Administration of the Electronic Data Gathering, Analysis, and Retrieval System, 7961-7968 [2020-28273]

Agencies

• SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 86, Number 21 (Wednesday, February 3, 2021)]
[Rules and Regulations]
[Pages 7961-7968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28273]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 200 and 232

[Release Nos. 33-10901; 34-90636; 39-2535; IC-34136; File No. S7-11-20]
RIN 3235-AM77


Administration of the Electronic Data Gathering, Analysis, and 
Retrieval System

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
adopting a new rule that specifies several actions that the Commission, 
in its administration of the Electronic Data Gathering, Analysis, and 
Retrieval system (``EDGAR''), may take to promote the reliability and 
integrity of EDGAR submissions. The new rule establishes a process for 
the Commission to notify filers and other relevant persons of its 
actions under the rule as soon as reasonably practicable. In addition, 
the Commission is adopting amendments to delegate authority to the 
Director of the Commission's EDGAR Business Office to take actions 
pursuant to the new rule and two current rules relating to filing date 
adjustments and the continuing hardship exemption.

DATES: This rule is effective February 3, 2021.

FOR FURTHER INFORMATION CONTACT: Rosemary Filou, Chief Counsel; Monica 
Lilly, Senior Special Counsel; or Jane Patterson, Senior Counsel; EDGAR 
Business Office, at 202-551-3900, Securities and Exchange Commission, 
100 F Street NE, Washington, DC 20549.

SUPPLEMENTARY INFORMATION: The Commission is adopting new rule 17 CFR 
232.15 (``Rule 15'') under 17 CFR 232.10 through 232.903 (``Regulation 
S-T''), and new rule 17 CFR 200.30-19 (``Rule 30-19'') under 17 CFR 
200.1 through 200.800, the Commission's Rules of Organization and 
Program Management.

I. Introduction and Background

    Regulation S-T addresses, among other things, certain 
administrative issues related to EDGAR submissions.\1\ For example, 
Regulation S-T allows a filer to submit an amendment to, or a notice of 
withdrawal of, the filer's submission to remedy a submission issue 
(``filer corrective disclosure'').\2\ In recent years, as the volume of 
EDGAR submissions has grown, the Commission has increasingly confronted 
administrative issues that impact the Commission's ability to promote 
the reliability and integrity of EDGAR submissions and that are not 
easily addressed by existing rules or filer corrective disclosure. When 
these issues arise, they can create confusion for filers, investors, 
and other users of EDGAR.
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    \1\ See Administration of the Electronic Data Gathering, 
Analysis, and Retrieval System, Release No. 33-10821 (Aug. 21, 2020) 
[85 FR 58018 (Sep. 17, 2020)] (the ``Proposing Release''), at 58018. 
In 1993, the Commission adopted rules mandating that certain filings 
be made with the Commission electronically through the newly 
launched EDGAR system. See id.
    \2\ Regulation S-T anticipates that filers may address their own 
substantive, and in some cases, administrative, submission issues 
through filer corrective disclosure. See Proposing Release, supra 
footnote 1, at 58018.
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    To promote the reliability and integrity of EDGAR submissions and 
to provide transparency about our practices, the Commission proposed 
Rule 15 under Regulation S-T on August 21, 2020, to specify actions 
that the Commission may take to facilitate the resolution of 
administrative issues.\3\ Proposed Rule 15 provided that, in its 
administration of EDGAR, the Commission may take the following actions 
to promote the reliability and integrity of EDGAR submissions:
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    \3\ See Proposing Release, supra footnote 1.
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     Redact, remove, or prevent dissemination of personally 
identifiable information that if released may result in financial or 
personal harm to an individual (``Sensitive PII'');
     Prevent submissions that pose a cybersecurity threat;
     Correct system or Commission staff errors;
     Remove or prevent dissemination of submissions made under 
an incorrect EDGAR identifier;
     Prevent the ability to make submissions when there are 
disputes

[[Page 7962]]

