdisclosure.htm. As the Commission noted in the Regulation S-K Concept Release, the scope of that release does not include certain disclosure requirements for information other than business and financial disclosures, such as Subpart 400, which requires disclosure about management and certain security holders as well as corporate governance matters. See Regulation S-K Concept Release, supra note 1, at Section I, n. 4. This request for comment directly covers those subjects. \4\ See Request for Comment on the Effectiveness of Financial Disclosures about Entities Other Than the Registrant, Release No. 33-9929 (Sept. 25, 2015) [80 FR 59083 (Oct. 1, 2015)]. --------------------------------------------------------------------------- These efforts, in addition to this request for comment, are part of a comprehensive evaluation of the Commission's disclosure requirements recommended in the staff's Report on Review of Disclosure Requirements in Regulation S-K (``S-K Study''), which was mandated by Section 108 of the Jumpstart Our Business Startups Act (``JOBS Act'').\5\ As noted in the Regulation S-K Concept Release, based on the S-K Study's recommendation and at the request of the Chair, Commission staff initiated a comprehensive evaluation of the type of information our rules require registrants to disclose, how this information is presented, where and how this information is disclosed, and how the Commission can leverage technology as part of these efforts (collectively, ``Disclosure Effectiveness Initiative''). Section 72003(a) of the FAST Act \6\ also requires the Commission to carry out a study of the requirements contained in Regulation S-K.\7\ Specifically, Section 72003(a) requires that the study of Regulation S- K: --------------------------------------------------------------------------- \5\ Public Law 112-106, Sec. 108, 126 Stat. 306 (2012). Section 108 of the JOBS Act requires the Commission to conduct a review of Regulation S-K to determine how such requirements can be updated to modernize and simplify the registration process for emerging growth companies. The S-K Study is available at http://www.sec.gov/news/studies/2013/reg-sk-disclosure-requirements-review.pdf. For a further discussion of the S-K Study, see the Regulation S-K Concept Release, supra note 1, at Section II.C. \6\ Public Law 114-94, Sec. 72003, 129 Stat. 1312 (2015). \7\ In conducting this study, the Commission is required to consult with the Investor Advisory Committee and the Advisory Committee on Small and Emerging Companies. --------------------------------------------------------------------------- Determine how best to modernize and simplify such requirements in a manner that reduces the costs and burdens on issuers while still providing all material information; Emphasize a company-by-company approach that allows relevant and material information to be disseminated to investors without boilerplate language or static requirements while preserving completeness and comparability of information across registrants; and Evaluate methods of information delivery and presentation and explore methods for discouraging repetition and the disclosure of immaterial information.\8\ --------------------------------------------------------------------------- \8\ Public Law 114-94, Sec. 72003, 129 Stat. 1312 (2015). --------------------------------------------------------------------------- Request for Comment The initiative to review the disclosure requirements in Regulation S-K is intended to result in recommendations and proposals that will improve our disclosure system for the benefit of investors and registrants. The purpose of this request for comment is to solicit public input on Subpart 400 of Regulation S-K, which requires certain disclosures about a registrant's management, certain security holders, and corporate governance matters.\9\ The input can include comments on existing requirements in these rules as well as on potential disclosure issues that commenters believe the rules should address.\10\ The comments received in response to this request for comment, as well as comments received in response to the Regulation S-K Concept Release, will inform the Commission in carrying out the study of Regulation S-K required by Section 72003(a) of the FAST Act.\11\ --------------------------------------------------------------------------- \9\ 17 CFR 229.401 et seq. \10\ For example, as noted in the Regulation S-K Concept Release, supra note 1, this could include industry-specific disclosure requirements, information about sustainability and governance matters, and additional instances in which scaled disclosure could be implemented. \11\ Comment letters received in response to this request for comment will be considered in connection with any future rulemaking related to the disclosure requirements in Subpart 400 of Regulation S-K. If the Commission proposes changes to these disclosure requirements the proposed changes will be subject to public notice and comment. --------------------------------------------------------------------------- Item 401 of Regulation S-K generally requires certain disclosures about a registrant's directors, executive officers, promoters and control persons.