[Federal Register: August 10, 2005 (Volume 70, Number 153)]
[Rules and Regulations]
[Page 46403-46405]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10au05-1]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
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[[Page 46403]]
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 11
[Docket No. 05-14]
RIN 1557-AC75
Electronic Filing and Disclosure of Beneficial Ownership Reports
AGENCY: Office of the Comptroller of the Currency, Treasury.
ACTION: Final rule.
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SUMMARY: The Office of the Comptroller of the Currency (OCC) is issuing
this final rule to adopt in final form, without substantive change, an
interim rule to amend the OCC's rules, policies, and procedures to
require the electronic filing of beneficial ownership reports by
officers, directors, and major shareholders of national banks that have
equity securities registered under the Securities Exchange Act of 1934.
As required by the interim rule, this final rule requires that all
reports filed with the OCC under section 16(a) of the Securities
Exchange Act of 1934 must be filed electronically and posted on a
registered national bank's Web site, if it has one, as soon as
practicable. This final rule clarifies procedures for officers,
directors, and principal shareholders of registered national banks to
comply with these mandated electronic filing requirements.
DATES: This final rule is effective on September 9, 2005.
FURTHER INFORMATION CONTACT: Asa Chamberlayne, Counsel, Securities and
Corporate Practices Division, 202-874-5210, or Martha Vestal Clarke,
Counsel, Legislative and Regulatory Activities Division, 202-874-5090.
SUPPLEMENTARY INFORMATION:
Background
The Securities Exchange Act of 1934 (Exchange Act) seeks to protect
investors by requiring accurate, reliable, and timely corporate
securities disclosures. Generally, companies with equity securities
that are subject to the registration requirements under section 12 of
the Exchange Act (15 U.S.C. 78l) must register these securities with
the Securities and Exchange Commission (SEC). Section 16(a) of the
Exchange Act (15 U.S.C. 78p(a)) requires directors, executive officers,
and direct or indirect beneficial owners of more than 10 percent of a
class of securities that are registered under the Exchange Act
(insiders) to file beneficial ownership reports regarding their
ownership and transactions in the company's securities.\1\ Section
12(i) of the Exchange Act (15 U.S.C. 78l(i)) vests the OCC, rather than
the SEC, with the power to issue regulations implementing certain
Exchange Act requirements with respect to national banks that have
equity securities registered under the Exchange Act (registered
national banks), including section 16, and with the authority to
administer and enforce these requirements.\2\
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\1\ Section 16(a) also requires an entity that has registered
its securities under the Exchange Act to file initial and
transactional reports with any national securities exchange on which
it has listed its securities. See 15 U.S.C. 78p(a).
\2\ Under section 12(i), the other Federal banking agencies have
the same authority with respect to the registered depository
institutions that they supervise. See 15 U.S.C. 78l(i).
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As amended by the Sarbanes-Oxley Act of 2002, Pub. L. 107-204,
section 16(a) requires that insiders of a registered company, including
a registered national bank, must file beneficial ownership reports: (1)
At the time the company registers its securities pursuant to section 12
of the Exchange Act; (2) within 10 days after becoming an insider of a
registered national bank; and (3) within two business days after an
insider consummates a transaction resulting in a change in ownership,
or resulting in the purchase or sale of a security-based swap
agreement,\3\ in the registered securities. These provisions became
effective on August 29, 2002.
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\3\ The term ``security-based swap agreement'' is defined in
section 206(b) of the Gramm-Leach-Bliley Act (15 U.S.C. 78c note).
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Section 16(a)(4) (15 U.S.C. 78p(a)(4)) also requires that,
beginning July 30, 2003, insiders must file their change-in-ownership
reports electronically. Moreover, the SEC, and the OCC in the case of
registered national banks, must make these filings available to the
public on the Internet not later than the end of the business day
following the filing. Also, a registered company, including a
registered national bank, must post its insiders' change-in-ownership
reports on its Web site, if it has a Web site, not later than the end
of the business day following the filing.