over the authority to use EDGAR access codes;
     Prevent acceptance or dissemination of an attempted 
submission that it has reason to believe may be misleading or 
manipulative while evaluating the circumstances surrounding the 
submission, and allow acceptance or dissemination if its concerns are 
satisfactorily addressed;
     Prevent an unauthorized submission or otherwise remove a 
filer's access; and
     Remedy similar administrative issues relating to 
submissions.
Moreover, the proposed rule sets forth a process for the Commission to 
notify filers and other ``relevant persons'' (as defined below) of its 
actions under the rule as soon as reasonably practicable.
    We received several comment letters in response to the proposal.\4\ 
A few commenters were generally supportive of the proposed rule, but 
expressed concern that the Commission may redact information from a 
submission without first contacting the filer.\5\ These commenters 
requested that filers be notified prior to any Commission action under 
the proposed rule, if possible. These commenters also requested that 
the Commission always consider an issuer's vendor or supplier to be a 
relevant person when the Commission provides notice of its actions to a 
filer and any relevant person.
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    \4\ The comment letters on the Proposing Release (File No. S7-
11-20) are available at https://www.sec.gov/comments/s7-11-20/s71120.htm.
    \5\ See Comment Letters of XBRL US (Oct. 5, 2020) (``XBRL US 
Comment Letter I''); JT Foxx (Oct.12, 2020) (``JT Foxx Comment 
Letter''); Auto Connection Manassas VA (Oct. 13, 2020) (``Auto 
Connection Comment Letter'').
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    Another commenter was generally supportive of the proposed 
Commission action when a submission contains Sensitive PII.\6\ The 
commenter suggested that the Commission ``interpret the definition of 
Sensitive PII broadly.'' The commenter also suggested that the 
Commission provide that filers may initiate a request for redaction or 
removal of information from a submission containing Sensitive PII and 
that the Commission redact or remove such information if the filer 
demonstrates that the submission contains Sensitive PII.
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    \6\ See Comment Letter of Ropes & Gray LLP (Oct. 19, 2020) 
(``Ropes & Gray Comment Letter'').
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    After consideration of the comments received, we are adopting Rule 
15 substantially as proposed.\7\ The rule codifies and clarifies the 
existing approach the Commission may take to address administrative 
issues that arise in connection with EDGAR submissions. By adopting 
Rule 15, we believe there will be increased transparency for filers, 
investors, and other users of EDGAR about the actions the Commission 
may take to promote the reliability and integrity of EDGAR submissions 
and improved efficiency in the Commission's administration of EDGAR.
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    \7\ As discussed in more detail in Section II.A.6, we have 
modified 17 CFR 232.15(a)(6) (``Rule 15(a)(6)'') as proposed to 
clarify that the Commission may continue to prevent acceptance or 
dissemination of the submission if the Commission has reason to 
believe that an attempted submission may be misleading or 
manipulative and the Commission's concerns have not been 
satisfactorily addressed after evaluating the circumstances 
surrounding the attempted submission.
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    Rule 15 will not change filers' obligations under the Federal 
securities laws to ensure the accuracy and completeness of information 
in their EDGAR submissions. Moreover, in the vast majority of 
administrative and substantive EDGAR submission issues, filers will 
continue to address an error by submitting a filer corrective 
disclosure and nothing in Rule 15 will prevent a filer from continuing 
to do so.\8\ We intend to continue to rely upon filer corrective 
disclosure to remedy most submission errors.
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    \8\ See 17 CFR 232.15(c), which is being adopted as proposed 
(``[n]othing in this rule prevents a filer from addressing an error 
or mistake in the filer's submission by making a filer corrective 
disclosure''). We received no comments on this aspect of the 
proposal. See also, e.g., 17 CFR 232.103, 232.105, and 
232.501(a)(3).
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    Additionally, the Commission is adopting new Rule 30-19 to delegate 
authority to the Director of the Commission's EDGAR Business Office to 
take actions pursuant to the following rules under Regulation S-T: Rule 
15, 17 CFR 232.13(b) (``Rule 13(b)'') (relating to adjustment of filing 
dates), and 17 CFR 232.202 (``Rule 202'') (relating to the continuing 
hardship exemption).

II. Discussion of the Final Rules

A. Adoption of Rule 15

    Rule 15 specifies that, in its administration of EDGAR, the 
Commission may take actions to promote the reliability and integrity of 
EDGAR submissions. Below we discuss the types of actions the Commission 
may take pursuant to Rule 15 to achieve those objectives.
1. Sensitive Personally Identifiable Information
    We are adopting as proposed 17 CFR 232.15(a)(1) (``Rule 
15(a)(1)''), which specifies that the Commission may, with regard to 
submissions on its public website: (i) Redact submissions containing 
Sensitive PII; (ii) remove submissions containing Sensitive PII; and/or 
(iii) prevent dissemination of submissions containing this 
information.\9\ Pursuant to the rule, the Commission may take further 
steps to ensure that Sensitive PII does not reside in EDGAR and 
communicate as necessary with filers to facilitate submissions in which 
Sensitive PII is redacted.\10\ Whether the Commission removes, redacts, 
or prevents dissemination of the Sensitive PII in the submission will 
be based on when the Commission first becomes aware of the Sensitive 
PII.
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    \9\ Sensitive PII may comprise a single item of information (for 
example, a Social Security number) or a combination of two or more 
items (for example, a full name and financial, medical, criminal, or 
employment history). See Rule 15(a)(1).
    \10\ Although the Commission may take steps to ensure that 
Sensitive PII does not reside in EDGAR, the burden of the 
responsibility to redact such information from submissions continues 
to lie with the filer and not the Commission.
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    One commenter suggested that the Commission interpret the 
definition of Sensitive PII broadly to include additional categories of 
information that reflect modern expectations of privacy and physical 
and financial security risks.\11\ The commenter discussed the personal 
and financial harm that would result from the disclosure of such 
information. The commenter also noted the regulatory trends in favor of 
expanding the categories of information that are considered 
``sensitive'' or ``personal'' and facilitating safeguards for 
personally identifiable information generally.\12\
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    \11\ See Ropes & Gray Comment Letter (noting that the Commission 
release, Amendments to Forms and Schedules to Remove Provision of 
Certain Personally Identifiable Information, Release No. 33-10846 
(Apr. 25, 2018) [83 FR 22190 (May 14, 2018)] (``2018 PII Form 
Amendments Release''), contemplated the removal of Social Security 
numbers, foreign identity numbers, dates of birth, and places of 
birth from certain Commission forms and schedules, and that, in the 
commenter's view, the information referred to in the 2018 PII 
Amendments Release was the minimum of what should constitute 
Sensitive PII for purposes of Rule 15). See also Proposing Release, 
supra footnote 1, at 58019 (discussing the 2018 PII Form Amendments 
Release). The commenter requested that the Commission interpret 
Sensitive PII to include information such as bank account numbers 
and balance information, wire transfer instructions and related 
information (e.g., the sender or recipient's name, phone number, 
address, and bank name) and credit card numbers. The commenter also 
requested that Sensitive PII include, among other things, email 
addresses and mobile phone numbers, physical addresses, login 
information for any bank, trading or similar account, and 
information associated with an individual's digital asset account.
    \12\ See Ropes & Gray Comment Letter (discussing emerging 
privacy regimes such as the California Consumer Privacy Act and the 
General Data Protection Regulation in Europe). The commenter 
indicated that these regimes expressly consider email addresses to 
be a type of personally identifiable information and are often 
interpreted to cover other types of information such as mobile phone 
numbers.

