{"database": "openregs", "table": "cfr_sections", "is_view": false, "human_description_en": "where part_number = 202 sorted by section_id", "rows": [["10:10:3.0.1.1.2.2.1.1", 10, "Energy", "II", "A", "202", "PART 202\u2014PRODUCTION OR DISCLOSURE OF MATERIAL OR INFORMATION", "B", "Subpart B\u2014Production or Disclosure in Response to Subpoenas or Demands of Courts or Other Authorities", "", "\u00a7 202.21 Purpose and scope.", "DOE", "", "", "", "(a) This subpart sets forth the procedures to be followed when a subpoena, order, or other demand (hereinafter referred to as a \u201cdemand\u201d) of a court or other authority is issued for the production or disclosure of (1) any material contained in the files of the Department of Energy (DOE), (2) any information relating to material contained in the files of the DOE, or (3) any information or material acquired by any person while such person was an employee of the DOE as a part of the performance of his official duties or because of his official status.\n\n(b) For purposes of this subpart, the term \u201cEmployee of the DOE\u201d includes all officers and employees of the United States appointed by, or subject to the supervision, jurisdiction, or control of, the Administrator of DOE."], ["10:10:3.0.1.1.2.2.1.2", 10, "Energy", "II", "A", "202", "PART 202\u2014PRODUCTION OR DISCLOSURE OF MATERIAL OR INFORMATION", "B", "Subpart B\u2014Production or Disclosure in Response to Subpoenas or Demands of Courts or Other Authorities", "", "\u00a7 202.22 Production or disclosure prohibited unless approved by appropriate DOE official.", "DOE", "", "", "", "No employee or former employee of the DOE shall, in response to a demand of a court or other authority, produce any material contained in the file of the DOE or disclose any information relating to material contained in the files of the DOE, or disclose any information or produce any material acquired as part of the performance of his official duties or because of his official status without prior approval of the General Counsel of DOE."], ["10:10:3.0.1.1.2.2.1.3", 10, "Energy", "II", "A", "202", "PART 202\u2014PRODUCTION OR DISCLOSURE OF MATERIAL OR INFORMATION", "B", "Subpart B\u2014Production or Disclosure in Response to Subpoenas or Demands of Courts or Other Authorities", "", "\u00a7 202.23 Procedure in the event of a demand for production or disclosure.", "DOE", "", "", "", "(a) Whenever a demand is made upon an employee or former employee of the DOE for the production of material or the disclosure of information described in \u00a7 202.21(a), he shall immediately notify the Regional Counsel for the region where the issuing authority is located. The Regional Counsel shall immediately request instructions from the General Counsel of DOE.\n\n(b) If oral testimony is sought by the demand, an affidavit, or, if that is not feasible, a statement by the party seeking the testimony or his attorney, setting forth a summary of the testimony desired, must be furnished for submission by the Regional Counsel to the General Counsel."], ["10:10:3.0.1.1.2.2.1.4", 10, "Energy", "II", "A", "202", "PART 202\u2014PRODUCTION OR DISCLOSURE OF MATERIAL OR INFORMATION", "B", "Subpart B\u2014Production or Disclosure in Response to Subpoenas or Demands of Courts or Other Authorities", "", "\u00a7 202.24 Final action by the appropriate DOE official.", "DOE", "", "", "", "If the General Counsel approves a demand for the production of material or disclosure of information, he shall so notify the Regional Counsel and such other persons as circumstances may warrant."], ["10:10:3.0.1.1.2.2.1.5", 10, "Energy", "II", "A", "202", "PART 202\u2014PRODUCTION OR DISCLOSURE OF MATERIAL OR INFORMATION", "B", "Subpart B\u2014Production or Disclosure in Response to Subpoenas or Demands of Courts or Other Authorities", "", "\u00a7 202.25 Procedure where a decision concerning a demand is not made prior to the time a response to the demand is required.", "DOE", "", "", "", "If response to the demand is required before the instructions from the General Counsel are received, a U.S. attorney or DOE attorney designated for the purpose shall appear with the employee or former employee of the DOE upon whom the demand has been made, and shall furnish the court or other authority with a copy of the regulations contained in this subpart and inform the court or other authority that the demand has been, or is being, as the case may be, referred for the prompt consideration of the appropriate DOE official and shall respectfully request the court or authority to stay the demand pending receipt of the requested instructions."], ["10:10:3.0.1.1.2.2.1.6", 10, "Energy", "II", "A", "202", "PART 202\u2014PRODUCTION OR DISCLOSURE OF MATERIAL OR INFORMATION", "B", "Subpart B\u2014Production or Disclosure in Response to Subpoenas or Demands of Courts or Other Authorities", "", "\u00a7 202.26 Procedure in the event of an adverse ruling.", "DOE", "", "", "", "If the court or other authority declines to stay the effect of the demand in response to a request made in accordance with \u00a7 202.25 pending receipt of instructions, of if the court or other authority rules that the demand must be complied with irrespective of instructions not to produce the material or disclose the information sought, the employee or former employee upon whom the demand has been made shall respectfully decline to comply with the demand. \u201cUnited States ex rel Touhy v. Ragen,\u201d 340 U.S. 462."], ["17:17:3.0.1.1.3.0.17.1", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "", "", "", "\u00a7 202.1 General.", "SEC", "", "", "[25 FR 6736, July 15, 1960, as amended at 76 FR 71875, Nov. 21, 2011]", "(a) The statutes administered by the Commission provide generally (1) for the filing with it of certain statements, such as registration statements, periodic and ownership reports, and proxy solicitation material, and for the filing of certain plans of reorganization, applications and declarations seeking Commission approvals; (2) for Commission determination through formal procedures of matters initiated by private parties or by the Commission; (3) for the investigation and examination of persons and records where necessary to carry out the purposes of the statutes and for enforcement of statutory provisions; and (4) for the adoption of rules and regulations where necessary to effectuate the purposes of the statutes.\n\n(b) In addition to the Commission's rules of practice set forth in part 201 of this chapter, the Commission has promulgated rules and regulations pursuant to the several statutes it administers (parts 230, 240, 260, 270 and 275 of this chapter). These parts contain substantive provisions and include as well numerous provisions detailing the procedure for meeting specific standards embodied in the statutes. The Commission's rules and regulations under each of the statutes are available in pamphlet form upon request to the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.\n\n(c) The statutes and the published rules, regulations and forms thereunder prescribe the course and method of formal procedures to be followed in Commission proceedings. These are supplemented where feasible by certain informal procedures designed to aid the public and facilitate the execution of the Commission's functions. There follows a brief description of procedures generally followed by the Commission which have not been formalized in rules.\n\n(d) The informal procedures of the Commission are largely concerned with the rendering of advice and assistance by the Commission's staff to members of the public dealing with the Commission. While opinions expressed by members of the staff do not constitute an official expression of the Commission's views, they represent the views of persons who are continuously working with the provisions of the statute involved. And any statement by the director, associate director, assistant director, chief accountant, chief counsel, or chief financial analyst of a division can be relied upon as representing the views of that division. In certain instances an informal statement of the views of the Commission may be obtained. The staff, upon request or on its own motion, will generally present questions to the Commission which involve matters of substantial importance and where the issues are novel or highly complex, although the granting of a request for an informal statement by the Commission is entirely within its discretion."], ["17:17:3.0.1.1.3.0.17.10", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "", "", "", "\u00a7 202.9 Small entity enforcement penalty reduction policy.", "SEC", "", "", "[62 FR 16079, Apr. 4, 1997, as amended at 76 FR 71875, Nov. 21, 2011]", "The Commission's policy with respect to whether to reduce or assess civil money penalties against a small entity is:\n\n(a) The Commission will consider on a case-by-case basis whether to reduce or not assess civil money penalties against a small entity. In determining whether to reduce or not assess penalties against a specific small entity, the following considerations will apply:\n\n(1) Except as provided in paragraph (a)(3) of this section, penalty reduction will not be available for any small entity if:\n\n(i) The small entity was subject previously to an enforcement action;\n\n(ii) Any of the small entity's violations involved willful or criminal conduct; or\n\n(iii) The small entity did not make a good faith effort to comply with the law.\n\n(2) In considering whether the Commission will reduce or refrain from assessing a civil money penalty, the Commission may consider:\n\n(i) The egregiousness of the violations;\n\n(ii) The isolated or repeated nature of the violations;\n\n(iii) The violator's state of mind when committing the violations;\n\n(iv) The violator's history (if any) of legal or regulatory violations;\n\n(v) The extent to which the violator cooperated during the investigation;\n\n(vi) Whether the violator has engaged in subsequent remedial efforts to mitigate the effects of the violation and to prevent future violations;\n\n(vii) The degree to which a penalty will deter the violator or others from committing future violations; and\n\n(viii) Any other relevant fact.\n\n(3) The Commission also may consider whether to reduce or not assess a civil money penalty against a small entity, including a small entity otherwise excluded from this policy under paragraphs (a)(1) (i)-(iii) of this section, if the small entity can demonstrate to the Commission's satisfaction that it is financially unable to pay the penalty, immediately or over a reasonable period of time, in whole or in part.\n\n(4) For purposes of this policy, an entity qualifies as \u201csmall\u201d if it is a small business or small organization as defined by Commission rules adopted for the purpose of compliance with the Regulatory Flexibility Act. \n 1 \n   An entity not included in these definitions will be considered \u201csmall\u201d for purposes of this policy if it meets the total asset amount that applies to issuers as set forth in \u00a7 230.157a of this chapter. \n 2\n\n1  Pursuant to the Reg. Flex. Act, 5 U.S.C. \u00a7 601(3), the Commission has adopted appropriate definitions of \u201csmall business\u201d for purposes of the Reg. Flex. Act.  See  17 CFR 270.0-10, 275.0-7, 240.0-10, 230.157, and 260.0-7. The Commission recently proposed amendments to certain of these definitions.  Definitions of \u201cSmall Business\u201d or \u201cSmall Organization\u201d Under the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Securities Exchange Act of 1934, and the Securities Act of 1933,  Securities Act Rel. No. 7383, 62 FR 4106 (Jan. 28, 1997). The Commission extended the comment period for the proposed amendments to April 30, 1997, 62 FR 13356 (Mar. 20, 1997). Based on an analysis of the language and legislative history of the Reg. Flex. Act, Congress does not appear to have intended that Act to apply to natural persons (as opposed to individual proprietorships) or to foreign entities. The Commission understands that staff at the Small Business Administration have taken the same position.\n\n2  At present, this threshold is $5 million. Thus, non-regulated entities, such as general partnerships, privately held corporations or professional service organizations, with assets of $5 million or less may qualify for penalty-reduction.\n\n(b) This policy does not create a right or remedy for any person. This policy shall not apply to any remedy that may be sought by the Commission other than civil money penalties, whether or not such other remedy may be characterized as penal or remedial."], ["17:17:3.0.1.1.3.0.17.11", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "", "", "", "\u00a7 202.10 Policy statement of the Securities and Exchange Commission concerning subpoenas to members of the news media.", "SEC", "", "", "[71 FR 20340, Apr. 20, 2006]", "Freedom of the press is of vital importance to the mission of the Securities and Exchange Commission. Effective journalism complements the Commission's efforts to ensure that investors receive the full and fair disclosure that the law requires, and that they deserve. Diligent reporting is an essential means of bringing securities law violations to light and ultimately helps to deter illegal conduct. In this  Policy Statement the Commission sets forth guidelines for the agency's professional staff  to ensure that vigorous enforcement of the federal securities laws is conducted completely consistently with the principles of the First Amendment's guarantee of freedom of the press, and specifically to avoid the issuance of subpoenas to members of the media that might impair the news gathering and reporting functions. These guidelines shall be adhered to by all members of the staff in all cases:\n\n(a) In determining whether to issue a subpoena to a member of the news media, the approach in every case must be to strike the proper balance between the public's interest in the free dissemination of ideas and information and the public's interest in effective enforcement of the federal securities laws.\n\n(b) When the staff investigating a matter determines that a member of the news media may have information relevant to the investigation, the staff should:\n\n(1) Determine whether the information might be obtainable from alternative non-media sources.\n\n(2) Make all reasonable efforts to obtain that information from those alternative sources. Whether all reasonable efforts have been made will depend on the particular circumstances of the investigation, including whether there is an immediate need to preserve assets or protect investors from an ongoing fraud.\n\n(3) Determine whether the information is essential to successful completion of the investigation.\n\n(c) If the information cannot reasonably be obtained from alternative sources and the information is essential to the investigation, then the staff, after seeking approval from the responsible Regional Director, District Administrator, or Associate Director, should contact legal counsel for the member of the news media. Staff should contact a member of the news media directly only if the member is not represented by legal counsel. The purpose of this contact is to explore whether the member may have information essential to the investigation, and to determine the interests of the media with respect to the information. If the nature of the investigation permits, the staff should make clear what its needs are as well as its willingness to respond to particular problems of the media. The staff should consult with the Commission's Office of Public Affairs, as appropriate.\n\n(d) The staff should negotiate with news media members or their counsel, consistently with this Policy Statement, to obtain the essential information through informal channels, avoiding the issuance of a subpoena, if the responsible Regional Director, District Administrator, or Associate Director determines that such negotiations would not substantially impair the integrity of the investigation. Depending on the circumstances of the investigation, informal channels may include voluntary production, informal interviews, or written summaries.\n\n(e) If negotiations are not successful in achieving a resolution that accommodates the Commission's interest in the information and the media's interests without issuing a subpoena, the staff investigating the matter should then consider whether to seek the issuance of a subpoena for the information. The following principles should guide the determination of whether a subpoena to a member of the news media should be issued:\n\n(1) There should be reasonable grounds to believe that the information sought is essential to successful completion of the investigation. The subpoena should not be used to obtain peripheral or nonessential information.\n\n(2) The staff should have exhausted all reasonable alternative means of obtaining the information from non-media sources. Whether all reasonable efforts have been made to obtain the information from alternative sources will depend on the particular circumstances of the investigation, including whether there is an immediate need to preserve assets or protect investors from an ongoing fraud.\n\n(f) If there are reasonable grounds to believe the information sought is essential to the investigation, all reasonable alternative means of obtaining it have been exhausted, and all efforts at negotiation have failed, then the staff investigating the matter shall seek authorization for the subpoena from the Director of the Division of Enforcement. No subpoena shall be issued unless the Director, in consultation with the General Counsel, has authorized its issuance.\n\n(g) In the event the Director of the Division of Enforcement, after consultation with the General Counsel, authorizes the issuance of a subpoena, notice shall immediately be provided to the Chairman of the Commission.\n\n(h) Counsel (or the member of the news media, if not represented by counsel) shall be given reasonable and timely notice of the determination of the Director of the Division of Enforcement to authorize the subpoena and the Director's intention to issue it.\n\n(i) Subpoenas should be negotiated with counsel for the member of the news media to narrowly tailor the request for only essential information. In negotiations with counsel, the staff should attempt to accommodate the interests of the Commission in the information with the interests of the media.\n\n(j) Subpoenas should, wherever possible, be directed at material information regarding a limited subject matter, should cover a reasonably limited period of time, and should avoid requiring production of a large volume of unpublished material. They should give reasonable and timely notice of their demand for documents.