\12\ --------------------------------------------------------------------------- \12\ 17 CFR 229.401. --------------------------------------------------------------------------- Item 402 of Regulation S-K generally requires disclosure of all plan and non-plan compensation awarded to, earned by, or paid to a registrant's named executive officers and directors.\13\ --------------------------------------------------------------------------- \13\ 17 CFR 229.402. Item 402 also describes the disclosure requirements for certain categories of registrants such as foreign private issuers and smaller reporting companies. The Commission has a number of outstanding proposals related to executive compensation disclosure and listing requirements. See Disclosure of Hedging by Employees, Officers and Directors, Release No. 33-9723 (Feb. 9, 2015) [80 FR 8485 (Feb. 17, 2015)]; Pay Versus Performance, Release 34-74835 (Apr. 29, 2015) [80 FR 26329 (May 7, 2015)]; Listing Standards for Recovery of Erroneously Awarded Compensation, Release No. 33-9861 (July 1, 2015) [80 FR 41143 (July 14, 2015)]. This release requests comment on the disclosure requirements in Item 402 generally and is not intended to solicit specific comment on those proposals. --------------------------------------------------------------------------- Item 403 of Regulation S-K generally requires a description of the security ownership of certain beneficial owners and management.\14\ --------------------------------------------------------------------------- \14\ 17 CFR 229.403. --------------------------------------------------------------------------- Item 404 of Regulation S-K generally requires a description of certain transactions with related persons, promoters and certain control persons.\15\ --------------------------------------------------------------------------- \15\ 17 CFR 229.404. --------------------------------------------------------------------------- Item 405 of Regulation S-K generally requires a registrant to identify certain persons who failed to file on a timely basis, as disclosed in certain forms, reports required by Section 16(a) of the Securities Exchange Act \16\ during the most recent fiscal year or prior fiscal years.\17\ --------------------------------------------------------------------------- \16\ 15 U.S.C. 78p. \17\ 17 CFR 229.405. --------------------------------------------------------------------------- Item 406 of Regulation S-K generally requires disclosures about whether the registrant has adopted a code of ethics that applies to certain of the registrant's executive officers, or persons performing similar functions, and, if it has not adopted such a code of ethics, an explanation why it has not done so.\18\ --------------------------------------------------------------------------- \18\ 17 CFR 229.406. --------------------------------------------------------------------------- Item 407 of Regulation S-K generally requires certain corporate governance disclosure about director independence, board meetings, various board committees (e.g., nominating, audit and compensation committees) and any process for shareholder communications.\19\ --------------------------------------------------------------------------- \19\ 17 CFR 229.407. --------------------------------------------------------------------------- In connection with the staff's continuing Disclosure Effectiveness Initiative and corresponding work on the FAST Act mandate, the Commission welcomes public comments on the issues that the staff should consider in conducting its review of Subpart 400 of Regulation S-K, including, among other things, how best to modernize and [[Page 59929]] simplify these disclosure items in view of the objectives of the Regulation S-K study set forth in Section 72003 of the FAST Act and whether additional disclosures in these areas are necessary or appropriate to facilitate investor protection, to maintain fair, orderly, and efficient markets, and/or to facilitate capital formation. In addition to the substance of the disclosure requirements, the Commission welcomes comments on how information can be presented to improve its readability, navigability and comparability and how technology and structured data can facilitate data aggregation and analysis. All interested parties are invited to submit their views and any data, in writing, on any matter relating to Subpart 400 of --------------------------------------------------------------------------- Regulation S-K. By the Commission. Dated: August 25, 2016. Brent J. Fields, Secretary. [FR Doc. 2016-20906 Filed 8-30-16; 8:45 am] BILLING CODE 8011-01-P
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Bulletin A340–57–5036, dated September 18, Transport Airplane Directorate, 1601 Lind Exchange Commission, 100 F Street NE.,
2015; as applicable. Avenue SW., Renton, WA. For information Washington, DC 20549–1090.