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[[Page 7963]]

    The Commission has sought to reduce the risk that Sensitive PII 
included in EDGAR submissions may result in financial or personal harm 
to individuals, and will continue to do so.\13\ We believe that the 
description of Sensitive PII in Rule 15(a)(1) as proposed is broad 
enough to encompass the examples provided by the commenter in relevant 
circumstances and to provide the Commission with the flexibility to 
reduce the risk of financial or personal harm to individuals.\14\ We 
believe it is appropriate to retain flexibility in the description as 
the categories of what constitutes Sensitive PII continue to evolve in 
light of new technology and expectations of privacy.
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    \13\ See Proposing Release, supra footnote 1, at 58019.
    \14\ The description of Sensitive PII that the Commission is 
adopting in Rule 15 is generally consistent with the Privacy Act and 
other statements of the Commission. See Updated Disclosure 
Requirements and Summary Prospectus for Variable Annuity and 
Variable Life Insurance Contracts, Release No. 33-10765 (Mar. 11, 
2020) [85 FR 25964 (May 1, 2020)]; FAST Act Modernization and 
Simplification of Regulation S-K, Release No. 33-10618 (Mar. 20, 
2019) [84 FR 12674 (Apr. 2, 2019)]; Amendments to Forms and 
Schedules to Remove Provision of Certain Personally Identifiable 
Information, Release 33-10486 (Apr. 25, 2018) [83 FR 22190 (May 14, 
2018)].
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    The same commenter also suggested that the Commission provide that 
filers may initiate a request for redaction or removal of information 
from a submission containing Sensitive PII, including from any 
submissions made prior to the effectiveness of the rule. The commenter 
stated that the inclusion of Sensitive PII in historical EDGAR 
submissions (whether inadvertent or intentional) cannot be 
retroactively corrected by making an additional filer corrective 
disclosure. Moreover, the commenter suggested that the rule require the 
Commission to redact or remove such information if the filer 
demonstrates that the submission contains Sensitive PII.\15\
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    \15\ See Ropes & Gray Comment Letter (stating that the 
Commission should be required to remove or redact Sensitive PII if a 
filer demonstrates that the Sensitive PII, if released or allowed to 
remain publicly available, may result in financial or personal harm 
to an individual).
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    The Commission currently receives requests from filers for 
redaction or removal of information from submissions containing 
Sensitive PII, and we anticipate continuing to receive and evaluate 
such requests. We do not believe, however, that the Commission should 
be required to redact or remove Sensitive PII each time a filer 
requests it. We believe it is appropriate to retain the flexibility to 
consider the accuracy of EDGAR information publicly disseminated on the 
Commission's website, the nature of and circumstances surrounding the 
Sensitive PII at issue, and the Commission's administrative and 
technical capacity to address the request. If a filer demonstrates that 
a submission contains Sensitive PII, the Commission will initially work 
with the filer to facilitate submission of a version in which the 
Sensitive PII is redacted. The Commission will then exercise its 
discretion to determine whether the redacted submission would be 
adequate or whether additional steps need to be taken pursuant to 17 
CFR 232.15(a)(8) (``Rule 15(a)(8)'') (as described below), including 
potentially removing information from the Commission's website.\16\ In 
any event, regardless of whether there is a request from a filer, the 
Commission may act to remove, redact, or prevent dissemination of 
Sensitive PII in a submission pursuant to Rule 15(a)(1) without first 
notifying the filer or the individual who could experience financial or 
personal harm if such information was released on EDGAR. The 
Commission's interest in avoiding a situation in which such information 
is used to create financial or personal harm may outweigh the need to 
give notice prior to Commission action, depending on the 
circumstances.\17\ We are therefore adopting this provision of the rule 
as proposed.
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    \16\ See Section II.A.8.
    \17\ After taking action pursuant to Rule 15(a), the Commission 
will provide notice to the filer and any relevant persons as soon as 
reasonably practicable. See 17 CFR 232.15(b) (``Rule 15(b)'').
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2. Cybersecurity Threats
    We are adopting as proposed 17 CFR 232.15(a)(2), which specifies 
that the Commission may prevent the submission to EDGAR of any 
submission that poses a cybersecurity threat, including but not limited 
to, those containing any malware or virus, and communicate as necessary 
with the filer regarding the submission. As discussed in the Proposing 
Release, Commission action to address cybersecurity threats in EDGAR 
submissions will benefit all EDGAR users and promote the reliability 
and integrity of EDGAR submissions.\18\ We received no comments on this 
aspect of the proposal.
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    \18\ See Proposing Release, supra footnote 1, at 58019.
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3. System and Commission Staff Errors
    We are adopting as proposed 17 CFR 232.15(a)(3), which specifies 
that if the Commission determines that a submission has not been 
processed by EDGAR, has been processed incorrectly by EDGAR, or 
contains an error attributable to the Commission staff, the Commission 
may correct and/or prevent dissemination of the submission and 
communicate as necessary with the filer to facilitate filer corrective 
disclosure. In each of these circumstances, the Commission typically 
first attempts to correct the error without unduly burdening 
filers.\19\ When necessary, the Commission may work proactively with 
filers to accomplish filer corrective disclosure.\20\ We received no 
comments on this aspect of the proposal.
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    \19\ See, e.g., Proposing Release, supra footnote 1, at 58019 
(discussing Commission practices of correcting system and Commission 
staff errors without first communicating with the filer).
    \20\ 17 CFR 232.103 (Rule 103 of Regulation S-T) addresses 
concerns that filers may have about liability when issues arise that 
are not the fault of the filer. Moreover, Rule 13(b) of Regulation 
S-T makes clear that if a filer in good faith attempts to timely 
file but the filing is delayed due to technical difficulties beyond 
the filer's control, the filer may request an adjustment of the 
filing date of the document.
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4. Incorrect EDGAR Identifiers
    We are adopting as proposed 17 CFR 232.15(a)(4), which specifies 
that the Commission may remove and/or prevent public dissemination of a 
submission made under an incorrect EDGAR unique identifying number \21\ 
and communicate as necessary with the filer and others to facilitate a 
filer corrective disclosure. Sometimes, filers make submissions that 
are not associated with the correct unique identifying number. These 
errors can create confusion for filers, investors, and other EDGAR 
users. The Commission may remove the erroneous submission when such 
errors cannot be resolved by filer corrective disclosure. We received 
no comments on this aspect of the proposal.
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    \21\ EDGAR provides each entity a unique identifying number, and 
submissions made by an entity are associated with that number. If an 
individual who has access to more than one unique identifying number 
(for example, a filing agent) were to make a submission for one 
entity using another entity's number, it erroneously would appear to 
EDGAR users that the submission is a filing by the unique 
identifying number holder. See 17 CFR 232.10(b).
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5. EDGAR Access Code Disputes
    We are adopting as proposed 17 CFR 232.15(a)(5), which specifies 
that the Commission may prevent a filer's ability to make submissions 
if the Commission determines that a dispute exists as to which persons 
have the authority to make submissions on behalf of the filer, until 
the dispute is resolved by the disputing parties or by a court of 
competent jurisdiction. These disputes may arise, for example, when two 
or more parties each claim control of a filing entity and each demand 
access to

