[Federal Register Volume 75, Number 202 (Wednesday, October 20, 2010)]
[Rules and Regulations]
[Pages 64642-64643]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-26347]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Part 230
[Release No. 33-9152; File No. S7-14-08]
RIN 3235-AK16
Indexed Annuities
AGENCY: Securities and Exchange Commission.
ACTION: Final rule; withdrawal; request for comment on Paperwork
Reduction Act burden estimate.
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SUMMARY: We are withdrawing rule 151A under the Securities Act of 1933,
which defines the terms ``annuity contract'' and ``optional annuity
contract'' under the Act. On July 12, 2010, the United States Court of
Appeals for the District of Columbia Circuit issued an order vacating
the rule.
DATES: 17 CFR 230.151A (Rule 151A), published at 74 FR 3175 (January
16, 2009) and effective on January 12, 2011, is withdrawn as of October
20, 2010.
FOR FURTHER INFORMATION CONTACT: Michael L. Kosoff, Senior Counsel,
Office of Insurance Products, Division of Investment Management, at
(202) 551-6795, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-8629.
SUPPLEMENTARY INFORMATION: On January 8, 2009, the Commission issued a
release adopting rule 151A under the Securities Act of 1933.\1\ Rule
151A defines the terms ``annuity contract'' and ``optional annuity
contract'' under the Securities Act. The rule was intended to clarify
the status under the Federal securities laws of indexed annuities,
under which payments to the purchaser are dependent on the performance
of a securities index. On July 12, 2010, the United States Court of
Appeals for the District of Columbia Circuit issued an order vacating
rule 151A in American Equity Investment Life Insurance Company, et al.
v. Securities and Exchange Commission, No. 09-1021 (D.C. Cir.).
Accordingly, the Commission hereby withdraws rule 151A, which was
published at 74 FR 3175 (Jan. 16, 2009).
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\1\ 15 U.S.C. 77a et seq.; Securities Act Release No. 8996 (Jan.
8, 2009) [74 FR 3138 (Jan. 16, 2009)].
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Paperwork Reduction Act
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995,\2\ the Commission is soliciting comment on changes to a
collection of information necessitated by the Court order vacating rule
151A. The Commission is submitting this existing collection of
information to the Office of Management and Budget for change and
approval.
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\2\ 44 U.S.C. 3501 et seq.
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The burdens associated with rule 151A are currently approved under
the ``collection of information'' requirements for Form S-1 under the
Securities Act of 1933 (``Form S-1'' (OMB Control No. 3235-0065)). This
form sets forth the disclosure requirements for registration statements
that are prepared by eligible issuers. The Commission previously
estimated that there would be an annual increase of 400 responses on
Form S-1. In connection with this increase in expected responses, the
Commission increased the estimated burden for Form S-1 by 60,000 hours
of internal staff time and $72 million of external professional costs.
Since the Commission's adoption of rule 151A, the Commission has
adopted changes to the information required by Form S-1, which have
further increased the total hours and cost burden associated with the
400 additional responses that we estimated would result from the
adoption of rule 151A by approximately 1,600 hours and $1,920,000.\3\
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\3\ These changes in the burden estimates are the result of the
adoption of rules enhancing information provided in connection with
proxy solicitations and in other reports filed with the Commission.
Securities Act Release No. 9089 (Dec. 16, 2009) [74 FR 68334 (Dec.
23, 2009)]. That rulemaking assigned an incremental burden increase
of 16 hours per response on Form S-1. We estimated that 25% of that
burden would be carried by the company internally and that 75% of
the burden would by carried by outside professionals retained by the
company at an average cost of $400 per hour. Accordingly, we
estimated an incremental internal burden increase of 4 (25% of 16)
hours and an incremental external cost increase of $4800 (75% of 16
= 12 and 12 x $400 = $4800) for each response, including the 400
additional responses that we had expected as a result of rule 151A.
Thus, the rulemaking assigned an additional burden for the 400
responses of 1600 (400 x 4) hours and $1,920,000 (400 x $4800). In
addition, another rulemaking following the adoption of rule 151A
also resulted in a change in the burden estimate for Form S-1.