on the availability of this material at the
(k) Other FAA AD Provisions All submissions should refer to File
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The following provisions also apply to this Number S7–18–16. This file number
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(1) Alternative Methods of Compliance 18, 2016. if email is used. To help the
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Directorate, FAA, has the authority to Directorate, Aircraft Certification Service. only one method. The Commission will
approve AMOCs for this AD, if requested [FR Doc. 2016–20696 Filed 8–30–16; 8:45 am] post all comments on the Commission’s
using the procedures found in 14 CFR 39.19. BILLING CODE 4910–13–P Web site (http://www.sec.gov/rules/
In accordance with 14 CFR 39.19, send your
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S7–18–16] received will be posted without change;
telephone: 425–227–1138; fax: 425–227–
we do not edit personal identifying
1149. Information may be emailed to: 9-
ANM-116-AMOC-REQUESTS@faa.gov. Request for Comment on Subpart 400 information from submissions. You
Before using any approved AMOC, notify of Regulation S–K Disclosure should submit only information that
your appropriate principal inspector, or Requirements Relating to you wish to make available publicly.
lacking a principal inspector, the manager of Management, Certain Security Holders FOR FURTHER INFORMATION CONTACT:
the local flight standards district office/ and Corporate Governance Matters Eduardo A. Aleman, Special Counsel,
certificate holding district office. The AMOC Office of Rulemaking, Division of
approval letter must specifically reference AGENCY: Securities and Exchange Corporation Finance, at (202) 551–3430,
this AD. Commission. 100 F Street NE., Washington, DC
(2) Contacting the Manufacturer: For any ACTION: Request for comment.
requirement in this AD to obtain corrective 20549.
actions from a manufacturer, the action must SUMMARY: The Commission is requesting SUPPLEMENTARY INFORMATION:
be accomplished using a method approved public comment on certain disclosure
by the Manager, International Branch, ANM– Background and Discussion
116, Transport Airplane Directorate, FAA; or
requirements in Regulation S–K relating
to management, certain security holders, Over the years, the Commission has
the European Aviation Safety Agency evaluated its disclosure regime and
(EASA); or Airbus’s EASA Design and corporate governance matters
contained in Subpart 400. This request engaged periodically in rulemakings
Organization Approval (DOA). If approved by
is part of an initiative by the Division of designed to enhance its disclosure and
the DOA, the approval must include the
DOA-authorized signature. Corporation Finance to review the registration requirements.1 Most
(3) Required for Compliance (RC): If any disclosure requirements in Regulation recently, the Commission published a
service information contains procedures or S–K to consider ways to improve them concept release to seek public comment
tests that are identified as RC, those for the benefit of investors and on modernizing certain business and
procedures and tests must be done to comply
registrants. Comments received in financial disclosure requirements in
with this AD; any procedures or tests that are Regulation S–K.2 The purpose of the
not identified as RC are recommended. Those response to this request for comment
will also inform the Commission’s study Regulation S–K Concept Release is to
procedures and tests that are not identified assess whether the business and
as RC may be deviated from using accepted on Regulation S–K, which is required by
Section 72003 of the Fixing America’s financial disclosure requirements in
methods in accordance with the operator’s
maintenance or inspection program without Surface Transportation Act (‘‘FAST Regulation S–K continue to provide the
obtaining approval of an AMOC, provided Act’’). information that investors need to make
the procedures and tests identified as RC can informed investment and voting
be done and the airplane can be put back in DATES: Comments should be received on decisions. The Regulation S–K Concept
an airworthy condition. Any substitutions or or before October 31, 2016. Release focuses on the business and
changes to procedures or tests identified as ADDRESSES: Comments may be financial disclosures that registrants
RC require approval of an AMOC. submitted by any of the following provide in their periodic reports, which
(l) Related Information methods: are a subset of the disclosure
(1) Refer to Mandatory Continuing requirements in Regulation S–K,
Electronic Comments because many of them have changed
Airworthiness Information (MCAI) EASA
Airworthiness Directive 2016–0082, dated • Use the Commission’s Internet little since they were first adopted and
April 27, 2016, for related information. This comment form (http://www.sec.gov/ are often the foundation of the
MCAI may be found in the AD docket on the rules/other.shtml); or disclosures investors look to when
Internet at http://www.regulations.gov by • Send an email to rule-comments@ making investment decisions. These
searching for and locating Docket No. FAA– sec.gov. Please include File Number S7– requirements have also been revisited
2016–8851.