[[Page 7964]]

the entity's EDGAR account. Resolution of such disputes often turns on 
matters of state corporation law or other factors outside the scope of 
the Federal securities laws. Under existing practice, the Commission 
staff has asked the disputing parties to either resolve the dispute 
themselves or have the matter adjudicated under the relevant state 
corporation law.\22\ The final rule affirms the Commission's ability to 
take action to ensure that only authorized persons make submissions on 
behalf of the filer. We received no comments on this aspect of the 
proposal.
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    \22\ When a dispute arises between parties, each of whom claims 
to be the legitimate corporate representative--which may occur after 
a leadership change at a filing entity--the Commission staff 
typically prevents future submissions until the parties can reach an 
agreement, or a party is able to provide a court order designating 
the appropriate corporate representative.
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6. Potential Manipulation
    We are adopting a modification to proposed Rule 15(a)(6). The 
proposed rule specified that if the Commission has reason to believe 
that a submission or an attempted submission may be misleading or 
manipulative, the Commission may prevent acceptance or dissemination of 
the submission while evaluating the circumstances surrounding the 
submission.\23\ The proposed rule also specified that the Commission 
may allow acceptance or dissemination if its concerns are 
satisfactorily addressed.\24\
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    \23\ See Proposed Rule 15(a)(6). See also Proposing Release, 
supra footnote 1, at 58020 (discussing examples of submissions or 
attempted submissions that may be misleading or manipulative).
    \24\ See Proposed Rule 15(a)(6).
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    After further consideration, we are slightly modifying proposed 
Rule 15(a)(6) to clarify that the Commission may continue to prevent 
acceptance or dissemination after it has evaluated the circumstances 
surrounding the submission if its concerns have not been satisfactorily 
addressed. If the Commission allows acceptance or dissemination of the 
submission, the initial or initially attempted filing date will be 
assigned to the submission, assuming the submission does not implicate 
other provisions of Rule 15. We received no comments on this aspect of 
the proposal.
7. Unauthorized Submissions
    We are adopting as proposed 17 CFR 232.15(a)(7), which specifies 
that the Commission may prevent the use of EDGAR access codes if it has 
reason to believe that there has been an unauthorized submission or an 
attempt to make an unauthorized submission on EDGAR. Under existing 
practice, when questions arise as to whether a particular submission or 
attempted submission was authorized, the Commission seeks to better 
understand the circumstances surrounding the submission and evaluate 
what steps, if any, to take in response. Rule 15 specifies that, in 
such situations, the Commission may prevent any further submissions by 
the filer or otherwise remove the filer's access to EDGAR. If its 
concerns are satisfactorily addressed, the Commission will allow the 
use of EDGAR access codes and permit the submission to proceed, 
assuming the submission does not implicate other provisions of Rule 15. 
We received no comments on this aspect of the proposal.
8. Additional Remedial Steps
    The Commission cannot anticipate every administrative submission 
issue that may arise in the future. Thus, we are adopting as proposed 
Rule 15(a)(8), which specifies the circumstances in which the 
Commission may take further appropriate steps to address a matter and 
communicate as necessary with the filer regarding a submission. 
Specifically, under the rule, the Commission may take such further 
steps if the Commission has reason to believe that, to promote the 
reliability and integrity of EDGAR submissions, it must address a 
submission issue that cannot be addressed solely by filer corrective 
disclosure or by the actions set forth in paragraphs (a)(1) through (7) 
of Rule 15. We received no comments on this aspect of the proposal.
9. Notice
    Finally, we are adopting as proposed Rule 15(b), which provides 
that the Commission may act without advance notice to filers or any 
other person. Specifically, Rule 15(b) provides a method for the 
Commission to provide notice of its actions under the rule to a filer 
and any person the Commission determines is relevant to the matter 
(``relevant person'') as soon as practicable after those actions are 
taken. In response to commenters, we are clarifying that the term 
``relevant person'' encompasses, in appropriate circumstances, a 
filer's vendor or supplier that made the related submission on behalf 
of the filer.\25\ In addition, relevant persons could include, but are 
not limited to, parties other than the filer that are involved in code 
disputes and parties other than the filer that are involved in 
submissions made in another entity's account. Rule 15(b) provides that 
the Commission will send written notice and a brief factual statement 
of the basis for the action by electronic mail to the email address on 
record in the filer's EDGAR account, and the email address of any 
relevant persons. The Commission may also send, if necessary, the 
notice and factual statement by registered, certified, or express mail 
to the physical address on record in the filer's EDGAR account and the 
physical address of any relevant persons. The notice provides the filer 
and relevant persons an opportunity to bring pertinent information to 
the Commission's attention and will help facilitate prompt resolution 
of submission issues.
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    \25\ See XBRL US Comment Letter I; JT Foxx Comment Letter; Auto 
Connection Comment Letter (requesting that the Commission always 
consider an issuer's vendor or supplier to be a relevant person when 
the Commission provides notice of its actions to a filer and any 
relevant person).
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    Three commenters were generally supportive of the proposed rule but 
expressed concern that the Commission may redact information from a 
submission without first contacting the filer.\26\ The commenters 
requested that filers be notified prior to any Commission action in the 
proposed rule, if possible. The commenters recognized, however, that 
there may be situations where advance notification would not be 
feasible and, in such situations, they agreed with the Commission's 
proposal to notify the filer and relevant persons as soon as possible 
after the action is taken.
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    \26\ Id.
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    As discussed in the Proposing Release, the Commission typically 
communicates and works with filers to address submission issues, and 
the Commission anticipates that it generally will continue to work with 
filers in advance of taking action under the rule.\27\ At the same 
time, the final rule allows the Commission the necessary flexibility to 
take action promptly to avoid harm to investors and other EDGAR users 
who depend upon the accuracy of the information disseminated by 
EDGAR.\28\ For example, as discussed above, the Commission has sought 
to reduce the risk that Sensitive PII included in EDGAR submissions may 
result in financial or personal harm to individuals.\29\ Immediate 
Commission action may also be necessary to avoid potential threats to 
EDGAR, to prevent the dissemination of unauthorized or potentially 
false or misleading submissions, or to prevent the improper