\n\n(k) In the absence of special circumstances, subpoenas to members of the news media should be limited to the verification of published information and to surrounding circumstances relating to the accuracy of published information.\n\n(l) Because the intent of this policy statement is to protect freedom of the press, news gathering functions, and news media sources, this policy statement does not apply to demands for purely commercial or financial information unrelated to the news gathering function.\n\n(m) Failure to follow this policy may constitute grounds for appropriate disciplinary action. The principles set forth in this statement are not intended to create or recognize any legally enforceable rights in any person."], ["17:17:3.0.1.1.3.0.17.12", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "", "", "", "\u00a7 202.12 Policy statement concerning cooperation by individuals in its investigations and related enforcement actions.", "SEC", "", "", "[75 FR 3123, Jan. 19, 2010]", "Cooperation by individuals and entities in the Commission's investigations and related enforcement actions can contribute significantly to the success of the agency's mission. Cooperation can enhance the Commission's ability to detect violations of the federal securities laws, increase the effectiveness and efficiency of the Commission's investigations, and provide important evidence for the Commission's enforcement actions. There is a wide spectrum of tools available to the Commission and its staff for facilitating and rewarding cooperation by individuals, ranging from taking no enforcement action to pursuing reduced charges and sanctions in connection with enforcement actions. As with any cooperation program, there exists some tension between the objectives of holding individuals fully accountable for their misconduct and providing incentives for individuals to cooperate with law enforcement authorities. This policy statement sets forth the analytical framework employed by the Commission and its staff for resolving this tension in a manner that ensures that potential cooperation arrangements maximize the Commission's law enforcement interests. Although the evaluation of cooperation requires a case-by-case analysis of the specific circumstances presented, as described in greater detail below, the Commission's general approach is to determine whether, how much, and in what manner to credit cooperation by individuals by evaluating four considerations: the assistance provided by the cooperating individual in the Commission's investigation or related enforcement actions (\u201cInvestigation\u201d); the importance of the underlying matter in which the individual cooperated; the societal interest in ensuring that the cooperating individual is held accountable for his or her misconduct; and the appropriateness of cooperation credit based upon the profile of the cooperating individual. In the end, the goal of the Commission's analysis is to protect the investing public by determining whether the public interest in facilitating and rewarding an individual's cooperation in order to advance the Commission's law enforcement interests justifies the credit awarded to the individual for his or her cooperation.\n\n(a)  Assistance provided by the individual.  The Commission assesses the assistance provided by the cooperating individual in the Investigation by considering, among other things:\n\n(1) The value of the individual's cooperation to the Investigation including, but not limited to:\n\n(i) Whether the individual's cooperation resulted in substantial assistance to the Investigation;\n\n(ii) The timeliness of the individual's cooperation, including whether the individual was first to report the misconduct to the Commission or to offer his or her cooperation in the Investigation, and whether the cooperation was provided before he or she had any knowledge of a pending investigation or related action;\n\n(iii) Whether the Investigation was initiated based on information or other cooperation provided by the individual;\n\n(iv) The quality of cooperation provided by the individual, including whether the cooperation was truthful, complete, and reliable; and\n\n(v) The time and resources conserved as a result of the individual's cooperation in the Investigation.\n\n(2) The nature of the individual's cooperation in the Investigation including, but not limited to:\n\n(i) Whether the individual's cooperation was voluntary or required by the terms of an agreement with another law enforcement or regulatory organization;\n\n(ii) The types of assistance the individual provided to the Commission;\n\n(iii) Whether the individual provided non-privileged information, which information was not requested by the staff or otherwise might not have been discovered;\n\n(iv) Whether the individual encouraged or authorized others to assist the staff who might not have otherwise participated in the Investigation; and\n\n(v) Any unique circumstances in which the individual provided the cooperation.\n\n(b)  Importance of the underlying matter.  The Commission assesses the importance of the Investigation in which the individual cooperated by considering, among other things:\n\n(1) The character of the Investigation including, but not limited to:\n\n(i) Whether the subject matter of the Investigation is a Commission priority;\n\n(ii) The type of securities violations;\n\n(iii) The age and duration of the misconduct;\n\n(iv) The number of violations; and\n\n(v) The isolated or repetitive nature of the violations.\n\n(2) The dangers to investors or others presented by the underlying violations involved in the Investigation including, but not limited to:\n\n(i) The amount of harm or potential harm caused by the underlying violations;\n\n(ii) The type of harm resulting from or threatened by the underlying violations; and\n\n(iii) The number of individuals or entities harmed.\n 1\n\n1  Cooperation in Investigations that involve priority matters or serious, ongoing, or widespread violations will be viewed most favorably.\n\n(c)  Interest in holding the individual accountable.  The Commission assesses the societal interest in holding the cooperating individual fully accountable for his or her misconduct by considering, among other things:\n\n(1) The severity of the individual's misconduct assessed by the nature of the violations and in the context of the individual's knowledge, education, training, experience, and position of responsibility at the time the violations occurred;\n\n(2) The culpability of the individual, including, but not limited to, whether the individual acted with scienter, both generally and in relation to others who participated in the misconduct;\n\n(3) The degree to which the individual tolerated illegal activity including, but not limited to, whether he or she took steps to prevent the violations from occurring or continuing, such as notifying the Commission or other appropriate law enforcement agency of the misconduct or, in the case of a violation involving a business organization, by notifying members of management not involved in the misconduct, the board of directors or the equivalent body not involved in the misconduct, or the auditors of such business organization of the misconduct;\n\n(4) The efforts undertaken by the individual to remediate the harm caused by the violations including, but not limited to, whether he or she paid or agreed to pay disgorgement to injured investors and other victims or assisted these victims and the authorities in the recovery of the fruits and instrumentalities of the violations; and\n\n(5) The sanctions imposed on the individual by other federal or state authorities and industry organizations for the violations involved in the Investigation.\n\n(d)  Profile of the individual.  The Commission assesses whether, how much, and in what manner it is in the public interest to award credit for cooperation, in part, based upon the cooperating individual's personal and professional profile by considering, among other things:\n\n(1) The individual's history of lawfulness, including complying with securities laws or regulations;\n\n(2) The degree to which the individual has demonstrated an acceptance of responsibility for his or her past misconduct; and\n\n(3) The degree to which the individual will have an opportunity to commit future violations of the federal securities laws in light of his or her occupation\u2014including, but not limited to, whether he or she serves as: A licensed individual, such as an attorney or accountant; an associated person of a regulated entity, such as a broker or dealer; a fiduciary for other individuals or entities regarding financial matters; an officer or director of public companies; or a member of senior management\u2014together with any existing or proposed safeguards based upon the individual's particular circumstances.\n\nBefore the Commission evaluates an individual's cooperation, it analyzes the unique facts and circumstances of the case. The above principles are not listed in order of importance nor are they intended to be all-inclusive or to require a specific determination in any particular case. Furthermore, depending upon the facts and circumstances of each case, some of the principles may not be applicable or may deserve greater weight than others. Finally, neither this statement, nor the principles set forth herein creates or recognizes any legally enforceable rights for any person."], ["17:17:3.0.1.1.3.0.17.13", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "", "", "", "\u00a7 202.13 Informal procedure with respect to applications under the Investment Company Act of 1940.", "SEC", "", "", "[85 FR 57107, Sept. 15, 2020]", "(a) On any application subject to 17 CFR 270.0-5, other than an application eligible for and proceeding under expedited review as provided for by 17 CFR 270.0-5(d), (e), and (f), the Division should take action within 90 days of the initial filing and each of the first three amendments thereto, and within 60 days of any subsequent amendment. Such 90- or 60-day period will stop running upon any irregular closure of the Commission's Washington, DC office to the public for normal business, including, but not limited to, closure due to a lapse in Federal appropriations, national emergency, inclement weather, or ad hoc Federal holiday, and will resume upon the reopening of the Commission's Washington, DC office to the public for normal business. The Division may grant 60-day extensions and the applicant should be notified of any such extension.\n\n(b) Action on the application or any amendment thereto shall consist of:\n\n(1) Issuing a notice;\n\n(2) Providing the applicant with requests for clarification or modification of the application; or\n\n(3) Informing applicant that the application will be forwarded to the Commission, in which case the application is no longer subject to the provisions set forth in paragraph (a) of this section.\n\n(c) The provisions of this section, including the timeframes provided for in this section, are not intended to create enforceable rights by any interested parties and shall not be deemed to do so. Rather, this section provides informal non-binding guidelines and procedures that the Commission anticipates the Division following."], ["17:17:3.0.1.1.3.0.17.14", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "", "", "", "\u00a7 202.14 Policy statement concerning agency referrals for potential criminal enforcement.", "SEC", "", "", "[90 FR 26204, June 20, 2025]", "(a) Subject to appropriate exceptions and to the extent consistent with law, in considering whether to refer potential violations, including of criminal regulatory offenses, to the Department of Justice, the staff of the Commission should consider, among other factors:\n\n(1) The harm or risk of harm, pecuniary or otherwise, caused by the potential offense, including whether the putative defendant's conduct harmed or risked harming many victims;\n\n(2) The potential gain to the putative defendant that could result from the offense;\n\n(3) Whether the putative defendant held specialized knowledge, expertise, or was licensed in an industry related to the rule or regulation at issue;\n\n(4) Whether the putative defendant knew the conduct would cause harm or that it violated the law;\n\n(5) Whether the putative defendant is a recidivist or has otherwise engaged in a pattern of misconduct; and\n\n(6) Whether the involvement of the Department of Justice will provide additional meaningful protection to investors.\n\n(b) This general policy is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person."], ["17:17:3.0.1.1.3.0.17.2", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "", "", "", "\u00a7 202.2 Pre-filing assistance and interpretative advice.", "SEC", "", "", "[25 FR 6736, July 15, 1960, as amended at 59 FR 5945, Feb. 9, 1994; 73 FR 32227, June 5, 2008; 76 FR 71875, Nov. 21, 2011]", "The staff of the Commission renders interpretative and advisory assistance to members of the general public, prospective registrants, applicants and declarants. For example, persons having a question regarding the availability of an exemption may secure informal administrative interpretations of the applicable statute or rule as they relate to the particular facts and circumstances presented. Similarly, persons contemplating filings with the Commission may receive advice of a general nature as to the preparation thereof, including information as to the forms to be used and the scope of the items contained in the forms. Inquiries may be directed to an appropriate officer of the Commission's staff. In addition, informal discussions with members of the staff may be arranged whenever feasible, at the Commission's central office or, except in connection with certain matters under the Investment Company Act of 1940, at one of its regional offices."], ["17:17:3.0.1.1.3.0.17.3", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "", "", "", "\u00a7 202.3 Processing of filings.", "SEC", "", "", "[41 FR 44699, Oct. 12, 1976, as amended at 44 FR 21567, Apr. 10, 1979; 49 FR 12686, Mar. 30, 1984; 57 FR 18216, Apr. 29, 1992; 58 FR 15004, Mar. 18, 1993; 59 FR 5945, Feb. 9, 1994; 63 FR 70916, Dec. 22, 1998; 64 FR 19451, Apr. 21, 1999; 66 FR 43741, Aug. 20, 2001; 76 FR 71875, Nov. 21, 2011; 90 FR 7359, Jan. 21, 2025]", "(a) Registration statements, proxy statements, letters of notification, periodic reports, applications for qualification of indentures, and similar documents filed with the Commission under the Securities Act of 1933 and the Trust Indenture Act of 1939, and certain filings under the Securities Exchange Act of 1934 are routed to the Division of Corporation Finance, which passes initially on the adequacy of disclosure and recommends the initial action to be taken. If the filing appears to afford inadequate disclosure, as for example through omission of material information or through violation of accepted accounting principles and practices, the usual practice is to bring the deficiency to the attention of the person who filed the document by letter from the Assistant Director assigned supervision over the particular filing, and to afford a reasonable opportunity to discuss the matter and make the necessary corrections. This informal procedure is not generally employed when the deficiencies appear to stem from careless disregard of the statutes and rules or a deliberate attempt to conceal or mislead or where the Commission deems formal proceedings necessary in the public interest. If an electronic filing is not prepared in accordance with the requirements of the current EDGAR Filer Manual, the filing may be suspended and the filer so notified. Reasonable opportunity will be afforded the filer to make the necessary corrections or resubmit the filing as needed. Where it appears that the filing affords adequate disclosure, acceleration of its effectiveness when appropriate normally will be granted. A similar procedure is followed with respect to filings under the Investment Company Act of 1940 and certain filings relating to investment companies under the Securities Act of 1933, the Securities Exchange Act of 1934, and the Trust Indenture Act of 1939, which are routed to the Division of Investment Management. A similar procedure is also followed in the Commission's Regional Offices with respect to registration statements on Forms SB-1 and SB-2 (17 CFR 239.9 and 239.10) and related filings under the Trust Indenture Act of 1939.\n\n(b)(1) Applications for registration as brokers, dealers, investment advisers, municipal securities dealers and transfer agents are submitted to the Office of Filings and Information Services where they are examined to determine whether all necessary information has been supplied and whether all required financial statements and other documents have been furnished in proper form. Defective applications may be returned with a request for correction or held until corrected before being accepted as a filing. The files of the Commission and other sources of information are considered to determine whether any person connected with the applicant appears to have engaged in activities which would warrant commencement of proceedings on the question of denial of registration. The staff confers with applicants and makes suggestions in appropriate cases for amendments and supplemental information. Where it appears appropriate in the public interest and where a basis therefore exists, denial proceedings may be instituted. Within 45 days of the date of the filing of a broker-dealer, investment adviser or municipal securities dealer application (or within such longer period as to which the applicant consents), the Commission shall by order grant registration or institute proceedings to determine whether registration should be denied. An application for registration as a transfer agent shall become effective within 30 days after receipt of the application (or within such shorter period as the Commission may determine). The Office of Filings and Information Services is also responsible for the processing and substantive examination of statements of beneficial ownership of securities and changes in such ownership filed under the Securities Exchange Act of 1934, and the Investment Company Act of 1940, and for the examination of reports filed pursuant to \u00a7 230.144 of this chapter.