ehiers on DSK5VPTVN1PROD with PROPOSALS
18–16 in the subject line; or by the Commission or the staff less
(2) For service information identified in • Use the Federal eRulemaking Portal
this AD, contact Airbus SAS, Airworthiness
Office—EAL, 1 Rond Point Maurice Bellonte,
(http://www.regulations.gov). Follow the 1 For a summary of the relevant history and
instructions for submitting comments. background of Regulation S–K, see Business and
31707 Blagnac Cedex, France; telephone: +33 Financial Disclosure Required by Regulation S–K,
5 61 93 36 96; fax: +33 5 61 93 45 80; email: Paper Comments Release No. 33–10064 (Apr. 13, 2016) [81 FR 23916
airworthiness.A330-A340@airbus.com; (Apr. 22, 2016)] (‘‘Regulation S–K Concept
Internet: http://www.airbus.com. You may • Send paper comments to Brent J. Release’’).
view this service information at the FAA, Fields, Secretary, Securities and 2 See id.
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frequently in the recent past than other 72003(a) requires that the study of • Item 402 of Regulation S–K
disclosure requirements in Regulation Regulation S–K: generally requires disclosure of all plan
S–K, such as executive compensation • Determine how best to modernize and non-plan compensation awarded to,
and governance contained in Subpart and simplify such requirements in a earned by, or paid to a registrant’s
400 of Regulation S–K.3 Last year, the manner that reduces the costs and named executive officers and
Commission also published a request for burdens on issuers while still providing directors.13
comment to seek public input about the all material information; • Item 403 of Regulation S–K
financial disclosure requirements in • Emphasize a company-by-company generally requires a description of the
Regulation S–X for certain entities other approach that allows relevant and security ownership of certain beneficial
than a registrant.4 material information to be disseminated owners and management.14
to investors without boilerplate • Item 404 of Regulation S–K
These efforts, in addition to this
language or static requirements while generally requires a description of
request for comment, are part of a certain transactions with related
comprehensive evaluation of the preserving completeness and
comparability of information across persons, promoters and certain control
Commission’s disclosure requirements persons.15
recommended in the staff’s Report on registrants; and
• Evaluate methods of information • Item 405 of Regulation S–K
Review of Disclosure Requirements in generally requires a registrant to identify
delivery and presentation and explore
Regulation S–K (‘‘S–K Study’’), which certain persons who failed to file on a
methods for discouraging repetition and
was mandated by Section 108 of the timely basis, as disclosed in certain
the disclosure of immaterial
Jumpstart Our Business Startups Act forms, reports required by Section 16(a)
information.8
(‘‘JOBS Act’’).5 As noted in the of the Securities Exchange Act 16 during
Regulation S–K Concept Release, based Request for Comment the most recent fiscal year or prior fiscal
on the S–K Study’s recommendation The initiative to review the disclosure years.17
and at the request of the Chair, requirements in Regulation S–K is • Item 406 of Regulation S–K
Commission staff initiated a intended to result in recommendations generally requires disclosures about
comprehensive evaluation of the type of and proposals that will improve our whether the registrant has adopted a
information our rules require registrants disclosure system for the benefit of code of ethics that applies to certain of
to disclose, how this information is investors and registrants. The purpose the registrant’s executive officers, or
presented, where and how this of this request for comment is to solicit persons performing similar functions,
information is disclosed, and how the public input on Subpart 400 of and, if it has not adopted such a code
Commission can leverage technology as Regulation S–K, which requires certain of ethics, an explanation why it has not
part of these efforts (collectively, disclosures about a registrant’s done so.18
‘‘Disclosure Effectiveness Initiative’’). management, certain security holders, • Item 407 of Regulation S–K