[[Page 7965]]

use of filers' EDGAR accounts.\30\ In addition, we are mindful that 
administrative actions under the proposed rule should not unduly hinder 
or delay the EDGAR submission process.\31\ We believe that Rule 15, 
including its notice provision, balances the need to reduce the risk of 
financial or personal harm to individuals from the disclosure of 
Sensitive PII, address potential threats, and other circumstances as 
described above with the need to timely disseminate EDGAR submissions. 
We are therefore adopting this provision of the rule as proposed.
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    \27\ See Proposing Release, supra footnote 1, at 58020.
    \28\ Id.
    \29\ See Section II.A.1 and Proposing Release, supra footnote 1, 
at 58019.
    \30\ See Proposing Release, supra footnote 1, at 58020.
    \31\ Id.
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B. Amendment to the Delegations of the Authority of the Commission

    The Commission is adopting new Rule 30-19 of the Rules of 
Organization and Program Management to delegate authority to the 
Director of the EDGAR Business Office to take action under Rule 15 and 
two other rules in Regulation S-T: (i) Rule 13(b), to adjust the filing 
date of an electronic filing; and (ii) Rule 202, to set the terms of, 
and grant or deny as appropriate, continuing hardship exemptions from 
the electronic submission requirements.\32\ This delegated authority is 
designed to conserve Commission resources by permitting Commission 
staff to carry out the Commission's efficient administration of EDGAR. 
The Commission staff may nevertheless submit matters to the Commission 
for consideration, as it deems appropriate.
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    \32\ The functions in new Rule 30-19 are performed by the 
Director of the EDGAR Business Office or under the Director's 
direction by such other person or persons as may be designated from 
time to time by the Chairman of the Commission. Functions related to 
filing date adjustments pursuant to Rule 13(b) and continuing 
hardship exemptions pursuant to Rule 202 would be performed after 
consultation with the division or office with primary regulatory 
oversight for the relevant filing. See new Rule 30-19.
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III. Economic Analysis

    We have carefully considered the economic effects of final Rule 15 
under Regulation S-T.\33\ The final rule increases transparency for 
filers, investors, and other users of EDGAR by specifying the actions 
the Commission may take to resolve certain administrative issues. 
Increased transparency about Commission actions will create benefits 
for both filers and users, because filers and users will know the types 
of actions they can expect the Commission to take to promote the 
reliability and integrity of EDGAR submissions. However, we anticipate 
these benefits will be limited as Rule 15 largely codifies actions that 
the Commission currently takes to promote the reliability and integrity 
of EDGAR submissions. For the same reason, we do not expect filers to 
incur additional costs. Further, we anticipate that the final rule will 
marginally improve efficiency, but will not have a significant effect 
on competition or capital formation. Because we generally cannot 
predict the need for or extent of corrective actions the final rule 
will address, we cannot quantify the anticipated economic effects of 
future corrective actions. Furthermore, the Commission received no 
comments responding to the Proposing Release's request for comments on 
the economic analysis and any relevant empirical data, estimation 
methodologies, or factual support. Therefore, the analysis that follows 
provides primarily a qualitative assessment of the likely economic 
effects.
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    \33\ Section 2(b) of the Securities Act of 1933 (``Securities 
Act''), Section 3(f) of the Securities Exchange Act of 1934 
(``Exchange Act''), and Section 2(c) of the Investment Company Act 
of 1940 (``Investment Company Act'') require us, when engaging in 
rulemaking that requires us to consider or determine whether an 
action is necessary or appropriate in (or, with respect to the 
Investment Company Act, consistent with) the public interest, to 
consider, in addition to the protection of investors, whether the 
action will promote efficiency, competition, and capital formation. 
In addition, Section 23(a)(2) of the Exchange Act requires the 
Commission to consider the effects on competition of any rules the 
Commission adopts under the Exchange Act and prohibits the 
Commission from adopting any rule that would impose a burden on 
competition not necessary or appropriate in furtherance of the 
purposes of the Exchange Act.
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A. Economic Baseline