\n\n(2) Applications for registration as national securities exchanges, or exemption from registration as exchanges by reason of such exchanges' limited volume of transactions filed with the Commission are routed to the Division of Trading and Markets, which examines these applications to determine whether all necessary information has been supplied and whether all required financial statements and other documents have been furnished in proper form. Defective applications may be returned. The files of the Commission and other sources of information are considered to determine whether any person connected with the applicant appears to have engaged in activities which would warrant commencement of proceedings on the question of denial of registration. The staff confers with applicants and makes suggestions in appropriate cases for amendments and supplemental information. Where it appears appropriate in the public interest and where a basis therefore exists, denial proceedings may be instituted. Within 90 days of the date of publication of a notice of the filing of an application for registration as a national securities exchange, or exemption from registration by reason of such exchanges' limited volume of transactions (or within such longer period as to which the applicant consents), the Commission shall by order grant registration, or institute proceedings to determine whether registration should be denied as provided in \u00a7 240.19(a)(1) of this chapter.\n\n(3) Notice forms for registration as national securities exchanges pursuant to section 6(g)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78f(g)(1)) filed with the Commission are routed to the Division of Trading and Markets, which examines these notices to determine whether all necessary information has been supplied and whether all other required documents have been furnished in proper form. Defective notices may be returned."], ["17:17:3.0.1.1.3.0.17.4", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "", "", "", "\u00a7 202.3a Instructions for filing fees.", "SEC", "", "", "[73 FR 6013, Feb. 1, 2008, as amended at 76 FR 28890, May 19, 2011; 86 FR 70197, Dec. 9, 2021]", "(a)  General instructions for remittance of filing fees.  Payment of filing fees specified by the following sections shall be made according to the directions listed in this section: \u00a7\u00a7 230.111, 240.0-9, and 270.0-8 of this chapter. All such fees are to be paid through the U.S. Treasury designated lockbox depository or system and may be paid by wire transfer, debit card, or credit card or via the Automated Clearing House Network (\u201cACH\u201d) pursuant to the specific instructions set forth in paragraph (b) of this section. Checks will not be accepted for payment of fees. To ensure proper posting, all filers must include their Commission-assigned Central Index Key (CIK) number (also known as the Commission-assigned registrant or payor account number) on fee payments. If a third party submits a fee payment, the fee payment must specify the account number to which the fee is to be applied.\n\n(b)  Instructions for payment of filing fees.  Except as provided in paragraph (c) of this section, these instructions provide direction for remitting fees specified in paragraph (a) of this section. You may contact the Filing Fees Branch in the Office of Financial Management at (202) 551-8900 or go to  https://www.sec.gov/paymentoptions  for additional information if you have questions.\n\n(1)  Instructions for payment of fees by wire transfer (FEDWIRE).  U.S. Bank, N.A. in St. Louis, Missouri, is the U.S. Treasury designated financial agent for Commission filing fee payments. The hours of operation at U.S. Bank for wire transfers are each day, except Saturdays, Sundays, and Federal holidays, 8:30 a.m. to 6:30 p.m. Eastern Standard Time or Eastern Daylight Savings Time, whichever is currently in effect. Any bank or wire transfer service may initiate wire transfers of filing fee payments through the FEDWIRE system to U.S. Bank. A filing entity does not need to establish an account at U.S. Bank in order to remit filing fee payments.\n\n(i) To ensure proper credit and prompt filing acceptance, in all wire transfers of filing fees to the Commission, you must include:\n\n(A) The Commission's account number at U.S. Bank (850000001001); and\n\n(B) The payor's CIK number.\n\n(ii) You may refer to the examples found on the Commission's website at  https://www.sec.gov/paymentoptions  for the proper format.\n\n(2)  Instructions for payment of fees by debit card or credit card or via the Automated Clearing House Network (ACH).  To remit a filing fee payment by debit card or credit card or via ACH, please go to the Commission's EDGAR system.\n\nWire transfers and debit card, credit card, and ACH payments are not instantaneous. The time required to process a wire transfer through the FEDWIRE system, from origination to receipt by U.S. Bank, varies substantially. Debit card and credit card payments generally are expected to become available to the Commission the next day. ACH payments generally are expected to become available to the Commission within one to three business days. Specified filings, such as registration statements pursuant to section 6(b) of the Securities Act of 1933 that provide for the registration of securities and mandate the receipt of the appropriate fee payment upon filing, and transactional filings pursuant to the Securities Exchange Act of 1934, such as many proxy statements involving extraordinary business transactions, will not be accepted if sufficient funds have not been received by the Commission at the time of filing.\n\nYou should obtain the reference number of the wire transfer from your bank or wire transfer service. Having this number can greatly facilitate tracing the funds if any problems occur. If a wire transfer of filing fees does not contain the required information in the proper format, the Commission may not be able to identify the payor and the acceptance of filings may be delayed. To ensure proper credit, you must provide all required information to the sending bank or wire transfer service. Commission data must be inserted in the proper fields. The most critical data are the Commission's account number at U.S. Bank and the payor CIK, the Commission-assigned account number identified as the CIK number.\n\n(c)  Special instructions for \u00a7\u00a7 230.462(b) and 230.110(d) of this chapter.  Notwithstanding paragraphs (a) and (b) of this section, for registration statements filed pursuant to \u00a7\u00a7 230.462(b) and \u00a7 230.110(d) of this chapter, payment of filing fees for the purposes of this section may be made by:\n\n(1) The registrant or its agent instructing its bank or a wire transfer service to transmit to the Commission the applicable filing fee by a wire transfer of such amount from the issuer's account or its agent's account to the U.S. Treasury designated lockbox depository as soon as practicable, but no later than the close of the next business day following the filing of the registration statement; and\n\n(2) The registrant submitting with the registration statement at the time of filing a certification that:\n\n(i) The registrant or its agent has so instructed its bank or a wire transfer service;\n\n(ii) The registrant or its agent will not revoke such instructions; and\n\n(iii) The registrant or its agent has sufficient funds in such account to cover the amount of such filing fee.\n\nSuch instructions may be sent on the date of filing the registration statement after the close of business of such bank or wire transfer service, provided that the registrant undertakes in the certification sent to the Commission with the registration statement that it will confirm receipt of such instructions by the bank or wire transfer service during regular business hours on the following business day.\n\n(d)  Filing fee accounts.  A filing fee account is maintained for each filer who submits a filing requiring a fee on the Commission's EDGAR system or who submits funds to the U.S. Treasury designated depository in anticipation of paying a filing fee. Account statements are regularly prepared and provided to account holders. Account holders must maintain a current account address with the Commission to ensure timely access to these statements.\n\nThe deposit of money into a filing fee account does not constitute payment of a filing fee. Payment of the filing fee occurs at the time the filing is made, commensurate with the drawing down of the balance of the fee account.\n\n(e)  Return of funds from inactive accounts.  Funds held in any filing fee account in which there has not been a deposit, withdrawal or other adjustment for more than three years will be returned to the account holder, and account statements will not be sent again until a deposit, withdrawal or other adjustment is made with respect to the account. Filers must maintain a current account address to assure the timely return of funds. It may not be possible to return funds from inactive accounts if the Commission is unable to identify a current account address of an account holder after making reasonable efforts to do so.\n\nA company must update its account and other addresses using the EDGAR Web site. This method ensures data integrity and the timeliest update. Simply changing an address in the text of the cover page of a filing made on the EDGAR system will not be sufficient to update the Commission's account address records."], ["17:17:3.0.1.1.3.0.17.5", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "", "", "", "\u00a7 202.4 Facilitating administrative hearings.", "SEC", "", "", "", "(a) Applications, declarations, and other requests involving formal Commission action after opportunity for hearing are scrutinized by the appropriate division for conformance with applicable statutory standards and Commission rules and generally the filing party is advised of deficiencies. Prior to passing upon applications and declarations the Commission receives the views of all interested persons at public hearings whenever appropriate; hence, any applicant or declarant seeking Commission approval of proposed transactions by a particular time should file his application or declaration in time to allow for the presentation and consideration of such views.\n\n(b) After the staff has had an opportunity to study an application or declaration, interested persons may informally discuss the problems therein raised to the extent that time and the nature of the case permit (e.g., consideration is usually given to whether the proceeding is contested and if so to the nature of the contest). In such event, the staff will, to the extent feasible, advise as to the nature of the issues raised by the filing, the necessity for any amendments to the documents filed, the type of evidence it believes should be presented at the hearing and, in some instances, the nature, form, and contents of documents to be submitted as formal exhibits. The staff will, in addition, generally advise as to Commission policy in past cases which dealt with the same subject matter as the filing under consideration.\n\n(c) During the course of the hearings, the staff is generally available for informal discussions to reconcile bona fide divergent views not only between itself and other persons interested in the proceedings, but among all interested persons; and, when circumstances permit, an attempt is made to narrow, if possible, the issues to be considered at the formal hearing.\n\n(d) In some instances the Commission in the order accompanying its findings and opinion reserves jurisdiction over certain matters relating to the proceeding, such as payment of fees and expenses, accounting entries, terms and conditions relating to securities to be issued, and other matters. In such cases, upon receipt of satisfactory information and data the Commission considers whether further hearing is required before releasing jurisdiction."], ["17:17:3.0.1.1.3.0.17.6", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "", "", "", "\u00a7 202.5 Enforcement activities.", "SEC", "", "", "[25 FR 6736, July 15, 1960, as amended at 37 FR 23829, Nov. 9, 1972; 37 FR 25224, Nov. 29, 1972; 44 FR 50835, Aug. 30, 1979; 46 FR 47532, Sept. 29, 1981; 47 FR 26822, June 22, 1982; 54 FR 24332, June 7, 1989; 59 FR 5945, Feb. 9, 1994; 73 FR 32227, June 5, 2008]", "(a) Where, from complaints received from members of the public, communications from Federal or State agencies, examination of filings made with the Commission, or otherwise, it appears that there may be violation of the acts administered by the Commission or the rules or regulations thereunder, a preliminary investigation is generally made. In such preliminary investigation no process is issued or testimony compelled. The Commission may, in its discretion, make such formal investigations and authorize the use of process as it deems necessary to determine whether any person has violated, is violating, or is about to violate any provision of the federal securities laws or the rules of a self-regulatory organization of which the person is a member or participant. Unless otherwise ordered by the Commission, the investigation or examination is non-public and the reports thereon are for staff and Commission use only.\n\n(b) After investigation or otherwise the Commission may in its discretion take one or more of the following actions: Institution of administrative proceedings looking to the imposition of remedial sanctions, initiation of injunctive proceedings in the courts, and, in the case of a willful violation, reference of the matter to the Department of Justice for criminal prosecution. The Commission may also, on some occasions, refer the matter to, or grant requests for access to its files made by, domestic and foreign governmental authorities or foreign securities authorities, self-regulatory organizations such as stock exchanges or the National Association of Securities Dealers, Inc., and other persons or entities.\n\n(c) Persons who become involved in preliminary or formal investigations may, on their own initiative, submit a written statement to the Commission setting forth their interests and position in regard to the subject matter of the investigation. Upon request, the staff, in its discretion, may advise such persons of the general nature of the investigation, including the indicated violations as they pertain to them, and the amount of time that may be available for preparing and submitting a statement prior to the presentation of a staff recommendation to the Commission for the commencement of an administrative or injunction proceeding. Submissions by interested persons should be forwarded to the appropriate Division Director or Regional Director with a copy to the staff members conducting the investigation and should be clearly referenced to the specific investigation to which they relate. In the event a recommendation for the commencement of an enforcement proceeding is presented by the staff, any submissions by interested persons will be forwarded to the Commission in conjunction with the staff memorandum.\n\n(d) In instances where the staff has concluded its investigation of a particular matter and has determined that it will not recommend the commencement of an enforcement proceeding against a person, the staff, in its discretion, may advise the party that its formal investigation has been terminated. Such advice if given must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff's investigation of the particular matter.\n\n(e) The Commission has adopted the policy that in any civil lawsuit brought by it or in any administrative proceeding of an accusatory nature pending before it, it is important to avoid creating, or permitting to be created, an impression that a decree is being entered or a sanction imposed, when the conduct alleged did not, in fact, occur. Accordingly, it hereby announces its policy not to permit a defendant or respondent to consent to a judgment or order that imposes a sanction while denying the allegations in the complaint or order for proceedings. In this regard, the Commission believes that a refusal to admit the allegations is equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies the allegations.\n\n(f) In the course of the Commission's investigations, civil lawsuits, and administrative proceedings, the staff, with appropriate authorization, may discuss with persons involved the disposition of such matters by consent, by settlement, or in some other manner. It is the policy of the Commission, however, that the disposition of any such matter may not, expressly or impliedly, extend to any criminal charges that have been, or may be, brought against any such person or any recommendation with respect thereto. Accordingly, any person involved in an enforcement matter before the Commission who consents, or agrees to consent, to any judgment or order does so solely for the purpose of resolving the claims against him in that investigative, civil, or administrative matter and not for the purpose of resolving any criminal charges that have been, or might be, brought against him. This policy reflects the fact that neither the Commission nor its staff has the authority or responsibility for instituting, conducting, settling, or otherwise disposing of criminal proceedings. That authority and responsibility are vested in the Attorney General and representatives of the Department of Justice."], ["17:17:3.0.1.1.3.0.17.7", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "", "", "", "\u00a7 202.6 Adoption, revision, and rescission of rules and regulations of general application.", "SEC", "", "", "[25 FR 6736, July 15, 1960, as amended at 44 FR 35208, June 19, 1979; 76 FR 71875, Nov. 21, 2011]", "(a) The procedure followed by the Commission in connection with the adoption, revision, and rescission of rules of general application necessarily varies in accordance with the nature of the rule, the extent of public interest therein, and the necessity for speed in its adoption. Rules relating to Commission organization, procedure and management, for example, are generally adopted by the Commission without affording public discussion thereof. On the other hand, in the adoption of substantive rules materially affecting an industry or a segment of the public, such as accounting rules, every feasible effort is made in advance of adoption to receive the views of persons to be affected. In such cases, proposals for the adoption, revision, or rescission of rules are initiated either by the Commission or by members of the public, and to the extent practicable, the practices set forth in paragraph (b) of this section are observed.