83 FR 44465 - Delegation of Authority to General Counsel of the Commission

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 170 (August 31, 2018)

The Securities and Exchange Commission (``Commission'') is revising regulations with respect to the delegations of authority to the Commission's General Counsel. The revisions are a result of the Commission's experience with its existing rules and increase the efficiency of the adjudicatory process.

[Federal Register Volume 83, Number 170 (Friday, August 31, 2018)]
[Rules and Regulations]
[Pages 44465-44467]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-18585]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 200

[Release Nos. 33-10537; 34-83911; IA-4994; IC-33212]


Delegation of Authority to General Counsel of the Commission

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
revising regulations with respect to the delegations of authority to 
the Commission's General Counsel. The revisions are a result of the 
Commission's experience with its existing rules and increase the 
efficiency of the adjudicatory process.

DATES: This rule is effective August 31, 2018.

FOR FURTHER INFORMATION CONTACT: Brian J. Wong, Senior Counsel, and 
Benjamin L. Schiffrin, Associate General Counsel, Office of the General 
Counsel, (202) 551-5150, Securities and Exchange Commission, 100 F 
Street NE, Washington, DC 20549.

SUPPLEMENTARY INFORMATION:

I. Background

    The Commission is revising the delegations of authority to its 
General Counsel as a result of the Commission's experience with its 
existing rules and to increase the efficiency of the adjudicatory 
process. The changes make available to that process the resources of 
the Office of the General Counsel in timely disposing of procedural and 
other prehearing matters that are typically of a routine or non-
controversial nature. Congress has authorized such delegation by Public 
Law 87-592, 76 Stat. 394, 15 U.S.C. 78d-1(a), which provides that the 
Commission ``shall have the authority to delegate, by published rule or 
order, any of its functions to . . . an employee or employee board, 
including functions with respect to hearing, determining, ordering, 
certifying, reporting, or

[[Page 44466]]

otherwise acting as to any work, business or matter.''
    Accordingly, the Commission is amending its rules to delegate 
authority to the General Counsel to determine procedural requests and 
other non-dispositive, prehearing matters with respect to 
administrative proceedings conducted pursuant to the Securities Act of 
1933, 15 U.S.C. 77a et seq., the Securities Exchange Act of 1934, 15 
U.S.C. 78a et seq.; the Investment Company Act of 1940, 15 U.S.C. 80a-1 
et seq.; the Investment Advisers Act of 1940, 15 U.S.C. 80b-1 et seq.; 
and the provisions of Rule 102(e) of the Commission's Rules of 
Practice, 17 CFR 201.102(e), that have been set for hearing before the 
Commission. Under this delegation, the General Counsel (or, under his 
or her direction, such persons as might be designated from time to time 
by the Chairman of the Commission) would perform functions such as 
fixing times and places for hearings after a proceeding has been 
authorized; adjusting or cancelling hearing dates; setting or modifying 
briefing schedules; staying the proceeding pending a related criminal 
proceeding or the Commission's consideration of an offer of settlement; 
reducing or extending the time within which to file papers; modifying 
length limitations; denying or granting leave to file motions and other 
papers; resolving applications for confidential treatment or to 
maintain materials under seal; making rulings regarding the manner or 
timing of service or of the Division of Enforcement's production of its 
investigative file; directing that the parties meet for a prehearing 
conference and scheduling or cancelling such a conference; issuing an 
order to show cause if a party fails to answer, respond to a 
dispositive motion, or otherwise defend the proceeding within the time 
provided; striking procedurally deficient filings; and other similarly 
routine matters that arise in administrative proceedings.
    The Commission does not delegate to the General Counsel functions 
with respect to issuing subpoenas, authorizing depositions, ruling upon 
the admissibility of evidence or upon motions to quash or to compel, 
presiding over a hearing or the taking of testimony, sanctioning a 
party, acting upon a dispositive motion, declaring a default, disposing 
of a claim or defense, or otherwise resolving or terminating the 
proceeding on the merits. This rule also does not affect the delegation 
of functions with respect to administrative proceedings conducted 
before an administrative law judge or other hearing officer, 
proceedings in which an initial or recommended decision has been 
issued, or proceedings in which a final order of the Commission has 
been issued.
    With respect to any proceeding in which the Chairman or the General 
Counsel has determined that separation of functions requirements or 
other circumstances would make inappropriate the General Counsel's 
exercise of such functions, those functions are delegated to the 
Secretary of the Commission. Notwithstanding this delegation, the 
General Counsel may submit any matter he or she believes appropriate to 
the Commission. Furthermore, any action made by the General Counsel 
pursuant to delegated authority would be subject to Commission review 
as provided by Rules 430 and 431 of the Commission's Rules of Practice, 
17 CFR 201.430-201.431 and 15 U.S.C. 78d-1(b). Additionally, being of 
an inherently preliminary and interlocutory nature, any such action may 
be revisited by the Commission, on its own initiative or on request of 
a party, at any time before the Commission's issuance of a final order 
resolving the proceeding.