    The Commission's current processes and procedures for resolving the 
enumerated administrative issues listed in the final rule and discussed 
above serve as the baseline against which we assess the final rule. 
This section discusses, as it relates to this rulemaking, filers' 
current usage of EDGAR and the Commission's processes for administering 
EDGAR.
    Because of the variety of administrative issues that may arise in 
connection with EDGAR submissions, the Commission has developed 
procedures for identifying and addressing the issues described above, 
although the Commission has not published those procedures. Where 
possible, the Commission currently communicates with relevant filers to 
facilitate filer corrective disclosure to address problematic 
submissions. While filer corrective disclosure addresses the majority 
of known EDGAR submission issues, there are circumstances in which 
working with a filer does not address problematic submissions, such as 
when the filer is uncooperative or the Commission cannot validate a 
filer's authorization to make submissions. Additionally, in limited 
cases, the Commission has responded promptly to submission issues 
without first consulting relevant filers in order to avoid harm to 
investors and other EDGAR users who depend upon the accuracy of the 
information disseminated by EDGAR. For these submissions, the 
Commission acts expediently to minimize the time the public and the 
Commission are exposed to such harm. While the Commission typically 
notifies these filers of its actions afterwards, some filers may not 
know specifically why the Commission took action or the nature of the 
issue with the submission.

B. Costs and Benefits

    The final rule specifies the actions the Commission may take with 
respect to specific administrative issues that impact the Commission's 
ability to promote the reliability and integrity of EDGAR submissions. 
We believe the final rule will provide increased transparency about the 
Commission's administrative processes, which in turn may benefit filers 
and improve the Commission's efficiency in administering EDGAR. We 
believe, however, that Rule 15 would have limited economic effects 
because the rule largely codifies actions that the Commission may 
already take.
    More transparency into how the Commission administers EDGAR may 
benefit filers in two ways. First, by specifying the types of issues 
for which the Commission may take action, the final rule could 
encourage filers to take additional actions to prevent these issues if 
they believe the benefits exceed the costs of preventative actions. 
Second, when the Commission must act to address a problematic 
submission prior to notifying a filer or when an issue cannot be 
addressed solely by a filer corrective disclosure, the final rule's 
formal notification requirement ensures that filers will receive timely 
notification of Commission action. To the extent that this requirement 
results in the Commission notifying filers of issues that they can 
correct, such as incorrect EDGAR identifiers, EDGAR access code 
disputes, or potentially misleading filings, filers may be able to 
benefit from rectifying issues sooner than they would have prior to the 
rule.\34\
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    \34\ In addition to filers, the Commission may work with EDGAR 
filing agents, counsel, and other entities to correct administrative 
issues. As with filers, these entities may incur lower costs if they 
are notified and can rectify issues with EDGAR submissions sooner.

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[[Page 7966]]

    Because the final rule informs filers of possible actions the 
Commission may take and the Commission's process to promote the 
reliability and integrity of EDGAR submissions, the final rule will 
improve the efficiency of administering EDGAR. This benefit is likely 
to be limited because the Commission will continue to resolve most 
issues by contacting filers to facilitate filer corrective disclosure. 
Since filers may submit fewer filings with errors and the Commission 
and filers will be able to more quickly correct errors, the final rule 
could lead to more timely and accurate information in EDGAR, benefiting 
investors, research analysts, data aggregators, and other financial 
professionals.\35\ Moreover, since the Commission, as the administrator 
of EDGAR, already takes corrective actions to promote the reliability 
and integrity of EDGAR submissions, we do not expect filers to incur 
additional costs in connection with these improvements. The Commission 
generally cannot predict the need for or the extent of corrective 
actions, so we cannot quantify the informational efficiency benefits 
from future corrective actions.
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    \35\ See generally Michael S. Drake, Darren T. Roulstone, and 
Jacob R. Thornock, The Determinants and Consequences of Information 
Acquisition via EDGAR, 32 Contemporary Accounting Research 3 (2016) 
(Most EDGAR users access the database a few times per quarter around 
corporate events such as restatements, earnings announcements, and 
acquisition announcements. This activity is related to, but distinct 
from, financial press articles. A small subset of users access EDGAR 
daily for multiple filings.); Jonathan L. Rogers, Douglas J. 
Skinner, and Sarah L. C. Zechman, Run EDGAR Run: SEC Dissemination 
in a High-Frequency World, Chicago Booth Research Paper No. 14-36 
(Feb. 17, 2017) (finding that for a sample of Form 4 filings, there 
was an economically significant advantage to accessing data because 
of then-existing lags between the Commission's EDGAR website and the 
public dissemination feed); Brian Gibbons, Peter Iliev, and Jonathan 
Kalodimos, Analyst Information Acquisition via EDGAR, Working Paper 
(Nov. 15, 2019) (finding that information acquisition from EDGAR is 
associated with smaller analyst forecast errors); Peter Iliev, 
Jonathan Kalodimos, and Michelle Lowry, Investors' Attention to 
Corporate Governance, 9th Miami Behavioral Finance Conference 2018 
(Jul. 16, 2020) (using EDGAR log files, finding that investors 
conduct significant research into corporate governance, particularly 
for large firms, firms with low managerial entrenchment, and those 
with meetings outside of the proxy season); Huaizhi Chen, Lauren 
Cohen, Umit Gurun, Dong Lou, and Christopher J. Malloy, IQ from IP: 
Simplifying Search in Portfolio Choice, NBER Working Paper No. 24801 
(Apr. 20, 2019) (using EDGAR log data, shows institutional investors 
tracked management teams and insider-trading filings of firms); and 
Zhongling Qin, Measuring Attention: The Case of Amendments to 10K 
Annual Reports, Working Paper (Nov. 15, 2019) (showing consistently 
higher trading volume once there are enough attentive readers of 10-
K/A filings, as defined by whether the readers read the original 10-
K filings, though consistent with gradual diffusion of information). 
But see Stefano DellaVigna and Joshua M. Pollet, Investor 
Inattention and Friday Earnings Announcements, 64 J. of Fin. 2 (Mar. 
13, 2009) (finding less immediate response for Friday announcements 
than for announcements on other days, consistent with investor 
inattention); and Tim Loughran and Bill McDonald, The Use of EDGAR 
Filings by Investors, J. of Behavioral Fin. Forthcoming (Dec. 4, 
2016) (showing that the average publicly traded firm has its annual 
report accessed only 28.4 times on the day of and day after the 
filing, though other filings such as initial public offering filings 
are more quickly consumed).
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    To the extent that the final rule reduces the number of 
cybersecurity threats or reduces the administrative frictions in 
preventing cybersecurity threats, there may be benefits to the users of 
EDGAR.\36\ In particular, users, including investors, analysts, asset 
managers, and data collection companies, may incur fewer costs 
associated with cleaning or repairing systems and recovering data.\37\ 
Furthermore, individuals, investors, companies, and asset managers, 
among others, may benefit from the prevention of cybersecurity attacks 
that disrupt the dissemination of filings through EDGAR or obtain 
confidential or protected financial information on the Commission's or 
users' systems.
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    \36\ Under current practice, the Commission immediately prevents 
submissions to EDGAR of any submission that poses cybersecurity 
risks once the Commission identifies them. Furthermore, the 
Commission has already promulgated a rule addressing the removal of 
submissions or parts of submissions that contain executable code. 17 
CFR 232.106.
    \37\ See The Council of Econ. Advisers, The Cost of Malicious 
Cyber Activity to the U.S. Economy (Feb. 2018). Available at: 
https://www.whitehouse.gov/wp-content/uploads/2018/03/The-Cost-of-Malicious-Cyber-Activity-to-the-U.S.-Economy.pdf (estimating that in 
2016, malicious cyber activity cost the U.S. economy between $57 and 
$106 billion through denial of service attacks, disruption of 
business activity, or destruction or theft of proprietary and 
strategic information).
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    Lastly, because EDGAR submissions generally do not require 
Sensitive PII,\38\ and current Commission practices seek to identify 
and redact Sensitive PII, we do not anticipate that the final rule 
specifying that the Commission may redact, remove and/or not 
disseminate EDGAR submissions containing Sensitive PII will have a 
substantial economic effect.
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    \38\ In 2018, the Commission amended forms and schedules to 
eliminate requirements to provide certain personally identifiable 
information. See PII Form Amendments Release, supra footnote 11. 
Also, in the EDGAR Filer Manual, the Commission advises against 
including social security numbers in filings submitted to the 
Commission. See https://www.sec.gov/info/edgar/edgarfm-vol2-v47.pdf. 
Some forms may require Sensitive PII in certain circumstances. For 
example, Form 20-F requires dates of birth of a company's directors 
and senior management if required to be reported in the home country 
or otherwise publicly disclosed by the company. Additionally, Forms 
MA and Funding Portal require IRS Tax numbers if CRD numbers are 
unavailable. IRS Tax numbers also are required on Form SBSE if CRD 
numbers, IARD numbers, and foreign business numbers are unavailable.
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IV. Administrative Law Matters