Section 72003(a) of the FAST Act 6 also and corporate governance matters.9 The generally requires certain corporate
requires the Commission to carry out a input can include comments on existing governance disclosure about director
study of the requirements contained in requirements in these rules as well as on independence, board meetings, various
Regulation S–K.7 Specifically, Section potential disclosure issues that board committees (e.g., nominating,
commenters believe the rules should audit and compensation committees)
3 See, e.g., Executive Compensation and Related
address.10 The comments received in and any process for shareholder
Person Disclosure, Release No. 33–8732A (Aug. 29, communications.19
2006) [71 FR 53157 (Sept. 8, 2006)]; Proxy response to this request for comment, as
Disclosure Enhancements, Release No. 33–9089 well as comments received in response In connection with the staff’s
(Dec. 16, 2009) [74 FR 68333 (Dec. 23, 2009)]; Staff to the Regulation S–K Concept Release, continuing Disclosure Effectiveness
Observations in the Review of Executive Initiative and corresponding work on
Compensation Disclosure, Division of Corporation
will inform the Commission in carrying
the FAST Act mandate, the Commission
Finance (Oct. 9, 2007), available at https:// out the study of Regulation S–K
welcomes public comments on the
www.sec.gov/divisions/corpfin/guidance/ required by Section 72003(a) of the
execcompdisclosure.htm. As the Commission noted issues that the staff should consider in
FAST Act.11
in the Regulation S–K Concept Release, the scope
• Item 401 of Regulation S–K conducting its review of Subpart 400 of
of that release does not include certain disclosure
generally requires certain disclosures Regulation S–K, including, among other
requirements for information other than business things, how best to modernize and
and financial disclosures, such as Subpart 400, about a registrant’s directors, executive
which requires disclosure about management and officers, promoters and control 13 17 CFR 229.402. Item 402 also describes the
certain security holders as well as corporate
governance matters. See Regulation S–K Concept
persons.12 disclosure requirements for certain categories of
Release, supra note 1, at Section I, n. 4. This request registrants such as foreign private issuers and
for comment directly covers those subjects. Committee and the Advisory Committee on Small smaller reporting companies. The Commission has
4 See Request for Comment on the Effectiveness and Emerging Companies. a number of outstanding proposals related to
of Financial Disclosures about Entities Other Than 8 Public Law 114–94, Sec. 72003, 129 Stat. 1312 executive compensation disclosure and listing
the Registrant, Release No. 33–9929 (Sept. 25, 2015) (2015). requirements. See Disclosure of Hedging by
[80 FR 59083 (Oct. 1, 2015)]. 9 17 CFR 229.401 et seq. Employees, Officers and Directors, Release No. 33–
5 Public Law 112–106, Sec. 108, 126 Stat. 306 10 For example, as noted in the Regulation S–K 9723 (Feb. 9, 2015) [80 FR 8485 (Feb. 17, 2015)];
Pay Versus Performance, Release 34–74835 (Apr.
(2012). Section 108 of the JOBS Act requires the Concept Release, supra note 1, this could include
29, 2015) [80 FR 26329 (May 7, 2015)]; Listing
Commission to conduct a review of Regulation S– industry-specific disclosure requirements,
Standards for Recovery of Erroneously Awarded
K to determine how such requirements can be information about sustainability and governance
Compensation, Release No. 33–9861 (July 1, 2015)
updated to modernize and simplify the registration matters, and additional instances in which scaled
[80 FR 41143 (July 14, 2015)]. This release requests
process for emerging growth companies. The S–K disclosure could be implemented.
ehiers on DSK5VPTVN1PROD with PROPOSALS
comment on the disclosure requirements in Item
Study is available at http://www.sec.gov/news/ 11 Comment letters received in response to this
402 generally and is not intended to solicit specific
studies/2013/reg-sk-disclosure-requirements- request for comment will be considered in comment on those proposals.
review.pdf. For a further discussion of the S–K connection with any future rulemaking related to 14 17 CFR 229.403.