\n\n(b) After preliminary consideration by the Commission a draft of the proposed rule is published in the  Federal Register  and mailed to interested persons (e.g., other interested regulatory bodies, principal registrants or persons to be affected, stock exchanges, professional societies and leading authorities on the subject concerned and other persons requesting such draft) for comments. Unless accorded confidential treatment pursuant to statute or rule of the Commission, written comments filed with the Commission on or before the closing date for comments become a part of the public record upon the proposed rule. The Commission, in its discretion, may accept and include in the public record written comments received by the Commission after the closing date.\n\n(c) Following analysis of comments received, the rule may be adopted in the form published or in a revised form in the light of such comments. In some cases, a revised draft is prepared and published and, where appropriate, an oral hearing may be held before final action upon the proposal. Any interested person may appear at the hearing and/or may submit written comment for consideration in accordance with the Commission's notice of the rulemaking procedure to be followed. The rule in the form in which it is adopted by the Commission is publicly released and is published in the  Federal Register."], ["17:17:3.0.1.1.3.0.17.8", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "", "", "", "\u00a7 202.7 Submittals.", "SEC", "", "", "[41 FR 44699, Oct. 12, 1976, as amended at 58 FR 14659, Mar. 18, 1993; 59 FR 5945, Feb. 9, 1994; 73 FR 32227, June 5, 2008]", "(a) All required statements, reports, applications, etc. must be filed with the principal office of the Commission unless otherwise specified in the Commission's rules, schedules and forms. Reports by exchange members, brokers and dealers required by \u00a7 240.17a-5 of this chapter under the Securities Exchange Act of 1934 must be filed with the appropriate regional office as provided in \u00a7 230.255(a) of this chapter under the Securities Act of 1933, and with the principal office of the Commission and the appropriate regional office as provided under \u00a7 240.17a-5(a)  et seq.  of this chapter under the Securities Exchange Act of 1934.\n\n(b)  Electronic filings.  All documents required to be filed in electronic format with the Commission pursuant to the federal securities laws or the rules and regulations thereunder shall be filed at the principal office in Washington, DC via EDGAR by delivery to the Commission of a magnetic tape or diskette, or by direct transmission."], ["17:17:3.0.1.1.3.0.17.9", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "", "", "", "\u00a7 202.8 Small entity compliance guides.", "SEC", "", "", "[62 FR 4105, Jan. 28, 1997]", "The following small entity compliance guides are available to the public from the Commission's Publications Room and regional offices:\n\n(a)  Q & A: Small Business and the SEC.  \n 1\n\n1  These items are also available on the Securities and Exchange Commission Web site on the Internet,  http://www.sec.gov.\n\n(b)  The Work of the SEC.  \n 1\n\n(c)  Broker-Dealer Registration Package.\n\n(d)  Investment Adviser Registration Package.\n\n(e)  Investment Company Registration Package.\n\n(f)  Examination Information for Broker-Dealers, Transfer Agents, Investment Advisers and Investment Companies."], ["17:17:3.0.1.1.3.1.17.1", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "A", "Subpart A\u2014Public Company Accounting Oversight Board (Regulation P)", "", "\u00a7 202.140 Interim Commission review of PCAOB inspection reports.", "SEC", "", "", "[75 FR 47449, Aug. 6, 2010]", "(a)  Definitions.\n\n(1)  Board  or  PCAOB  means the Public Company Accounting Oversight Board.\n\n(2)  Registered public accounting firm  or  Firm  shall have the meaning set forth in 15 U.S.C. 7201(a)(12).\n\n(3)  Associated person  means a person associated with the registered public accounting firm as defined in 15 U.S.C. 7201(a)(9).\n\n(b)  Reviewable matters.  A registered public accounting firm may request interim Commission review of an assessment or determination by the PCAOB contained in an inspection report prepared under 15 U.S.C. 7214 and relating to that firm, if the firm:\n\n(1) Has provided the PCAOB with a response, pursuant to the rules of the PCAOB, to the substance of particular items in a draft inspection report and disagrees with the assessments relating to those items contained in any final inspection report prepared by the PCAOB following such response;\n\n(2) Disagrees with an assessment contained in any final inspection report that was not contained in the draft inspection report provided to the firm under 15 U.S.C. 7214(f) or the rules of the PCAOB; or\n\n(3) Disagrees with the determination of the PCAOB that criticisms or defects in the quality control systems of the firm that were identified in an inspection report, but not disclosed to the public, have not been addressed to the satisfaction of the PCAOB within 12 months after the date of that inspection report.\n\n(c)  Procedures for requesting interim Commission review.  (1) A request for interim Commission review with respect to matters described in paragraph (b) of this section must be submitted to the Commission's Office of the Secretary within 30 calendar days of the following:\n\n(i) The date the firm is provided a copy of the final inspection report described in paragraph (b)(1) or (b)(2) of this section; or\n\n(ii) The date the firm receives notice of the PCAOB's determination described in paragraph (b)(3) of this section.\n\n(2) The PCAOB shall not make publicly available the final inspection report or criticisms or defects in the quality control systems of the firm subject to a determination described in paragraph (b) of this section, as applicable, during the 30-day period during which the firm may request interim Commission review, unless the firm consents in writing to earlier publication of the report.\n\n(3) A request for interim Commission review (\u201crequest\u201d or \u201csubmission\u201d) must be marked \u201cRequest for Interim Commission Review With Respect to PCAOB Inspection Report.\u201d The request must focus on the specific matters for which relief is requested and succinctly address the issues raised by the PCAOB. The request, to the extent possible, should include, for example:\n\n(i) A copy of the particular inspection report that is the subject of the request;\n\n(ii) The specific assessments or determinations that are the subject of the request;\n\n(iii) The alleged errors or deficiencies in the PCAOB's assessments or determination and the reasons for the firm's position;\n\n(iv) If the matter is being reviewed under paragraph (b)(3) of this section, any actions taken by the registered public accounting firm to address criticisms or defects identified in the inspection report; and\n\n(v) Any supporting documentation relevant to the review.\n\n(4) The firm must provide a copy of its review request to the PCAOB simultaneously with its submission to the Commission.\n\n(5) A timely review request by a firm will operate as a stay of publication of those portions of the final inspection report or criticisms or defects in the quality control systems of the firm subject to a determination described in paragraph (b) of this section, as applicable, that are the subject of the firm's review request, unless the Commission otherwise determines in its own discretion. Upon expiration of the 30-day period during which the firm may request interim Commission review, the PCAOB shall make publicly available the remainder of the final inspection report or criticisms or defects in the quality control systems of the firm that were indentified in an inspection report, as applicable, that are not the subject of the firm's review request, unless the Commission otherwise determines that such a result would not be necessary or appropriate.\n\n(6) If the firm fails to make a timely review request, pursuant to Section 104(g)(2) of the Act, the PCAOB shall make publicly available the final inspection report or criticisms or defects in the quality control systems of the firm that were indentified in an inspection report, as applicable.\n\n(d)  Procedures for granting or denying the review request.  Within 30 calendar days of a timely review request, the Commission will notify the firm and the PCAOB as to whether the Commission will exercise its discretion to grant the request for an interim review. If the Commission does not grant the review request, the stay of publication is terminated upon notification to the firm and the PCAOB. If the Commission does grant the review request, the stay of publication shall continue unless the Commission determines otherwise in its own discretion, or unless the firm consents in writing to the PCAOB, with a copy to the Commission, to earlier publication.\n\n(e)  Procedures where a review request has been granted.  (1) Where the Commission has notified the firm and the PCAOB that it is granting the request for an interim review, the PCAOB may submit responsive information and documents with the Commission within 15 calendar days of receipt of such notice. The PCAOB must provide a copy of such information and documents simultaneously to the firm.\n\n(2) During the course of the interim review, the Commission may request additional information relating to the PCAOB's assessments or determination under review, and provide a period of up to seven calendar days to respond to such request, from the PCAOB, the firm, and any associated person of the firm. The Commission may grant the firm or the PCAOB a period of up to seven calendar days to respond to any information obtained pursuant to this paragraph. The firm or the PCAOB, as applicable, shall provide simultaneously to the other party all information provided as a result of a request for additional information or responses thereto. The firm with which any associated person from whom information is requested shall provide simultaneously to the PCAOB all information provided as a result of a request for additional information or responses thereto. If the firm (including any associated person) or the PCAOB fails to respond timely to a request from the Commission, such failure may serve as the basis for the Commission to conclude its review and make a determination adverse to the non-responsive party.\n\n(3) The Commission, based on the information submitted by the firm, the PCAOB and any associated persons, shall consider whether the PCAOB's assessments or determination are arbitrary and capricious, or otherwise not consistent with the purposes of the Act.\n\n(4) At the conclusion of its review, the Commission shall inform the firm and the PCAOB in writing that the Commission:\n\n(i) Does not object to all or part of the assessments or determination of the PCAOB and the stay of publication is terminated; or\n\n(ii) Remands to the PCAOB with instructions that the stay of publication is permanent or that the PCAOB take such other actions as the Commission deems necessary or appropriate with respect to publication, including, but not limited to, revising the final inspection report or determinations before publication.\n\n(5) The review pursuant to this section shall be completed and a written notice pursuant to this section shall be sent no more than 75 calendar days after notification to the firm and the PCAOB that the Commission is granting the request for an interim review, unless the Commission extends the period for good cause.\n\n(f)  Treatment of review.  (1) Time periods in this section shall be computed as provided in the Commission's Rules of Practice, 17 CFR 201.160.\n\n(2) Unless otherwise determined by the Commission, the decision to grant or deny a review request and the conclusions of the Commission's review shall be non-public, and the information or documents submitted, created, or obtained by the Commission or its staff in the course of the review shall be deemed non-public. Nothing in this rule shall be construed to impair or limit the ability of any party to request confidential treatment under the Freedom of Information Act, 15 U.S.C. 7215(b)(5), or any other applicable law.\n\n(3) Pursuant to 15 U.S.C. 7214(h)(2), any decision of the Commission as a result of an interim review with respect to a PCAOB inspection report, including whether a request for review is granted or denied, shall not be reviewable under 15 U.S.C. 78y and shall not be deemed to be \u201cfinal agency action\u201d for purposes of 5 U.S.C. 704.\n\n(4) Any action taken by the Commission relates solely to the publication of the relevant inspection report and does not affect the ability of the Commission or PCAOB to take appropriate action.\n\n(g)  Designation of address; Representation.  (1) When a registered public accounting firm first submits a request for interim Commission review, or an associated person first submits information related to a request, the firm or associated person shall submit to the Commission, and keep current, an address at which any notice or other written communication furnished to the firm or associated person may be sent, a contact name and telephone number where the firm or associated person may be reached during business hours and, if represented, the representative's name, business address, and telephone number.\n\n(2) If the firm, PCAOB, or associated person will be represented by a representative, the initial submission of that person shall be accompanied by the notice of appearance required by \u00a7 201.102(d). The other provisions of \u00a7 201.102 with respect to representation before the Commission shall apply."], ["17:17:3.0.1.1.3.1.17.2", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "A", "Subpart A\u2014Public Company Accounting Oversight Board (Regulation P)", "", "\u00a7 202.150 Commission approval of appointment or removal from office of Public Company Accounting Oversight Board hearing officers.", "SEC", "", "", "[84 FR 12908, Apr. 3, 2019]", "The Commission shall approve both the appointment and removal from office of any hearing officer employed by the Public Company Accounting Oversight Board. No action by the Board proposing to appoint or remove from office a hearing officer shall be final absent Commission approval."], ["17:17:3.0.1.1.3.1.17.3", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "A", "Subpart A\u2014Public Company Accounting Oversight Board (Regulation P)", "", "\u00a7 202.170 Initiation of disapproval proceedings for PCAOB proposed rules.", "SEC", "", "", "[76 FR 4072, Jan. 24, 2011]", "Initiation of disapproval proceedings for proposed rules of the Public Company Accounting Oversight Board as defined by section 107 of the Sarbanes-Oxley Act of 2002 are subject to the provisions of \u00a7\u00a7 201.700 and 201.701 of this chapter as fully as if it were a  registered securities association,  except that:\n\n(a)  Demonstration of consistency with the Sarbanes-Oxley Act of 2002.  For purposes of proposed rules of the Public Company Accounting Oversight Board, apply this paragraph in lieu of paragraph (b)(3) of \u00a7 201.700 of this chapter. The burden to demonstrate that a proposed rule is consistent with the requirements of title I of the Sarbanes-Oxley Act of 2002, and the rules and regulations issued thereunder, or as necessary or appropriate in the public interest or for the protection of investors, is on the Public Company Accounting Oversight Board. In its filing the Public Company Accounting Oversight Board must explain in a clear and comprehensible manner why the proposed rule change is consistent with the requirements of title I of the Sarbanes-Oxley Act of 2002 and the rules and regulations thereunder, or as necessary or appropriate in the public interest or for the protection of investors. A mere assertion that the proposed rule change is consistent with those requirements is not sufficient. Instead, the description of the proposed rule, its purpose and operation, its effect, and a legal analysis of its consistency with applicable requirements must all be sufficiently detailed and specific to support an affirmative Commission finding. Any failure by the Public Company Accounting Oversight Board in its proposed rule filing with the Commission may result in the Commission not having a sufficient basis to make an affirmative finding that a proposed rule change is consistent with the title I of the Sarbanes-Oxley Act of 2002, and the rules and regulations issued thereunder, or as necessary or appropriate in the public interest or for the protection of investors.\n\n(b) For each reference to \u201cthe Exchange Act and the rules and regulations thereunder applicable to the self-regulatory organization\u201d apply \u201ctitle I of the Sarbanes-Oxley Act of 2002, and the rules and regulations issued thereunder applicable to such organization, or as necessary or appropriate in the public interest or for the protection of investors.\u201d"], ["17:17:3.0.1.1.3.1.17.4", 17, "Commodity and Securities Exchanges", "II", "", "202", "PART 202\u2014INFORMAL AND OTHER PROCEDURES", "A", "Subpart A\u2014Public Company Accounting Oversight Board (Regulation P)", "", "\u00a7 202.190 Public Company Accounting Oversight Board budget approval process.", "SEC", "", "", "[71 FR 42001, July 24, 2006. Redesignated at 75 FR 47451, Aug. 6, 2010]", "(a)  Purpose.  These procedures are established in connection with consideration and approval of the budget and the accounting support fee for the Public Company Accounting Oversight Board (PCAOB). Actions attributed to the PCAOB in this section shall be performed as authorized by the Sarbanes-Oxley Act of 2002 and the PCAOB's bylaws.\n\n(b)  Definitions.  For the purposes of this section, the following definitions shall apply:\n\n(1)  Budget category  means a grouping of similar expenditures within the PCAOB's budget. Budget categories shall include, among others: personnel, training, recruiting and relocation expenses, information technology, consulting and professional fees, travel, administrative expenses, lease costs and related expenses, and capital improvements of facilities.