    The Commission finds, in accordance with section 553(b)(3)(A) of 
the Administrative Procedure Act (``APA''), that these amendments 
relate solely to agency organization, procedure, or practice and do not 
constitute a substantive rule. They are therefore not subject to the 
provisions of the APA requiring notice of rulemaking, opportunity for 
public comment, and advance publication of the amendments prior to 
their effective date. These changes are effective on February 3, 2021. 
Additionally, the Regulatory Flexibility Act of 1980 \39\ therefore 
does not apply. Nevertheless, we previously determined that it would be 
useful to publish the proposed amendments for notice and comment before 
adoption. The Commission has considered all comments received. Because 
these amendments relate to ``agency organization, procedure or practice 
that does not substantially affect the rights or obligations of non-
agency parties,'' they are not subject to Small Business Regulatory 
Enforcement Fairness Act of 1996.\40\ These rules do not contain any 
collection of information requirements as defined by the Paperwork 
Reduction Act of 1995.\41\
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    \39\ 5 U.S.C. 601 et seq.
    \40\ 5 U.S.C. 801 et seq.
    \41\ 44 U.S.C. 3501 et seq.
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V. Statutory Basis and Text of Rule Amendments

    The amendments to Regulation S-T--General Rules and Regulations for 
Electronic Filings are adopted pursuant to statutory authority in 
Sections 6, 7, 8, 10, and 19(a) of the Securities Act,\42\ Sections 3, 
12, 13, 14, 15, 15B, 23, and 35A of the Exchange Act,\43\ Section 319 
of the Trust Indenture Act of 1939,\44\ and Sections 8, 30, 31, and 38 
of the Investment Company Act.\45\ The amendments to the Commission's 
Rules of Organization and Program Management are adopted pursuant to 
statutory authority granted to the Commission, including Section 19 of 
the Securities Act of 1933, 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 of 1940, 15 U.S.C. 80a-37; Section 211 of the 
Investment Advisers Act of 1940, 15 U.S.C. 80b-11; and

[[Page 7967]]

Section 3 of the Sarbanes-Oxley Act of 2002, 15 U.S.C. 7202.
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    \42\ 15 U.S.C. 77f, 77g, 77h, 77j, and 77s(a).
    \43\ 15 U.S.C. 78c, 78d-1, 78d-2, 78l, 78m, 78n, 78o, 78o-4, 
78w, and 78ll.
    \44\ 15 U.S.C. 77sss.
    \45\ 15 U.S.C. 80a-8, 80a-29, 80a-30, and 80a-37.
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List of Subjects

17 CFR Part 200

    Administrative practice and procedure, Authority delegations 
(Government agencies), Organization and functions (Government 
agencies).

17 CFR Part 232

    Incorporation by reference, Reporting and recordkeeping 
requirements, Securities.

    For the reasons discussed above, we are amending 17 CFR chapter II 
as follows:

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

Subpart A-Organization and Program Management

0
1. The general authority citation for part 200, subpart A, continues to 
read 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. Add Sec.  200.30-19 to read as follows:


Sec.  200.30-19   Delegation of authority to Director of the EDGAR 
Business Office.