Study, see the Regulation S–K Concept Release, the disclosure requirements in Subpart 400 of 15 17 CFR 229.404.
supra note 1, at Section II.C. Regulation S–K. If the Commission proposes
6 Public Law 114–94, Sec. 72003, 129 Stat. 1312 16 15 U.S.C. 78p.
changes to these disclosure requirements the
17 17 CFR 229.405.
(2015). proposed changes will be subject to public notice
7 In conducting this study, the Commission is and comment. 18 17 CFR 229.406.
required to consult with the Investor Advisory 12 17 CFR 229.401. 19 17 CFR 229.407.
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![Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Proposed Rules 59929
simplify these disclosure items in view research and conduct of instructional Where the necessary findings are
of the objectives of the Regulation S–K activities of these opioids. made, a substance may be temporarily
study set forth in Section 72003 of the DATES: August 31, 2016. scheduled if it is not listed in any other
FAST Act and whether additional FOR FURTHER INFORMATION CONTACT: schedule under section 202 of the CSA,
disclosures in these areas are necessary Michael J. Lewis, Office of Diversion 21 U.S.C. 812, or if there is no
or appropriate to facilitate investor Control, Drug Enforcement exemption or approval in effect for the
protection, to maintain fair, orderly, and Administration; Mailing Address: 8701 substance under section 505 of the
efficient markets, and/or to facilitate Morrissette Drive, Springfield, Virginia Federal Food, Drug, and Cosmetic Act
capital formation. In addition to the 22152; Telephone: (202) 598–6812. (FDCA), 21 U.S.C. 355. 21 U.S.C.
substance of the disclosure 811(h)(1). The Attorney General has
SUPPLEMENTARY INFORMATION: Any final
requirements, the Commission delegated scheduling authority under 21
order will be published in the Federal U.S.C. 811 to the Administrator of the
welcomes comments on how
Register and may not be effective prior DEA. 28 CFR 0.100.
information can be presented to
to September 30, 2016.
improve its readability, navigability and Background
comparability and how technology and Legal Authority
structured data can facilitate data Section 201(h)(4) of the CSA, 21
The Drug Enforcement U.S.C. 811(h)(4), requires the
aggregation and analysis. All interested Administration (DEA) implements and
parties are invited to submit their views Administrator to notify the Secretary of
enforces titles II and III of the the Department of Health and Human
and any data, in writing, on any matter Comprehensive Drug Abuse Prevention
relating to Subpart 400 of Regulation Services (HHS) of his intention to
and Control Act of 1970, as amended. 21 temporarily place a substance into
S–K. U.S.C. 801–971. Titles II and III are schedule I of the CSA.1 The
By the Commission. referred to as the ‘‘Controlled Administrator transmitted notice of his
Dated: August 25, 2016. Substances Act’’ and the ‘‘Controlled intent to place mitragynine and 7-
Brent J. Fields, Substances Import and Export Act,’’ hydroxymitragynine in schedule I on a
Secretary. respectively, and are collectively temporary basis to the Assistant
[FR Doc. 2016–20906 Filed 8–30–16; 8:45 am]
referred to as the ‘‘Controlled Secretary by letter dated May 6, 2016.