The SEC's final rules implementing these requirements for other
public companies mandate that all beneficial ownership reports filed
under section 16(a), not only the change-in-ownership reports, must be
filed electronically and posted on a public company's Web site, if the
company has a Web site, not later than the end of the business day
following the filing. In addition, the SEC provides Internet access to
all such filings that are filed with the SEC. The SEC's rules were
effective for all section 16(a) filings that are made on or after June
30, 2003.\4\
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\4\ See 68 FR 25788 (May 13, 2003).
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The SEC's final rules also amended 17 CFR 240.16a-3, which applies
to registered national banks through the OCC's regulations at 12 CFR
11.2(b)(2). As amended by the SEC, 17 CFR 240.16a-3 provides that any
issuer with a corporate Web site must post any section 16(a) report on
that Web site by the end of the business day after the filing, and the
filing must remain accessible on the Web site for at least 12 months.
These same requirements apply to registered national banks.
On September 22, 2003, the OCC published and requested comment on
an interim rule amending 12 CFR part 11 (see 68 FR 54981). In the
interim rule, we imposed requirements similar to those adopted by the
SEC and required that all section 16(a) reports must be filed
electronically by the required due dates. To provide for the electronic
filing of insiders' reports under section 16(a) of the Exchange Act,
the Federal Deposit Insurance Corporation, the Board of Governors of
the Federal Reserve System, and the OCC created an electronic filing
system utilizing the FDICconnect secure Web platform. This filing
system became operational on July 30, 2003.
In order to assure that this new system was operating effectively,
we did
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not require compliance with the electronic filing and Web site posting
requirements until January 1, 2004. We advised that, before January 1,
2004, to the extent practicable, registered national banks should post
the section 16(a) filings on their Web sites and their insiders should
file their section 16(a) reports electronically.
Description of Comments and Final Rule
The comment period on the interim rule ended November 21, 2003, and
no comments were received. Moreover, while a very few banks may have
had some minor problems connecting to or filing reports on FDICconnect
in the past, no further problems have been reported. Thus, the OCC is
adopting the interim rule as a final rule with no substantive
modifications.
Accordingly, the final rule revises 12 CFR 11.3(a), which relates
to filing requirements and the inspection of documents filed with the
OCC pursuant to the Exchange Act. The rule contains a new Sec.
11.3(a)(2), which provides that statements that are required to be
filed electronically pursuant to section 16(a) of the Exchange Act
shall be filed electronically. New Sec. 11.3(a)(4) clarifies that the
electronic filing and Web site posting requirements are mandatory for
section 16(a) statements that are required to be filed on or after
January 1, 2004.
The final rule also adds a new Sec. 11.3(a)(3)(ii) which provides
that an electronic filing pursuant to section 16(a) of the Exchange Act
submitted by direct transmission on or before 10 p.m. Eastern Standard
Time or Eastern Daylight Savings Time, whichever is currently in
effect, shall be deemed filed on the same business day. This aspect of
the final rule is consistent with the SEC's rules applicable to
electronic filings that apply to other registered companies. See 17 CFR
232.13(a)(4).
The OCC's current rule at Sec. 11.2(b)(2) references the
requirements in the SEC's rules that a public company that has a Web
site must post any filings on Forms 3, 4, or 5-- the forms for filing
beneficial ownership reports under section 16(a) of the Exchange Act--
by the end of the business day after the filing and continue to make
that form accessible on its Web site for at least 12 months. See 17 CFR
240.16a-3. Under the OCC's current rules, a registered national bank is
required to post these filings on its Web site, if it has one, in
accordance with 17 CFR 240.16a-3.
The OCC has adopted the interim rule with one technical
modification concerning the authority citation. The interim rule
contained a change to the authority citation for part 11 that is no
longer necessary. The OCC made this change already in a final rule
amending 12 CFR parts 11 and 16, ``Reporting and Disclosure
Requirements for National Banks With Securities Registered Under the
Securities Exchange Act of 1934; Securities Offering Disclosure
Rules,''. See 68 FR 68489 (Dec. 9, 2003).