    Pursuant to the provisions of Public Law 100-181, 101 Stat. 1254, 
1255 (15 U.S.C. 78d-1, 78d-2), the Securities and Exchange Commission 
hereby delegates, until the Commission orders otherwise, the following 
functions to the Director of the EDGAR Business Office, to be performed 
by the Director or under the Director's direction by such other person 
or persons as may be designated from time to time by the Chairman of 
the Commission:
    (a) With respect 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 
Trust Indenture Act of 1939 (15 U.S.C. 77aaa et seq.), the Investment 
Company Act of 1940 (15 U.S.C. 80a-1 et seq.) and part 232 of this 
chapter (Regulation S-T), to grant or deny a request submitted pursuant 
to Sec.  232.13(b) of this chapter to adjust the filing date of an 
electronic filing, after consultation with the division or office with 
primary regulatory oversight for the relevant filing.
    (b) With respect 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 
Trust Indenture Act of 1939 (15 U.S.C. 77aaa et seq.), the Investment 
Company Act of 1940 (15 U.S.C. 80a-1 et seq.), and part 232 of this 
chapter (Regulation S-T) to set the terms of, and grant or deny as 
appropriate, continuing hardship exemptions pursuant to Sec.  232.202 
of this chapter from the electronic submission requirements of 
Regulation S-T, after consultation with the division or office with 
primary regulatory oversight for the relevant filing.
    (c) With respect 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 
Trust Indenture Act of 1939 (15 U.S.C. 77aaa et seq.), the Investment 
Company Act of 1940 (15 U.S.C. 80a-1 et seq.), and part 232 of this 
chapter (Regulation S-T) to take actions pursuant to Sec.  232.15 of 
this chapter to promote the reliability and integrity of submissions 
made through the Electronic Data Gathering, Analysis, and Retrieval 
system (EDGAR).

PART 232--REGULATION S-T--GENERAL RULES AND REGULATIONS FOR 
ELECTRONIC FILINGS

0
3. The general authority citation for part 232 continues to read as 
follows:

    Authority:  15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3, 
77sss(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll, 80a-6(c), 
80a-8, 80a-29, 80a-30, 80a-37, 7201 et seq.; and 18 U.S.C. 1350, 
unless otherwise noted.
* * * * *


0
4. Add Sec.  232.15 to read as follows:


Sec.  232.15   Administration of EDGAR.

    (a) In its administration of EDGAR, the Commission may take the 
following actions to promote the reliability and integrity of 
submissions made through EDGAR.
    (1) If the Commission determines that a submission contains 
personally identifiable information that if released may result in 
financial or personal harm to an individual, which may comprise a 
single item of information or a combination of two or more items, the 
Commission may redact such information from the submission, prevent 
dissemination of the submission, and/or remove the submission from the 
Commission's public website, and may communicate as necessary with the 
filer to facilitate submission of a version in which such information 
is redacted;
    (2) The Commission may prevent the submission to EDGAR of any 
submission that poses a cybersecurity threat, including but not limited 
to, submissions containing any malware or virus, and may communicate as 
necessary with the filer regarding the submission;
    (3) If the Commission determines that a submission has not been 
processed by EDGAR, or has been processed incorrectly by EDGAR, or 
contains an error attributable to the Commission staff, the Commission 
may correct and/or prevent public dissemination of the submission and 
may communicate with the filer as necessary to facilitate the filer's 
submission of an amendment to, or a notice of withdrawal of, the 
filer's submission (a ``filer corrective disclosure'');
    (4) If the Commission determines that a submission is made under an 
incorrect EDGAR unique identifying number, the Commission may remove 
and/or prevent public dissemination of the submission and may 
communicate with the filer as necessary to facilitate a filer 
corrective disclosure;
    (5) If the Commission determines that a dispute exists regarding 
the authority to make submissions on behalf of a filer, the Commission 
may prevent a filer's ability to make submissions until the dispute is 
resolved by the disputing parties or by a court of competent 
jurisdiction;
    (6) If the Commission has reason to believe that an attempted 
submission may be misleading or manipulative, the Commission may 
prevent acceptance or dissemination of the submission unless, after 
evaluating the circumstances surrounding the submission, the 
Commission's concerns are satisfactorily addressed;
    (7) If the Commission has reason to believe that a filer has made 
an unauthorized submission or attempted to make an unauthorized 
submission, the Commission may prevent any further submissions by the 
filer or otherwise remove the filer's access to EDGAR; and
    (8) If the Commission otherwise has reason to believe that, to 
promote the reliability and integrity of submissions made through 
EDGAR, it must address a submission issue that cannot be addressed 
solely by filer corrective disclosure or by the actions set forth in 
paragraphs (a)(1) through (7) of this section, the Commission may take 
such further steps as are appropriate to address the matter and 
communicate as necessary with the filer regarding the submission.
    (b) The Commission may act under paragraph (a) of this section 
without providing advance notice to the filer or any other person. As 
soon as reasonably practicable after taking action under paragraph (a) 
of this section, the Commission will provide written notice and a brief 
factual statement of the basis for the action to the filer and any 
other person the Commission determines is

[[Page 7968]]

relevant to the matter (``relevant persons''). The Commission will send 
the notice and factual statement by electronic mail to the email 
address on record in the filer's EDGAR account, and to the email 
address of any relevant persons. The Commission may also send, if 
necessary, the notice and factual statement by registered, certified, 
or express mail to the physical address on record in the filer's EDGAR 
account and the physical address of any relevant persons.
    (c) Nothing in this section prevents a filer from addressing an 
error or mistake in the filer's submission by making a filer corrective 
disclosure.

    By the Commission.

    Dated: December 11, 2020.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2020-28273 Filed 2-2-21; 8:45 am]
BILLING CODE 8011-01-P