Securities Release No. 33-8995 (Dec. 31, 2008) [74 FR 2158 (Jan. 14,
2009)]. However, that rulemaking modified reporting requirements for
oil and gas companies and did not affect the estimated burden for
the additional 400 filers under rule 151A.
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As a result of the Court order, the Commission no longer expects
that there will be an annual increase of 400 responses on Form S-1, and
believes that the estimate of the corresponding burdens for Form S-1
should be decreased by the amount of the burden associated with those
400 responses. Accordingly, the Commission estimates that the Court
order will have the effect of decreasing the estimated burden for Form
S-1 by 61,600 hours of internal staff time (60,000 plus 1,600) and
$73,920,000 for external professional costs ($72,000,000 plus
$1,920,000).
The information collection requirements related to Form S-1 are
mandatory. There is no mandatory retention period for the information
disclosed, and the information disclosed is made publicly available on
the EDGAR filing system. An agency may not conduct or sponsor, and a
person is not required to respond to, a collection of information
unless it displays a currently valid OMB control number.
We request comment on the accuracy of the Commission's estimate of
the change in the burden for Form S-1. Persons wishing to submit
comments on the collection of information requirements should direct
them to the Office of Management and Budget, Attention Desk Officer for
the Securities and Exchange Commission, Office of Information and
Regulatory Affairs, Washington, DC 20503 and should send a copy to
Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100
F Street, NE., Washington, DC 20549-1090, with reference to File No.
S7-14-08. Requests for materials submitted to OMB by the Commission
with regard to this collection of information should be in writing,
refer to File No. S7-14-08, and be submitted to the Securities and
Exchange Commission, Office of Investor Education and Advocacy, 100 F
Street, NE., Washington, DC 20549-0213. OMB is required to make a
decision concerning the collection of information between 30 and 60
days after publication of this release. Consequently, a comment to OMB
is best assured of having its full effect if OMB receives it within 30
days after publication.
Procedural and Other Matters
Section 553 of the Administrative Procedure Act provides that when
an agency for good cause finds that notice and public comment
procedures are impracticable, unnecessary, or contrary to the public
interest, the agency may issue a rule without providing notice and an
opportunity for public comment.\4\ The Commission has determined that
there is good cause for making today's withdrawal of rule 151A final
without prior proposal and
[[Page 64643]]
opportunity for comment. Because of the Court order vacating rule 151A,
the Commission's action to withdraw the rule is ministerial in nature.
Accordingly, the Commission for good cause finds that a notice and
comment period is unnecessary.\5\
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\4\ 5 U.S.C. 553(b)(B).
\5\ This finding also satisfies the requirements of 5 U.S.C.
808(2) (if a Federal agency finds that notice and public comment are
``impracticable, unnecessary or contrary to the public interest,'' a
rule ``shall take effect at such time as the Federal agency
promulgating the rule determines''), allowing the withdrawal to
become effective notwithstanding the requirement of 5 U.S.C. 801. No
analysis is required under the Regulatory Flexibility Act. See 5
U.S.C. 601(2) (for purposes of Regulatory Flexibility Act analysis,
the term ``rule'' means any rule for which the agency publishes a
general notice of proposed rulemaking).
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The Administrative Procedure Act also generally requires that an
agency publish an adopted rule in the Federal Register 30 days before
it becomes effective.\6\ This requirement, however, does not apply if
the agency finds good cause for making this action to withdraw rule
151A effective sooner. For the reason discussed above, the Commission
finds that there is good cause to make withdrawal of the rule effective
immediately.
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\6\ See 5 U.S.C. 553(d).
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The Commission considers the costs and benefits of its rules and
regulations. As discussed above, rule 151A was vacated by the Court and
the action the Commission takes today merely implements the Court's
decision. Our action to withdraw the rule is ministerial and therefore
will have no separate economic effect.
Conclusion
Therefore, for the reasons set out in the preamble, 17 CFR 230.151A
(rule 151A), published at 74 FR 3175 (January 16, 2009) and effective
on January 12, 2011, is withdrawn.
By the Commission.
Dated: October 14, 2010.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-26347 Filed 10-19-10; 8:45 am]
BILLING CODE 8011-01-P