Regulatory Analysis
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995, the OCC may
not conduct or sponsor, and a respondent is not required to respond to,
an information collection unless it displays a currently valid Office
of Management and Budget (OMB) control number. The collections of
information requirements in 12 CFR part 11, including the requirements
in this final rule, have been submitted to and approved by OMB under
OMB Control Number 1557-0106.
Regulatory Flexibility Act
Pursuant to section 605(b) of the Regulatory Flexibility Act, 5
U.S.C. 605(b) (RFA), the regulatory flexibility analysis otherwise
required under section 604 of the RFA is not required if the agency
certifies that the rule will not have a significant economic impact on
a substantial number of small entities and publishes its certification
and a short, explanatory statement in the Federal Register along with
its rule. As of December 31, 2002, there were approximately 25
registered national banks subject to the amendments to part 11. As of
the same date, only 15 of these institutions have assets of less than
$100 million and are considered small entities for purposes of the RFA.
See 5 U.S.C. 601; 13 CFR 121.201.
Based on the relatively small number of national banks affected by
the final rule and the fact that the requirements will not materially
change the operating environment for those banks, the OCC hereby
certifies that this rulemaking will not have a significant economic
impact on a substantial number of small entities. Accordingly, a
regulatory flexibility analysis is not needed.
Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995, Pub. L.
104-04 (Unfunded Mandates Act) requires that an agency prepare a
budgetary impact statement before promulgating a rule that includes a
Federal mandate that may result in expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of $100
million or more in any one year. If a budgetary impact statement is
required, section 205 of the Unfunded Mandates Act also requires an
agency to identify and consider a reasonable number of regulatory
alternatives before promulgating a rule. The OCC has determined that
the final rule will not result in expenditures by State, local, or
tribal governments or by the private sector of $100 million or more.
Accordingly, the OCC has not prepared a budgetary impact statement or
specifically addressed the regulatory alternatives considered.
Executive Order 12866
The OCC has determined that this final rule does not constitute a
``significant regulatory action'' for the purposes of Executive Order
12866.
List of Subjects in 12 CFR Part 11
Confidential business information, National banks, Reporting and
recordkeeping requirements, Securities.
PART 11--SECURITIES EXCHANGE ACT DISCLOSURE RULES
0
1. The authority citation for part 11 continues to read as follows:
Authority: 12 U.S.C. 93a; 15 U.S.C. 78l, 78m, 78n, 78p, 78w,
7241, 7242, 7243, 7244, 7261, 7262, 7264 and 7265.
0
2. In Sec. 11.3, paragraph (a) is revised to read as follows:
Sec. 11.3 Filing requirements and inspection of documents.
(a) Filing requirements. (1) General. Except as otherwise provided
in this section, all papers required to be filed with the OCC pursuant
to the 1934 Act or regulations thereunder shall be submitted in
quadruplicate to the Securities and Corporate Practices Division,
Office of the Comptroller of the Currency, 250 E Street, SW.,
Washington, DC 20219. Material may be filed by delivery to the OCC
through the mail, by fax (202-874-5279), or otherwise.
(2) Statements filed pursuant to section 16(a) of the 1934 Act.
Statements required under section 16(a) of the 1934 Act shall be filed
electronically, as directed by the OCC.
(3) Date of filing. (i) General. The date on which papers are
actually received by the OCC shall be the date of filing, if the person
or bank filing the papers has complied with all applicable
requirements.
(ii) Electronic filings. An electronic filing of a statement
required under section 16(a) of the 1934 Act that is submitted by
direct transmission on or before 10 p.m. Eastern Standard Time or
Eastern Daylight Savings Time,
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whichever is currently in effect, shall be deemed filed on the same
business day.
(4) Mandatory compliance date. Compliance with paragraph (a)(2) of
this section and any applicable requirements that such statements must
be posted on a registered national bank's Web site are mandatory for
statements required to be filed on or after January 1, 2004.
* * * * *
Dated: August 3, 2005.
Julie L. Williams,
Acting Comptroller of the Currency.
[FR Doc. 05-15750 Filed 8-9-05; 8:45 am]
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