\n\n(2)  Budget justification  means the justification for each annual budget, prepared in concise and specific terms, covering all of the PCAOB's programs and activities, and including, among other things as may be requested by the Commission:\n\n(i) A performance budget for the budget year;\n\n(ii) An analysis of the PCAOB's budget, including a tabular presentation that identifies the budgetary resources required for each program area (with a breakout of resources by budget category); a description of the budgetary resources identified in the budget in the context of the PCAOB's programs and activities; and an explanation of the analysis used to determine the resources needed to accomplish each program and strategic goal that demonstrates that reasonable opportunities for making more efficient and effective use of resources have been explored;\n\n(iii) A description of the relationship between the results or outcomes the PCAOB expects to achieve (as discussed in the PCAOB's strategic plan) and the resources requested in the budget;\n\n(iv) Assumptions underlying the calculation of the working capital reserve as permitted in paragraph (d)(3) of this section and assumptions underlying PCAOB estimates, including work years, program outputs, base compensation levels and proposed compensation increases, and costs of inputs such as materials or contract costs;\n\n(v) A discussion of any models used to develop PCAOB estimates;\n\n(vi) Detailed funding levels for education, training, and travel of the PCAOB workforce;\n\n(vii) Information sufficient for the Commission to assess current and proposed capital projects and information technology projects; and\n\n(viii) A statement that the PCAOB has considered relative costs and benefits in formulating the programs, projects and activities described in the budget.\n\n(3)  Budget year  means the PCAOB fiscal year that is the subject of the budget prepared and submitted by the PCAOB to the Commission for approval.\n\n(4)  Current year  means the PCAOB fiscal year that precedes the budget year, and is the year in which the PCAOB prepares the budget.\n\n(5)  Performance budget  means a budget that presents what the PCAOB proposes to accomplish in the budget year and what resources these proposals will require, and that serves as the primary basis for the justification of the budget submitted to the Commission for approval. The performance budget includes:\n\n(i) A description of what the PCAOB plans to accomplish, organized by strategic goal;\n\n(ii) Background on what the PCAOB has accomplished, organized by strategic goal;\n\n(iii) Analyses of the strategies the PCAOB uses to influence strategic outcomes, including whether those strategies could be improved and, if so, how they could be improved;\n\n(iv) Analyses of the programs that contribute to each goal and their relative roles and effectiveness;\n\n(v) Performance targets for the budget year and the current year and how the PCAOB expects to achieve those targets, as well as actual performance levels achieved in the year immediately preceding the current year;\n\n(vi) The budgetary resources the PCAOB is requesting to achieve those targets;\n\n(vii) Descriptions of the operations, processes, staff skills, information and other technologies, human resources, capital assets, and other resources to be used in achieving the PCAOB's performance goals; and\n\n(viii) Descriptions of the programs, policies, and management, regulatory, and other initiatives and approaches to be used in achieving the PCAOB's performance goals.\n\n(6)  Preliminary budget  means the draft budget submitted for initial consideration by the Commission, which shall be a complete or substantially complete budget for the budget year, and which is accompanied by a budget justification.\n\n(7)  Program area  means the array of the budgeted amounts and other budget-related data according to the major purpose served, such as registration, inspection, standard-setting, enforcement, and administration.\n\n(8)  Receipts  means collections that result from issuers' payments of accounting support fees; public accounting firms' payment of registration fees and fees associated with annual reports; interest income; and other sources of revenue.\n\n(9)  Strategic plan  means the PCAOB's overarching plan for accomplishing its strategic goals, including forecasts for the current and four following years; estimates of the effect that reasonably foreseeable changes impacting the auditing profession and securities markets could have on program levels; and a discussion of the impact that program levels and changes in methods of program delivery, including advances in technology, could have on program operations and administration.\n\n(10)  Supplemental budget  means a budget or amendment thereto submitted to the Commission for approval subsequent to Commission approval of the budget for the budget year, when:\n\n(i) There is a need for additional funds in a program area;\n\n(ii) Resources are to be applied in a manner not fairly implied in the Commission-approved budget and budget justification, such as when programs are created to perform functions that are not, or to perform functions in a way that is not, fairly implied from the Commission-approved budget and budget justification; or\n\n(iii) Programs described in the Commission-approved budget and budget justification are to be eliminated.\n\n(c)  Timetable.  The timetable for preparation and submission of the annual budget is as follows:\n\n(d)  Contents of budget.  (1) To facilitate Commission review and approval, each budget (including each preliminary budget and budget submitted for Commission approval) shall:\n\n(i) Be accompanied by a budget justification.\n\n(ii) Include information for the budget year, the current year, and the year immediately preceding the current year, regarding actual or projected spending by program area, receipts, debt, and employment levels.\n\n(iii) Be consistent with, or explain any deviations from, the economic assumptions and budgetary guidance provided by the Commission.\n\n(iv) Include statements of PCAOB programs, initiatives and strategies for the budget year.\n\n(v) Earmark each amount for a specific budget category within a program area.\n\n(vi) Include planned beginning-of-year and end-of-year headcounts for each program area.\n\n(2) Each budget submitted for Commission approval shall be consistent with the preliminary budget and any revisions proposed by the Commission when the budget was passed from the Commission back to the PCAOB or explain any changes from the preliminary budget and/or such proposed revisions.\n\n(3) In addition to amounts needed to fund disbursements during the budget year, a budget may reflect receipts in amounts needed to fund expected disbursements during a period not to exceed the first five months of the fiscal year immediately following the budget year (the working capital reserve), provided such amounts shall be disbursed only as specified in the following year's budget or in a supplemental budget approved by the Commission.\n\n(4) In approving the budget the Commission may not change the amounts earmarked for programs, program areas, or activities, or any other aspects of the budget; provided, that if the budget is conditionally rather than finally approved, then the Commission may transmit to the Board such proposed changes as are consistent with the preliminary budget and any revisions previously proposed by the Commission when it passed the budget back to the PCAOB. No proposed reduction or increase may be greater than that included in the preliminary budget and any revisions previously proposed by the Commission when it passed the budget back to the PCAOB.\n\n(5) In the event the budget is conditionally approved by the Commission, the PCAOB shall have the opportunity to consider the changes proposed by the Commission and to vote again for final approval of the budget as amended. If this iterative process has not resolved differences between the Commission and the PCAOB by December 23, then the terms of the most recent conditional approval shall become final, and the budget shall be deemed finally approved.\n\n(e)  Limitation on spending.  (1) The PCAOB shall not spend in a budget year more than the amount specified in the Commission-approved PCAOB budget for that year, regardless of the source of the funds, unless such expenses have been approved by the Commission through a supplemental budget request.\n\n(2) Funds may be disbursed by the PCAOB only in accordance with the Commission approved budget,  provided however , during the budget year the PCAOB may transfer amounts totaling not more than $1,000,000 into or out of each program area without prior Commission approval. Further, the PCAOB shall not:\n\n(i) Apply its resources in a manner not fairly implied in the Commission-approved budget and budget justification, such as to create programs to perform functions that are not, or to perform functions in a way that is not, fairly implied from the Commission-approved budget and budget justification, or\n\n(ii) Eliminate programs described in the Commission-approved budget and budget justification.\n\n(3) In the event that the Commission has not approved a budget for a PCAOB fiscal year before the beginning of that fiscal year, the PCAOB may spend funds from the reserve and continue to incur obligations as if the PCAOB budget or supplemental budget most recently approved by the Commission were continuing in effect for that fiscal year.\n\n(f)  Supplemental budget.  (1) The PCAOB may submit to the Commission a request for approval of a supplemental budget subsequent to Commission approval of the budget for the budget year in order to spend any amounts in excess of, or contrary to, the limitations described in paragraphs (e)(1) and (e)(2) of this section.\n\n(2) To facilitate Commission review and approval, a supplemental budget shall include:\n\n(i) Detailed information regarding the impact of the supplemental budget on each affected program area, including costs by cost category, project or activity;\n\n(ii) A statement regarding how the supplemental budget facilitates the strategic and policy goals of the PCAOB;\n\n(iii) Information indicating why the amount was not included in the budget for the current year, including a description of any subsequent and unforeseen events or circumstances necessitating the supplemental budget request;\n\n(iv) Information indicating why the request should not or cannot be postponed until the next regular annual budget process; and\n\n(v) The proposed source for the funds, including any offsets to be made elsewhere in the PCAOB's programs and activities.\n\n(g)  Maintenance of records; reports.  (1) The PCAOB shall maintain, and make available to the Commission or Commission staff upon request, a strategic plan and records in reasonable detail that support each preliminary budget, budget, budget justification, supplemental budget and other report or communication in compliance with this section, including past and projected receipts, outlays, obligations, and employment levels.\n\n(2) The PCAOB is required to maintain and, within 30 business days after the end of each fiscal quarter, to furnish to the Commission a report of its spending and staffing levels for the quarter just ended, comparing those levels to the levels in the Commission approved budget.\n\n(h)  Publication of budget.  (1) Following submission of the PCAOB-approved budget to the Commission, such budget and budget justification, subject to any applicable exemption under the Freedom of Information Act, shall be made available to the public. Neither the Commission nor the PCAOB shall publish a preliminary budget, budget, budget justification, or any underlying materials in connection therewith, until such time as the budget is approved by the PCAOB and submitted to the Commission for its approval.\n\n(2) Supplemental budgets shall be made public, following approval by the PCAOB and submission to the Commission, in the same manner as described in paragraph (h)(1) of this section.\n\n(3) The Commission-approved budget shall be made available to the public at the time of such approval.\n\n(i)  Waivers of rule provisions.  The Commission, in its discretion, may waive compliance with any provision of this \u00a7 202.11."], ["20:20:1.0.2.8.3.0.155.1", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.1 Statutory provisions.", "SSA", "", "", "[4 FR 1478, Apr. 7, 1939, as amended by Board Order 41-526, 7 FR 96, Jan. 6, 1942]", "The term \u201cemployer\u201d means any carrier (as defined in subsection 1(m) of this section), and any company which is directly or indirectly owned or controlled by one or more such carriers or under common control therewith, and which operates any equipment or facility or performs any service (except trucking service, casual service, and the casual operation of equipment or facilities) in connection with the transportation of passengers or property by railroad, or the receipt, delivery, elevation, transfer in transit, refrigeration or icing, storage, or handling of property transported by railroad, and any receiver, trustee, or other individual or body, judicial or otherwise, when in the possession of the property or operating all or any part of the business of any such employer:  Provided, however,  That the term \u201cemployer\u201d shall not include any street, interurban, or suburban electric railway, unless such railway is operating as a part of a general steam-railroad system of transportation, but shall not exclude any part of the general steam-railroad system now or hereafter operated by any other motive power. The Interstate Commerce Commission is hereby authorized and directed upon request of the Board, or upon complaint of any party interested, to determine after hearing whether any line operated by electric power falls within the terms of this proviso. The term \u201cemployer\u201d shall also include railroad associations, traffic associations, tariff bureaus, demurrage bureaus, weighing and inspection bureaus, collection agencies and other associations, bureaus, agencies, or organizations controlled and maintained wholly or principally by two or more employers as hereinbefore defined and engaged in the performance of services in connection with or incidental to railroad transportation; and railway labor organizations, national in scope, which have been or may be organized in accordance with the provisions of the Railway Labor Act, as amended, and their State and National legislative committees and their general committees and their insurance departments and their local lodges and divisions, established pursuant to the constitution and by-laws of such organizations. (Sec. 1 (a), 50 Stat. 307; 45 U. S. C. 228a (a))\n \n The term \u201cemployer\u201d shall not include any company by reason of its being engaged in the mining of coal, the supplying of coal to an employer where delivery is not beyond the mine tipple, and the operation of equipment or facilities therefore, or in any of such activities. (54 Stat. 785; 45 U.S.C. 228a (a))\n\nThe term \u201cemployer\u201d means any carrier (as defined in subsection 1(m) of this section), and any company which is directly or indirectly owned or controlled by one or more such carriers or under common control therewith, and which operates any equipment or facility or performs any service (except trucking service, casual service, and the casual operation of equipment or facilities) in connection with the transportation of passengers or property by railroad, or the receipt, delivery, elevation, transfer in transit, refrigeration or icing, storage, or handling of property transported by railroad, and any receiver, trustee, or other individual or body, judicial or otherwise, when in the possession of the property or operating all or any part of the business of any such employer:  Provided, however,  That the term \u201cemployer\u201d shall not include any street, interurban, or suburban electric railway, unless such railway is operating as a part of a general steam-railroad system of transportation, but shall not exclude any part of the general steam-railroad system now or hereafter operated by any other motive power. The Interstate Commerce Commission is hereby authorized and directed upon request of the Board, or upon complaint of any party interested, to determine after hearing whether any line operated by electric power falls within the terms of this proviso. The term \u201cemployer\u201d shall also include railroad associations, traffic associations, tariff bureaus, demurrage bureaus, weighing and inspection bureaus, collection agencies and other associations, bureaus, agencies, or organizations controlled and maintained wholly or principally by two or more employers as hereinbefore defined and engaged in the performance of services in connection with or incidental to railroad transportation; and railway labor organizations, national in scope, which have been or may be organized in accordance with the provisions of the Railway Labor Act, as amended, and their State and National legislative committees and their general committees and their insurance departments and their local lodges and divisions, established pursuant to the constitution and by-laws of such organizations. (Sec. 1 (a), 50 Stat. 307; 45 U. S. C. 228a (a))\n\nThe term \u201cemployer\u201d shall not include any company by reason of its being engaged in the mining of coal, the supplying of coal to an employer where delivery is not beyond the mine tipple, and the operation of equipment or facilities therefore, or in any of such activities. (54 Stat. 785; 45 U.S.C. 228a (a))"], ["20:20:1.0.2.8.3.0.155.10", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.10 Commencement of employer status of receiver or trustee, etc.", "SSA", "", "", "", "A receiver, trustee, or other individual or body, judicial or otherwise, in the possession of the property or operating all or any part of the business of a carrier, or of a company or person owned or controlled by or under common control with such a carrier, which operates any equipment or facility or performs any service in connection with the transportation of passengers or property by railroad, shall be deemed to be an employer beginning as of whichever of the following three dates is the earliest:\n\n(a) The date that it takes possession of such property; or\n\n(b) The first date on which it has authority to operate all or any part of the business of such a carrier, company or person; or\n\n(c) The date that it begins operating without appointment or authorization all or any part of the business of such a carrier, company or person;\n\nProvided, however,  That the receiver, trustee, or other individual or body, judicial or otherwise, shall be an employer only with respect to such individuals as would be employees if the preceding employer had continued in the possession of the property or the operation of the business."], ["20:20:1.0.2.8.3.0.155.11", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.11 Termination of employer status.", "SSA", "", "", "[Board Order 41-85, 6 FR 1210, Mar. 1, 1941]", "The employer status of any company or person shall terminate whenever such company or person loses any of the characteristics essential to the existence of an employer status."], ["20:20:1.0.2.8.3.0.155.12", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.12 Evidence of termination of employer status.", "SSA", "", "", "[Board Order 41-85, 6 FR 1210, Mar. 1, 1941]", "(a) In determining whether a cessation of an essential characteristic, such as control or service in connection with railroad transportation, has occurred, consideration will be given only to those events or actions which evidence a final or complete cessation. Mere temporary periods of inactivity or failure to exercise functions or to operate equipment or facilities will not necessarily result in a loss of employer status.