Substances Act’’ or the ‘‘CSA’’ for the The Assistant Secretary responded to
BILLING CODE 8011–01–P
purpose of this action. The DEA this notice by letter dated May 18, 2016,
publishes the implementing regulations and advised that based on review by the
for these statutes in title 21 of the Code Food and Drug Administration (FDA),
DEPARTMENT OF JUSTICE of Federal Regulations (CFR), chapter II. there are currently no investigational
The CSA and its implementing new drug applications or approved new
Drug Enforcement Administration regulations are designed to prevent, drug applications for mitragynine and 7-
detect, and eliminate the diversion of hydroxymitragynine. The Assistant
21 CFR Part 1308 controlled substances and listed Secretary also stated that the HHS has
chemicals into the illicit market while no objection to the temporary placement
[Docket No. DEA–442]
providing for the legitimate medical, of mitragynine and 7-
Schedules of Controlled Substances: scientific, research, and industrial needs hydroxymitragynine into schedule I of
Temporary Placement of Mitragynine of the United States. Controlled the CSA. Neither mitragynine nor 7-
and 7-Hydroxymitragynine Into substances have the potential for abuse hydroxymitragynine is currently listed
Schedule I and dependence and are controlled to in any schedule under the CSA, and no
protect the public health and safety. approved new drug applications or
AGENCY: Drug Enforcement Under the CSA, each controlled investigational new drug applications
Administration, Department of Justice. substance is classified into one of five for mitragynine or 7-
ACTION: Notice of intent. schedules based upon its potential for hydroxymitragynine exist, 21 U.S.C.
abuse, its currently accepted medical 355. The DEA has found that the control
SUMMARY: The Administrator of the Drug use in treatment in the United States, of mitragynine and 7-
Enforcement Administration is issuing and the degree of dependence the drug hydroxymitragynine in schedule I on a
this notice of intent to temporarily or other substance may cause. 21 U.S.C. temporary basis is necessary to avoid an
schedule the opioids mitragynine and 7- 812. The initial schedules of controlled imminent hazard to public safety.
hydroxymitragynine, which are the substances established by Congress are To find that placing a substance
main active constituents of the plant found at 21 U.S.C. 812(c), and the temporarily into schedule I of the CSA
kratom, into schedule I pursuant to the current list of all scheduled substances is necessary to avoid an imminent
temporary scheduling provisions of the is published at 21 CFR part 1308. hazard to the public safety, the
Controlled Substances Act. This action Section 201 of the CSA, 21 U.S.C. 811, Administrator is required to consider
is based on a finding by the provides the Attorney General with the three of the eight factors set forth in
Administrator that the placement of authority to temporarily place a section 201(c) of the CSA, 21 U.S.C.
these opioids into schedule I of the substance into schedule I of the CSA for
Controlled Substances Act is necessary two years without regard to the 1 As discussed in a memorandum of
to avoid an imminent hazard to the requirements of 21 U.S.C. 811(b) if she understanding entered into by the Food and Drug
public safety. Any final order will finds that such action is necessary to Administration (FDA) and the National Institute on
ehiers on DSK5VPTVN1PROD with PROPOSALS
Drug Abuse (NIDA), the FDA acts as the lead agency
impose the administrative, civil, and avoid an imminent hazard to the public within the Department of Health and Human
criminal sanctions and regulatory safety. 21 U.S.C. 811(h)(1). In addition, Services (HHS) in carrying out the Secretary’s
controls applicable to schedule I if proceedings to control a substance are scheduling responsibilities under the CSA, with the
controlled substances under the initiated under 21 U.S.C. 811(a)(1), the concurrence of NIDA. 50 FR 9518, Mar. 8, 1985.
The Secretary of the HHS has delegated to the
Controlled Substances Act on the Attorney General may extend the Assistant Secretary for Health of the HHS the
manufacture, distribution, possession, temporary scheduling for up to one authority to make domestic drug scheduling
importation, and exportation of, and year. 21 U.S.C. 811(h)(2). recommendations. 58 FR 35460, July 1, 1993.
VerDate Sep<11>2014 14:16 Aug 30, 2016 Jkt 238001 PO 00000 Frm 00023 Fmt 4702 Sfmt 4702 E:\FR\FM\31AUP1.SGM 31AUP1](https://thefederalregister.org/doc/81_FR_60096/page/3.svg)
Document Created: 2018-02-02 12:15:05
Document Modified: 2018-02-02 12:15:05
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Request for comment. | |
| Dates | Comments should be received on or before October 31, 2016. | |
| Contact | Eduardo A. Aleman, Special Counsel, Office of Rulemaking, Division of Corporation Finance, at (202) 551- 3430, 100 F Street NE., Washington, DC 20549. | |
| FR Citation | 81 FR 59927 |
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