II. Administrative Law Matters

    The Commission finds, in accordance with the Administrative 
Procedure Act (``APA''), 5 U.S.C. 553(b)(3)(A), that these revisions 
relate solely to agency organization, procedures, or practice and do 
not constitute a substantive rule. Accordingly, the APA's provisions 
regarding notice of rulemaking, opportunity for public comment, and 
advance publication of the amendments prior to their effective date are 
not applicable. These changes are therefore effective on August 31, 
2018. For the same reason, and because these amendments do not affect 
the rights or obligations of non-agency parties, the provisions of the 
Small Business Regulatory Enforcement Fairness Act, 5 U.S.C. 804(3)(C), 
are not applicable. Additionally, the provisions of the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq., which apply only when notice and 
comment are required by the APA or other law, are not applicable. These 
amendments do not contain any collection of information requirements as 
defined by the Paperwork Reduction Act of 1995, and in any event, 
agency information collections during the conduct of administrative 
proceedings are exempt from that Act. See 44 U.S.C. 3518(c)(1)(B)(ii); 
5 CFR 1320.4. Further, because the amendments impose no new burdens on 
private parties, the Commission does not believe that the amendments 
will have any impact on competition for purposes of Section 23(a)(2) of 
the Exchange Act.

III. Statutory Authority

    This rule is adopted pursuant to statutory authority granted to the 
Commission, including Section 19 of the Securities Act, 15 U.S.C. 77s; 
Sections 4A, 4B, and 23 of the Exchange Act, 15 U.S.C. 78d-1, 78d-2, 
and 78w; Section 38 of the Investment Company Act, 15 U.S.C. 80a-37; 
Section 211 of the Investment Advisers Act, 15 U.S.C. 80b-11; and 
Section 3 of the Sarbanes-Oxley Act of 2002, 15 U.S.C. 7202.

List of Subjects in 17 CFR Part 200

    Administrative practice and procedure, Authority delegations 
(government agencies).

Text of Amendments

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

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

Subpart A--Organization and Program Management

0
1. The authority citation for Part 200, Subpart A continues to read in 
part as follows:

    Authority: 15 U.S.C. 77c, 77o, 77s, 77z-3, 77sss, 78d, 78d-1, 
78d-2, 78o-4, 78w, 78ll(d), 78mm, 80a-37, 80b-11, 7202, and 7211 et 
seq., unless otherwise noted.
* * * * *

0
2. Section 200.30-7 is amended by:
0
a. Redesignating paragraph (d) as paragraph (e); and
0
b. Adding new paragraph (d) to read as follows:


Sec.  200.30-7   Delegation of authority to Secretary of the 
Commission.

* * * * *
    (d) The functions otherwise delegated to the General Counsel under 
Sec.  200.30-14(i), with respect to any proceeding in which the 
Chairman or the General Counsel has determined, pursuant to Sec.  
200.30-14(j), that separation of functions requirements or other 
circumstances would make inappropriate the General Counsel's exercise 
of such delegated functions.
* * * * *

0
3. Section 200.30-14 is amended by:
0
a. Redesignating paragraphs (i) through (m) as paragraphs (k) through 
(o);
0
b. Adding new paragraphs (i) and (j); and
0
c. Revising newly redesignated paragraph (k).

[[Page 44467]]

    The addition and revisions read as follows.


Sec.  200.30-14   Delegation of authority to the General Counsel.

* * * * *
    (i)(1) With respect to a proceeding conducted pursuant to the 
Securities Act of 1933, 15 U.S.C. 77a et seq., the Securities Exchange 
Act of 1934, 15 U.S.C. 78a et seq.; the Investment Company Act of 1940, 
15 U.S.C. 80a-1 et seq.; the Investment Advisers Act of 1940, 15 U.S.C. 
80b-1 et seq.; and the provisions of Rule 102(e) of the Commission's 
Rules of Practice, 17 CFR 201.102(e), that has been set for hearing 
before the Commission pursuant to Rule 110 of the Commission's Rules of 
Practice, 17 CFR 201.110:
    (i) To determine procedural requests or similar prehearing matters; 
and
    (ii) To rule upon non-dispositive, prehearing motions.
    (2) Provided, however, that the General Counsel may not issue 
subpoenas, authorize depositions, rule upon the admissibility of 
evidence or upon motions to quash or to compel, preside over a hearing 
or the taking of testimony, sanction a party, act upon a dispositive 
motion, declare a default, dispose of a claim or defense, or otherwise 
resolve or terminate the proceeding on the merits.
    (j) Notwithstanding anything in paragraph (i) of this section, the 
functions described in paragraph (i) of this section are not delegated 
to the General Counsel with respect to proceedings in which the 
Chairman or the General Counsel determines that separation of functions 
requirements or other circumstances would make inappropriate the 
General Counsel's exercise of such delegated functions. With respect to 
such proceedings, such functions are delegated to the Secretary of the 
Commission pursuant to Sec.  200.30-7.
    (k) Notwithstanding anything in paragraphs (g) or (i) of this 
section, in any case described in paragraphs (g) or (i) of this section 
in which the General Counsel believes it appropriate, he or she may 
submit the matter to the Commission.
* * * * *

    By the Commission.

    Dated: August 22, 2018.
Brent J. Fields,
Secretary.
[FR Doc. 2018-18585 Filed 8-30-18; 8:45 am]
BILLING CODE 8011-01-P