\n\n(b) The actual date of cessation of employer status shall be the date upon which final or complete cessation of an essential employer characteristic occurs. The following indicate but do not delimit the type of evidence that will be considered in determining the actual date of cessation of an employer status: stoppage of business or operations; the cancellation of tariffs, concurrences, or powers of attorney filed with the Interstate Commerce Commission; the effective date of a certificate permitting abandonment; the effective date of a pertinent judicial action such as the discharge of a receiver, trustee, or other judicial officer, or an order approving sale of equipment or machinery; the sale, transfer, or lease of property, equipment, or machinery essential to the continuance of an employer function or to control by a carrier employer; public or private notices of contemplated or scheduled abandonment or cessation of operations; termination of contract; discharge of last employee; date upon which the right of a railway labor organization to participate in the selection of labor members of the National Railroad Adjustment Board ceases or is denied; and date on which an employer, if a labor organization, ceases to represent or is denied the right to represent crafts or classes of employees in the railroad industry, or to promote the interests of employees in the railroad industry.\n\n(c) In the absence of evidence to the contrary the employer status of an existing company or person shall be presumed to continue, and in accordance with \u00a7 250.1(b) of this chapter it is the duty of each employer promptly to notify the Board of any change in operations affecting such company's status as an employer."], ["20:20:1.0.2.8.3.0.155.13", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.13 Electric railways.", "SSA", "", "", "[4 FR 1478, Apr. 7, 1939, as amended at 48 FR 51448, Nov. 9, 1983]", "(a) The Deputy General Counsel will require the submission of information pertaining to the history and operations of an electric railway with a view to determining whether it is an employer and will inquire into and make his recommendations upon the following considerations:\n\n(1) Whether the electric railway is more than a street, suburban or interurban electric railway; or\n\n(2) Whether it is operating as a part of a general steam-railroad system of transportation; or\n\n(3) Whether it is part of the national transportation system.\n\n(b) If in the opinion of the Deputy General Counsel an electric railway has the characteristic set forth in either paragraphs (a)(1), (2), or (a)(3) of this section, he will conclude that it is an employer under the act and if the operator concurs in such opinion, the decision will be made final by the Board. If the operator does not concur in the conclusion reached the question will be submitted to the Interstate Commerce Commission for determination."], ["20:20:1.0.2.8.3.0.155.14", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.14 Service incidental to railroad transportation.", "SSA", "", "", "", "An organization, association, bureau or agency is performing a service in connection with or incidental to railroad transportation whenever it is engaged in the performance of functions which would normally be performed by the constituent employers in the absence of such organization, association, bureau, or agency."], ["20:20:1.0.2.8.3.0.155.15", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.15 Railway labor organizations.", "SSA", "", "", "", "Railway labor organizations, national in scope, which have been or may be organized in accordance with the provisions of the Railway Labor Act, as amended, and their State and National legislative committees and their general committees and their insurance departments and their local lodges and divisions, established pursuant to the constitution and bylaws of such organizations, shall be employers within the meaning of the act.\n\n(a) An organization doing business on or after June 21, 1934, which establishes, in accordance with paragraph (a)(1), (2), or (3) of this section a right, under section 3 \u201cFirst\u201d (a) of the Railway Labor Act, as amended (48 Stat. 1189; 45 U.S.C. 153 \u201cFirst\u201d (a)), to participate in the selection of labor members of the National Railroad Adjustment Board, will be presumed, in the absence of clear and convincing evidence to the contrary, to be, from and after the date on which such right is thus established, a labor organization, national in scope and organized in accordance with the provisions of the Railway Labor Act, as amended. Such an organization can establish that it is an employer by establishing, in accordance with paragraph (b) of this section, that, as a labor organization, national in scope and organized in accordance with the provisions of the Railway Labor Act, as amended, it is a \u201crailway\u201d organization. An organization, doing business on or after June 21, 1934, which has not established such a right of participation, will be presumed not to be a labor organization, national in scope and organized in accordance with the provisions of the Railway Labor Act, as amended, and such presumption can be rebutted only by clear and convincing evidence satisfactory to the Board showing that the reasons for the organization's failure to establish such a right have no relation to its being a labor organization, national in scope and organized in accordance with the provisions of the Railway Labor Act, as amended. Only after such presumption has thus been rebutted will further evidence as to whether the organization is an employer be considered. (The establishment or nonestablishment of such a right of participation will not raise any presumption as to whether an organization is, or is not, a \u201crailway\u201d organization. The existence of this qualification shall be determined in accordance with paragraph (b) of this section.) An organization will have established such a right of participation if:\n\n(1) It has in fact participated in the selection of labor members of the National Railroad Adjustment Board and has continued to participate in such selection; or\n\n(2) It has been found, under section 3 \u201cFirst\u201d (f) of the Railway Labor Act, as amended (48 Stat. 1190; 45 U.S.C. 153 \u201cFirst\u201d (f)), to be qualified to participate in the selection of labor members of the National Railroad Adjustment Board; or\n\n(3) It is recognized by all organizations, qualified under paragraphs (a)(1) or (2) of this section, as having the right to participate in the selection of labor members of the National Railroad Adjustment Board.\n\n(b) The question as to whether a labor organization, national in scope, and organized in accordance with the provisions of the Railway Labor Act, as amended, is, as such a national labor organization, a \u201crailway\u201d labor organization, will be determined by the Board on the basis of considerations such as the following:\n\n(1) The extent to which it is, and has been recognized as, representative of crafts or classes of employees in the railroad industry.\n\n(2) The extent to which its purposes and business are and have been to promote the interests of employees in the railroad industry.\n\n(c) A labor organization which ceased doing business before June 21, 1934, will have been an employer if its characteristics were substantially the same as those of labor organizations, doing business on or after June 21, 1934, which are established as employers in accordance with paragraphs (a) and (b) of this section.\n\n(d) An organization which establishes, to the satisfaction of the Board, that it is a labor organization, as defined in paragraph (e) of this section, and that is composed of labor organizations which are established as employers in accordance with paragraphs (a), (b), and (c) of this section, is thereby established as being an employer.\n\n(e) For the purposes of the regulations in this chapter, a labor organization is an organization whose business is to promote the interests of employees in their capacity as employees, either directly or through their organizations."], ["20:20:1.0.2.8.3.0.155.2", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.2 Company or person principally engaged in carrier business.", "SSA", "", "", "", "Any company or person principally engaged in carrier business is an employer."], ["20:20:1.0.2.8.3.0.155.3", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.3 Company or person principally engaged in non-carrier business.", "SSA", "", "", "", "(a) With respect to any company or person principally engaged in business other than carrier business, but which, in addition to such principal business, engages in some carrier business, the Board will require submission of information pertaining to the history and all operations of such company or person with a view to determining whether some identifiable and separable enterprise conducted by the person or company is to be considered to be the employer. The determination will be made in the light of considerations such as the following:\n\n(1) The primary purpose of the company or person on and since the date it was established;\n\n(2) The functional dominance or subservience of its carrier business in relation to its non-carrier business;\n\n(3) The amount of its carrier business and the ratio of such business to its entire business;\n\n(4) Whether its carrier business is a separate and distinct enterprise.\n\n(b) In the event that the employer is found to be an aggregate of persons or legal entities or less than the whole of a legal entity or a person operating in only one of several capacities, then the unit or units competent to assume legal obligations shall be responsible for the discharge of the duties of the employer."], ["20:20:1.0.2.8.3.0.155.4", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.4 Control.", "SSA", "", "", "", "A company or person is controlled by one or more carriers, whenever there exists in one or more such carriers the right or power by any means, method or circumstance, irrespective of stock ownership to direct, either directly or indirectly, the policies and business of such a company or person and in any case in which a carrier is in fact exercising direction of the policies and business of such a company or person."], ["20:20:1.0.2.8.3.0.155.5", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.5 Company or person under common control.", "SSA", "", "", "", "A company or person is under common control with a carrier, whenever the control (as the term is used in \u00a7 202.4) of such company or person is in the same person, persons, or company as that by which such carrier is controlled."], ["20:20:1.0.2.8.3.0.155.6", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.6 Casual service and the casual operation of equipment or facilities.", "SSA", "", "", "", "The service rendered or the operation of equipment or facilities by a controlled company or person in connection with the transportation of passengers or property by railroad is \u201ccasual\u201d whenever such service or operation is so irregular or infrequent as to afford no substantial basis for an inference that such service or operation will be repeated, or whenever such service or operation is insubstantial."], ["20:20:1.0.2.8.3.0.155.7", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.7 Service or operation in connection with railroad transportation.", "SSA", "", "", "", "The service rendered or the operation of equipment or facilities by persons or companies owned or controlled by or under common control with a carrier is in connection with the transportation of passengers or property by railroad, or the receipt, delivery, elevation, transfer in transit, refrigeration or icing, storage, or handling of property transported by railroad, if such service or operation is reasonably directly related, functionally or economically, to the performance of obligations which a company or person or companies or persons have undertaken as a common carrier by railroad, or to the receipt, delivery, elevation, transfer in transit, refrigeration or icing, storage, or handling of property transported by railroad."], ["20:20:1.0.2.8.3.0.155.8", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.8 Controlled company or person principally engaged in service or operation in connection with railroad transportation.", "SSA", "", "", "", "Any company or person owned or controlled by one or more carriers or under common control therewith, whose principal business is the operation of equipment or facilities or the performance of service (other than trucking service) in connection with the transportation of passengers or property by railroad, shall be an employer."], ["20:20:1.0.2.8.3.0.155.9", 20, "Employees' Benefits", "II", "B", "202", "PART 202\u2014EMPLOYERS UNDER THE ACT", "", "", "", "\u00a7 202.9 Controlled company or person not principally engaged in service or operation in connection with railroad transportation.", "SSA", "", "", "", "(a) With respect to any company or person owned or controlled by one or more carriers or under common control therewith, performing a service or operating equipment in connection with the transportation of passengers or property by railroad, or the receipt, delivery, elevation, transfer in transit, refrigeration or icing, storage, or handling of property transported by railroad, but which is principally engaged in some other business, the Board will require the submission of information pertaining to the history and all operations of such company or person with a view to determining whether it is an employer or whether some identifiable and separable enterprise conducted by the person or company is to be considered to be the employer, and will make a determination in the light of considerations such as the following:\n\n(1) The primary purpose of the company or person on and since the date it was established;\n\n(2) The functional dominance or subservience of its business which constitutes a service or operation of equipment or facilities in connection with the transportation of passengers or property by railroad in relation to its other business;\n\n(3) The amount of its business which constitutes a service or operation of equipment or facilities in connection with the transportation of passengers or property by railroad and the ratio of such business to its entire business;\n\n(4) Whether such service or operation is a separate and distinct enterprise;\n\n(5) Whether such service or operation is more than casual, as that term is defined in \u00a7 202.6.\n\n(b) In the event that the employer is found to be an aggregate of persons or legal entities or less than the whole of a legal entity or a person operating in only one of several capacities, then the unit or units competent to assume legal obligations shall be responsible for the discharge of the duties of the employer."], ["21:21:4.0.1.1.3.0.1.1", 21, "Food and Drugs", "I", "C", "202", "PART 202\u2014PRESCRIPTION DRUG ADVERTISING", "", "", "", "\u00a7 202.1 Prescription-drug advertisements.", "FDA", "", "", "[40 FR 14016, Mar. 27, 1975, as amended at 40 FR 58799, Dec. 18, 1975; 41 FR 48266, Nov. 2, 1976; 42 FR 15674, Mar. 22, 1977; 60 FR 38480, July 27, 1995; 72 FR 69119, Dec. 6, 2007; 88 FR 80983, Nov. 21, 2023]", "Prescription drug  as used in this section means any drug defined in section 503(b)(1) of the Federal Food, Drug, and Cosmetic Act or \u00a7 201.105 of this chapter, applicable to drugs intended for use by humans and to veterinary drugs, respectively.\n\n(a)(1) The ingredient information required by section 502(n) of the Federal Food, Drug, and Cosmetic Act shall appear together, without any intervening written, printed, or graphic matter, except the proprietary names of ingredients, which may be included with the listing of established names.\n\n(2) The order of listing of ingredients in the advertisement shall be the same as the order of listing of ingredients on the label of the product, and the information presented in the advertisement concerning the quantity of each such ingredient shall be the same as the corresponding information on the label of the product.\n\n(3) The advertisement shall not employ a fanciful proprietary name for the drug or any ingredient in such a manner as to imply that the drug or ingredient has some unique effectiveness or composition, when, in fact, the drug or ingredient is a common substance, the limitations of which are readily recognized when the drug or ingredient is listed by its established name.\n\n(4) The advertisement shall not feature inert or inactive ingredients in a manner that creates an impression of value greater than their true functional role in the formulation.\n\n(5) The advertisement shall not designate a drug or ingredient by a proprietary name that, because of similarity in spelling or pronunciation, may be confused with the proprietary name or the established name of a different drug or ingredient.\n\n(b)(1) If an advertisement for a prescription drug bears a proprietary name or designation for the drug or any ingredient thereof, the established name, if such there be, corresponding to such proprietary name or designation shall accompany such proprietary name or designation each time it is featured in the advertisement for the drug; but, except as provided below in this subparagraph, the established name need not be used with the proprietary name or designation in the running text of the advertisement. On any page of an advertisement in which the proprietary name or designation is not featured but is used in the running text, the established name shall be used at least once in the running text in association with such proprietary name or designation and in the same type size used in the running text:  Provided, however,  That if the proprietary name or designation is used in the running text in larger size type, the established name shall be used at least once in association with, and in type at least half as large as the type used for, the most prominent presentation of the proprietary name or designation in such running text. If any advertisement includes a column with running text containing detailed information as to composition, prescribing, side effects, or contraindications and the proprietary name or designation is used in such column but is not featured above or below the column, the established name shall be used at least once in such column of running text in association with such proprietary name or designation and in the same type size used in such column of running text:  Provided, however,  That if the proprietary name or designation is used in such column of running text in larger size type, the established name shall be used at least once in association with, and in type at least half as large as the type used for, the most prominent presentation of the proprietary name or designation in such column of running text. Where the established name is required to accompany or to be used in association with the proprietary name or designation, the established name shall be placed in direct conjunction with the proprietary name or designation, and the relationship between the proprietary name or designation and the established name shall be made clear by use of a phrase such as \u201cbrand of\u201d preceding the established name, by brackets surrounding the established name, or by other suitable means.\n\n(2) The established name shall be printed in letters that are at least half as large as the letters comprising the proprietary name or designation with which it is joined, and the established name shall have a prominence commensurate with the prominence with which such proprietary name or designation appears, taking into account all pertinent factors, including typography, layout, contrast, and other printing features.\n\n(c) In the case of a prescription drug containing two or more active ingredients, if the advertisement bears a proprietary name or designation for such mixture and there is no established name corresponding to such proprietary name or designation, the quantitative ingredient information required in the advertisement by section 502(n) of the act shall be placed in direct conjunction with the most prominent display of the proprietary name or designation. The prominence of the quantitative ingredient information shall bear a reasonable relationship to the prominence of the proprietary name.\n\n(d)(1) If the advertisement employs one proprietary name or designation to refer to a combination of active ingredients present in more than one preparation (the individual preparations differing from each other as to quantities of active ingredients and/or the form of the finished preparation) and there is no established name corresponding to such proprietary name or designation, a listing showing the established names of the active ingredients shall be placed in direct conjunction with the most prominent display of such proprietary name or designation. The prominence of this listing of active ingredients shall bear a reasonable relationship to the prominence of the proprietary name and the relationship between such proprietary name or designation, and the listing of active ingredients shall be made clear by use of such phrase as \u201cbrand of\u201d, preceding the listing of active ingredients.\n\n(2) The advertisement shall prominently display the name of at least one specific dosage form and shall have the quantitative ingredient information required by section 502(n) of the act in direct conjunction with such display. If other dosage forms are listed in the advertisement, the quantitative ingredient information for such dosage forms shall appear in direct conjunction and in equal prominence with the most prominent listing of the names of such dosage forms.\n\n(e) True statement of information in brief summary relating to side effects, contraindications, and effectiveness:\n\n(1)  When required.  All advertisements for any prescription drug, except advertisements described in paragraph (e)(2) of this section, must present a true statement of information in brief summary relating to side effects, contraindications (when used in this section, \u201cside effects, contraindications\u201d include side effects, warnings, precautions, and contraindications and include any such information under such headings as cautions, special considerations, important notes, etc.), and effectiveness.\n\n(i)  Broadcast advertisements.  Advertisements broadcast through media such as radio, television, or telephone communications systems must:\n\n(A) Include information relating to the major side effects and contraindications (\u201cmajor statement\u201d) of the advertised drugs in the audio or audio and visual parts of the presentation, unless required by paragraph (e)(1)(ii)(C) of this section to present the major statement using audio and text; and\n\n(B) Contain a brief summary of all necessary information related to side effects and contraindications, unless adequate provision is made for dissemination of the approved or permitted product labeling in connection with the broadcast presentation.\n\n(ii)  Human drug advertisements in television or radio format \u2014 Clear, conspicuous, and neutral manner.  For advertisements for prescription drugs intended for use by humans presented directly to consumers in television or radio format, the major statement must be presented in a clear, conspicuous, and neutral manner. The major statement is presented in a clear, conspicuous, and neutral manner if the following are met:\n\n(A) It is presented in consumer-friendly language and terminology that is readily understandable.\n\n(B) Its audio information, in terms of the volume, articulation, and pacing used, is at least as understandable as the audio information presented in the rest of the advertisement.\n\n(C) In advertisements in television format, it is presented concurrently using both audio and text (dual modality). To achieve dual modality:\n\n( 1 ) Either the text displays the verbatim key terms or phrases from the corresponding audio, or the text displays the verbatim complete transcript of the corresponding audio; and\n\n( 2 ) The text is displayed for a sufficient duration to allow it to be read easily. For purposes of the standard in this paragraph (e)(1)(ii)(C)( 2 ), the duration is considered sufficient if the text display begins at the same time and ends at approximately the same time as the corresponding audio.\n\n(D) In advertisements in television format, for the text portion of the major statement, the size and style of font, the contrast with the background, and the placement on the screen allow the information to be read easily.\n\n(E) During the presentation of the major statement, the advertisement does not include audio or visual elements, alone or in combination, that are likely to interfere with comprehension of the major statement.\n\n(2)  Exempt advertisements.  The following advertisements are exempt from the requirements of paragraph (e)(1) of this section under the conditions specified:\n\n(i)  Reminder advertisements.  Reminder advertisements are those which call attention to the name of the drug product but do not include indications or dosage recommendations for use of the drug product. These reminder advertisements shall contain only the proprietary name of the drug product, if any; the established name of the drug product, if any; the established name of each active ingredient in the drug product; and, optionally, information relating to quantitative ingredient statements, dosage form, quantity of package contents, price, the name and address of the manufacturer, packer, or distributor or other written, printed, or graphic matter containing no representation or suggestion relating to the advertised drug product. If the Commissioner finds that there is evidence of significant incidence of fatalities or serious injury associated with the use of a particular prescription drug, he may withdraw this exemption by so notifying the manufacturer, packer, or distributor of the drug by letter. Reminder advertisements, other than those solely intended to convey price information including, but not limited to, those subject to the requirements of \u00a7 200.200 of this chapter, are not permitted for a prescription drug product whose labeling contains a boxed warning relating to a serious hazard associated with the use of the drug product. Reminder advertisements which are intended to provide consumers with information concerning the price charged for a prescription for a drug product are exempt from the requirements of this section if they meet all of the conditions contained in \u00a7 200.200 of this chapter. Reminder advertisements, other than those subject to the requirements of \u00a7 200.200 of this chapter, are not permitted for a drug for which an announcement has been published pursuant to a review on the labeling claims for the drug by the National Academy of Sciences/National Research Council (NAS/NRC), Drug Efficacy Study Group, and for which no claim has been evaluated as higher than \u201cpossibly effective.\u201d If the Commissioner finds the circumstances are such that a reminder advertisement may be misleading to prescribers of drugs subject to NAS/NRC evaluation, such advertisements will not be allowed and the manufacturer, packer, or distributor will be notified either in the publication of the conclusions on the effectiveness of the drug or by letter.\n\n(ii)  Advertisements of bulk-sale drugs.  Advertisements of bulk-sale drugs that promote sale of the drug in bulk packages in accordance with the practice of the trade solely to be processed, manufactured, labeled, or repackaged in substantial quantities and that contain no claims for the therapeutic safety or effectiveness of the drug.\n\n(iii)  Advertisements of prescription-compounding drugs.  Advertisements of prescription-compounding drugs that promote sale of a drug for use as a prescription chemical or other compound for use by registered pharmacists in compounding prescriptions if the drug otherwise complies with the conditions for the labeling exemption contained in \u00a7 201.120 and the advertisement contains no claims for the therapeutic safety or effectiveness of the drug.\n\n(3)  Scope of information to be included; applicability to the entire advertisement.  (i) The requirement of a true statement of information relating to side effects, contraindications, and effectiveness applies to the entire advertisement. Untrue or misleading information in any part of the advertisement will not be corrected by the inclusion in another distinct part of the advertisement of a brief statement containing true information relating to side effects, contraindications, and effectiveness of the drug. If any part or theme of the advertisement would make the advertisement false or misleading by reason of the omission of appropriate qualification or pertinent information, that part or theme shall include the appropriate qualification or pertinent information, which may be concise if it is supplemented by a prominent reference on each page to the presence and location elsewhere in the advertisement of a more complete discussion of such qualification or information.\n\n(ii) The information relating to effectiveness is not required to include information relating to all purposes for which the drug is intended but may optionally be limited to a true statement of the effectiveness of the drug for the selected purpose(s) for which the drug is recommended or suggested in the advertisement. The information relating to effectiveness shall include specific indications for use of the drug for purposes claimed in the advertisement; for example, when an advertisement contains a broad claim that a drug is an antibacterial agent, the advertisement shall name a type or types of infections and microorganisms for which the drug is effective clinically as specifically as required, approved, or permitted in the drug package labeling.\n\n(iii) The information relating to side effects and contraindications shall disclose each specific side effect and contraindication (which include side effects, warnings, precautions, and contraindications and include any such information under such headings as cautions, special considerations, important notes, etc.; see paragraph (e)(1) of this section) contained in required, approved, or permitted labeling for the advertised drug dosage form(s):  Provided, however,\n\n( a ) The side effects and contraindications disclosed may be limited to those pertinent to the indications for which the drug is recommended or suggested in the advertisement to the extent that such limited disclosure has previously been approved or permitted in drug labeling conforming to the provisions of \u00a7\u00a7 201.100 or 201.105; and\n\n( b ) The use of a single term for a group of side effects and contraindications (for example, \u201cblood dyscrasias\u201d for disclosure of \u201cleukopenia,\u201d \u201cagranulocytosis,\u201d and \u201cneutropenia\u201d) is permitted only to the extent that the use of such a single term in place of disclosure of each specific side effect and contraindication has been previously approved or permitted in drug labeling conforming to the provisions of \u00a7\u00a7 201.100 or 201.105.\n\n(4)  Substance of information to be included in brief summary.  (i)( a ) An advertisement for a prescription drug covered by a new-drug application approved pursuant to section 505 of the act after October 10, 1962, or a prescription drug covered by a new animal drug application approved pursuant to section 512 of the act after August 1, 1969, or any approved supplement thereto, or for a prescription drug listed in the index pursuant to section 572 of the act, or any granted modification thereto, shall not recommend or suggest any use that is not in the labeling accepted in such approved new-drug application or supplement, new animal drug application or supplement, or new animal drug index listing or modification. The advertisement shall present information from labeling required, approved, permitted, or granted in a new-drug or new animal drug application or new animal drug index listing relating to each specific side effect and contraindication in such labeling that relates to the uses of the advertised drug dosage form(s) or shall otherwise conform to the provisions of paragraph (e)(3)(iii) of this section.\n\n( b ) If a prescription drug was covered by a new-drug application or a supplement thereto that became effective prior to October 10, 1962, an advertisement may recommend or suggest:\n\n( 1 ) Uses contained in the labeling accepted in such new-drug application and any effective, approved, or permitted supplement thereto.\n\n( 2 ) Additional uses contained in labeling in commercial use on October 9, 1962, to the extent that such uses did not cause the drug to be an unapproved \u201cnew drug\u201d as \u201cnew drug\u201d was defined in section 201(p) of the act as then in force, and to the extent that such uses would be permitted were the drug subject to paragraph (e)(4)(iii) of this section.\n\n( 3 ) Additional uses contained in labeling in current commercial use to the extent that such uses do not cause the drug to be an unapproved \u201cnew drug\u201d as defined in section 201(p) of the act as amended or a \u201cnew animal drug\u201d as defined in section 201(v) of the act as amended.\n\nThe advertisement shall present information from labeling required, approved, or permitted in a new-drug application relating to each specific side effect and contraindication in such labeling that relates to the uses of the advertised drug dosage form(s) or shall otherwise conform to the provisions of paragraph (e)(3)(iii) of this section.\n\n(ii) In the case of an advertisement for a prescription drug other than a drug the labeling of which causes it to be an unapproved \u201cnew drug\u201d and other than drugs covered by paragraph (e)(4)(i) of this section, an advertisement may recommend and suggest the drug only for those uses contained in the labeling thereof:\n\n( a ) For which the drug is generally recognized as safe and effective among experts qualified by scientific training and experience to evaluate the safety and effectiveness of such drugs; or\n\n( b ) For which there exists substantial evidence of safety and effectiveness, consisting of adequate and well-controlled investigations, including clinical investigations (as used in this section \u201cclinical investigations,\u201d \u201cclinical experience,\u201d and \u201cclinical significance\u201d mean in the case of drugs intended for administration to man, investigations, experience, or significance in humans, and in the case of drugs intended for administration to other animals, investigations, experience, or significance in the specie or species for which the drug is advertised), by experts qualified by scientific training and experience to evaluate the safety and effectiveness of the drug involved, on the basis of which it can fairly and responsibly be concluded by such experts that the drug is safe and effective for such uses; or\n\n( c ) For which there exists substantial clinical experience (as used in this section this means substantial clinical experience adequately documented in medical literature or by other data (to be supplied to the Food and Drug Administration, if requested)), on the basis of which it can fairly and responsibly be concluded by qualified experts that the drug is safe and effective for such uses; or\n\n( d ) For which safety is supported under any of the preceding clauses in paragraphs (e)(4)(iii) ( a ), ( b ), and ( c ) of this section and effectiveness is supported under any other of such clauses.\n\nThe advertisement shall present information relating to each specific side effect and contraindication that is required, approved, or permitted in the package labeling by \u00a7\u00a7 201.100 or 201.105 of this chapter of the drug dosage form(s) or shall otherwise conform to the provisions of paragraph (e)(3)(iii) of this section.\n\n(5)  \u201cTrue statement\u201d of information.  An advertisement does not satisfy the requirement that it present a \u201ctrue statement\u201d of information in brief summary relating to side effects, contraindications, and effectiveness if:\n\n(i) It is false or misleading with respect to side effects, contraindications, or effectiveness; or\n\n(ii) It fails to present a fair balance between information relating to side effects and contraindications and information relating to effectiveness of the drug in that the information relating to effectiveness is presented in greater scope, depth, or detail than is required by section 502(n) of the act and this information is not fairly balanced by a presentation of a summary of true information relating to side effects and contraindications of the drug;  Provided, however,  That no advertisement shall be considered to be in violation of this section if the presentation of true information relating to side effects and contraindications is comparable in depth and detail with the claims for effectiveness or safety.\n\n(iii) It fails to reveal facts material in the light of its representations or material with respect to consequences that may result from the use of the drug as recommended or suggested in the advertisement.\n\n(6)  Advertisements that are false, lacking in fair balance, or otherwise misleading.  An advertisement for a prescription drug is false, lacking in fair balance, or otherwise misleading, or otherwise violative of section 502(n) of the act, among other reasons, if it:\n\n(i) Contains a representation or suggestion, not approved or permitted for use in the labeling, that a drug is better, more effective, useful in a broader range of conditions or patients (as used in this section  patients  means humans and in the case of veterinary drugs, other animals), safer, has fewer, or less incidence of, or less serious side effects or contraindications than has been demonstrated by substantial evidence or substantial clinical experience (as described in paragraphs (e)(4)(ii) ( b ) and ( c ) of this section) whether or not such representations are made by comparison with other drugs or treatments, and whether or not such a representation or suggestion is made directly or through use of published or unpublished literature, quotations, or other references.\n\n(ii) Contains a drug comparison that represents or suggests that a drug is safer or more effective than another drug in some particular when it has not been demonstrated to be safer or more effective in such particular by substantial evidence or substantial clinical experience.\n\n(iii) Contains favorable information or opinions about a drug previously regarded as valid but which have been rendered invalid by contrary and more credible recent information, or contains literature references or quotations that are significantly more favorable to the drug than has been demonstrated by substantial evidence or substantial clinical experience.\n\n(iv) Contains a representation or suggestion that a drug is safer than it has been demonstrated to be by substantial evidence or substantial clinical experience, by selective presentation of information from published articles or other references that report no side effects or minimal side effects with the drug or otherwise selects information from any source in a way that makes a drug appear to be safer than has been demonstrated.\n\n(v) Presents information from a study in a way that implies that the study represents larger or more general experience with the drug than it actually does.\n\n(vi) Contains references to literature or studies that misrepresent the effectiveness of a drug by failure to disclose that claimed results may be due to concomitant therapy, or by failure to disclose the credible information available concerning the extent to which claimed results may be due to placebo effect (information concerning placebo effect is not required unless the advertisement promotes the drug for use by man).\n\n(vii) Contains favorable data or conclusions from nonclinical studies of a drug, such as in laboratory animals or in vitro, in a way that suggests they have clinical significance when in fact no such clinical significance has been demonstrated.\n\n(viii) Uses a statement by a recognized authority that is apparently favorable about a drug but fails to refer to concurrent or more recent unfavorable data or statements from the same authority on the same subject or subjects.\n\n(ix) Uses a quote or paraphrase out of context to convey a false or misleading idea.\n\n(x) Uses literature, quotations, or references that purport to support an advertising claim but in fact do not support the claim or have relevance to the claim.\n\n(xi) Uses literature, quotations, or references for the purpose of recommending or suggesting conditions of drug use that are not approved or permitted in the drug package labeling.\n\n(xii) Offers a combination of drugs for the treatment of patients suffering from a condition amenable to treatment by any of the components rather than limiting the indications for use to patients for whom concomitant therapy as provided by the fixed combination drug is indicated, unless such condition is included in the uses permitted under paragraph (e)(4) of this section.\n\n(xiii) Uses a study on normal individuals without disclosing that the subjects were normal, unless the drug is intended for use on normal individuals.\n\n(xiv) Uses \u201cstatistics\u201d on numbers of patients, or counts of favorable results or side effects, derived from pooling data from various insignificant or dissimilar studies in a way that suggests either that such \u201cstatistics\u201d are valid if they are not or that they are derived from large or significant studies supporting favorable conclusions when such is not the case.\n\n(xv) Uses erroneously a statistical finding of \u201cno significant difference\u201d to claim clinical equivalence or to deny or conceal the potential existence of a real clinical difference.\n\n(xvi) Uses statements or representations that a drug differs from or does not contain a named drug or category of drugs, or that it has a greater potency per unit of weight, in a way that suggests falsely or misleadingly or without substantial evidence or substantial clinical experience that the advertised drug is safer or more effective than such other drug or drugs.\n\n(xvii) Uses data favorable to a drug derived from patients treated with dosages different from those recommended in approved or permitted labeling if the drug advertised is subject to section 505 of the act, or, in the case of other drugs, if the dosages employed were different from those recommended in the labeling and generally recognized as safe and effective. This provision is not intended to prevent citation of reports of studies that include some patients treated with dosages different from those authorized, if the results in such patients are not used.\n\n(xviii) Uses headline, subheadline, or pictorial or other graphic matter in a way that is misleading.\n\n(xix) Represents or suggests that drug dosages properly recommended for use in the treatment of certain classes of patients or disease conditions are safe and effective for the treatment of other classes of patients or disease conditions when such is not the case.\n\n(xx) Presents required information relating to side effects or contraindications by means of a general term for a group in place of disclosing each specific side effect and contraindication (for example employs the term  blood dyscrasias  instead of \u201cleukopenia,\u201d \u201cagranulocytosis,\u201d \u201cneutropenia,\u201d etc.) unless the use of such general term conforms to the provisions of paragraph (e)(3)(iii) of this section.\n\nProvided, however,  That any provision of this paragraph shall be waived with respect to a specified advertisement as set forth in a written communication from the Food and Drug Administration on a petition for such a waiver from a person who would be adversely affected by the enforcement of such provision on the basis of a showing that the advertisement is not false, lacking in fair balance, or otherwise misleading, or otherwise violative of section 502(n) of the act. A petition for such a waiver shall set forth clearly and concisely the petitioner's interest in the advertisement, the specific provision of this paragraph from which a waiver is sought, a complete copy of the advertisement, and a showing that the advertisement is not false, lacking in fair balance, or otherwise misleading, or otherwise violative of section 502(n) of the act.\n\n(7)  Advertisements that may be false, lacking in fair balance, or otherwise misleading.  An advertisement may be false, lacking in fair balance, or otherwise misleading or otherwise violative of section 502(n) of the act if it:\n\n(i) Contains favorable information or conclusions from a study that is inadequate in design, scope, or conduct to furnish significant support for such information or conclusions.\n\n(ii) Uses the concept of \u201cstatistical significance\u201d to support a claim that has not been demonstrated to have clinical significance or validity, or fails to reveal the range of variations around the quoted average results.\n\n(iii) Uses statistical analyses and techniques on a retrospective basis to discover and cite findings not soundly supported by the study, or to suggest scientific validity and rigor for data from studies the design or protocol of which are not amenable to formal statistical evaluations.\n\n(iv) Uses tables or graphs to distort or misrepresent the relationships, trends, differences, or changes among the variables or products studied; for example, by failing to label abscissa and ordinate so that the graph creates a misleading impression.\n\n(v) Uses reports or statements represented to be statistical analyses, interpretations, or evaluations that are inconsistent with or violate the established principles of statistical theory, methodology, applied practice, and inference, or that are derived from clinical studies the design, data, or conduct of which substantially invalidate the application of statistical analyses, interpretations, or evaluations.\n\n(vi) Contains claims concerning the mechanism or site of drug action that are not generally regarded as established by scientific evidence by experts qualified by scientific training and experience without disclosing that the claims are not established and the limitations of the supporting evidence.\n\n(vii) Fails to provide sufficient emphasis for the information relating to side effects and contraindications, when such information is contained in a distinct part of an advertisement, because of repetition or other emphasis in that part of the advertisement of claims for effectiveness or safety of the drug.\n\n(viii) Fails to present information relating to side effects and contraindications with a prominence and readability reasonably comparable with the presentation of information relating to effectiveness of the drug, taking into account all implementing factors such as typography, layout, contrast, headlines, paragraphing, white space, and any other techniques apt to achieve emphasis.\n\n(ix) Fails to provide adequate emphasis (for example, by the use of color scheme, borders, headlines, or copy that extends across the gutter) for the fact that two facing pages are part of the same advertisement when one page contains information relating to side effects and contraindications.\n\n(x) In an advertisement promoting use of the drug in a selected class of patients (for example, geriatric patients or depressed patients), fails to present with adequate emphasis the significant side effects and contraindications or the significant dosage considerations, when dosage recommendations are included in an advertisement, especially applicable to that selected class of patients.\n\n(xi) Fails to present on a page facing another page (or on another full page) of an advertisement on more than one page, information relating to side effects and contraindications when such information is in a distinct part of the advertisement.\n\n(xii) Fails to include on each page or spread of an advertisement the information relating to side effects and contraindications or a prominent reference to its presence and location when it is presented as a distinct part of an advertisement.\n\n(xiii) Contains information from published or unpublished reports or opinions falsely or misleadingly represented or suggested to be authentic or authoritative.\n\n(f)-(i) [Reserved]\n\n(j)(1) No advertisement concerning a particular prescription drug may be disseminated without prior approval by the Food and Drug Administration if:\n\n(i) The sponsor or the Food and Drug Administration has received information that has not been widely publicized in medical literature that the use of the drug may cause fatalities or serious damage;\n\n(ii) The Commissioner (or in his absence the officer acting as Commissioner), after evaluating the reliability of such information, has notified the sponsor that the information must be a part of the advertisements for the drug; and\n\n(iii) The sponsor has failed within a reasonable time as specified in such notification to present to the Food and Drug Administration a program, adequate in light of the nature of the information, for assuring that such information will be publicized promptly and adequately to the medical profession in subsequent advertisements.\n\nIf the Commissioner finds that the program presented is not being followed, he will notify the sponsor that prior approval of all advertisements for the particular drug will be required. Nothing in this paragraph is to be construed as limiting the Commissioner's or the Secretary's rights, as authorized by law, to issue publicity, to suspend any new-drug application, to decertify any antibiotic, or to recommend any regulatory action.\n\n(2) Within a reasonable time after information concerning the possibility that a drug may cause fatalities or serious damage has been widely publicized in medical literature, the Food and Drug Administration shall notify the sponsor of the drug by mail that prior approval of advertisements for the drug is no longer necessary.\n\n(3) Dissemination of an advertisement not in compliance with this paragraph shall be deemed to be an act that causes the drug to be misbranded under section 502(n) of the act.\n\n(4) Any advertisement may be submitted to the Food and Drug Administration prior to publication for comment. If the advertiser is notified that the submitted advertisement is not in violation and, at some subsequent time, the Food and Drug Administration changes its opinion, the advertiser will be so notified and will be given a reasonable time for correction before any regulatory action is taken under this section. Notification to the advertiser that a proposed advertisement is or is not considered to be in violation shall be in written form.\n\n(5) The sponsor shall have an opportunity for a regulatory hearing before the Food and Drug Administration pursuant to part 16 of this chapter with respect to any determination that prior approval is required for advertisements concerning a particular prescription drug, or that a particular advertisement is not approvable.\n\n(k) An advertisement issued or caused to be issued by the manufacturer, packer, or distributor of the drug promoted by the advertisement and which is not in compliance with section 502(n) of the act and the applicable regulations thereunder shall cause stocks of such drug in possession of the person responsible for issuing or causing the issuance of the advertisement, and stocks of the drug distributed by such person and still in the channels of commerce, to be misbranded under section 502(n) of the act.\n\n(l)(1) Advertisements subject to section 502(n) of the act include advertisements in published journals, magazines, other periodicals, and newspapers, and advertisements broadcast through media such as radio, television, and telephone communication systems.\n\n(2) Brochures, booklets, mailing pieces, detailing pieces, file cards, bulletins, calendars, price lists, catalogs, house organs, letters, motion picture films, film strips, lantern slides, sound recordings, exhibits, literature, and reprints and similar pieces of printed, audio, or visual matter descriptive of a drug and references published (for example, the \u201cPhysicians Desk Reference\u201d) for use by medical practitioners, pharmacists, or nurses, containing drug information supplied by the manufacturer, packer, or distributor of the drug and which are disseminated by or on behalf of its manufacturer, packer, or distributor are hereby determined to be labeling as defined in section 201(m) of the act.\n\n(e) * * *\n\n(6) * * *\n\n(ii) Represents or suggests that a prescription drug is safer or more effective than another drug in some particular when the difference has not been demonstrated by substantial evidence. An advertisement for a prescription drug may not, either directly or by implication, e.g., by use of comparative test data or reference to published reports, represent that the drug is safer or more effective than another drug, nor may an advertisement contain a quantitative statement of safety or effectiveness ( a ) unless the representation has been approved as part of the labeling in a new drug application or biologic license, or ( b ) if the drug is not a new drug or biologic, unless the representation of safety or effectiveness is supported by substantial evidence derived from adequate and well-controlled studies as defined in \u00a7 314.111(a)(5)(ii) of this chapter, or unless the requirement for adequate and well-controlled studies is waived as provided in \u00a7 314.111(a)(5)(ii) of this chapter.\n\n(vii) Suggests, on the basis of favorable data or conclusions from nonclinical studies of a prescription drug, such as studies in laboratory animals or in vitro, that the studies have clinical significance, if clinical significance has not been demonstrated. Data that demonstrate activity or effectiveness for a prescription drug in animal or in vitro tests and have not been shown by adequate and well-controlled clinical studies to pertain to clinical use may be used in advertising except that ( a ), in the case of anti-infective drugs, in vitro data may be included in the advertisement, if data are immediately preceded by the statement \u201cThe following in vitro data are available but their clinical significance is unknown\u201d and (b), in the case of other drug classes, in vitro and animal data that have not been shown to pertain to clinical use by adequate and well-controlled clinical studies as defined in \u00a7 314.111(a)(5)(ii) of this chapter may not be used unless the requirement for adequate and well-controlled studies is waived as provided in \u00a7 314.111(a)(5)(ii) of this chapter."], ["24:24:2.1.1.2.3.1.37.1", 24, "Housing and Urban Development", "II", "B", "202", "PART 202\u2014APPROVAL OF LENDING INSTITUTIONS AND MORTGAGEES", "A", "Subpart A\u2014General Requirements", "", "\u00a7 202.1 Purpose.", "HUD", "", "", "", "This part establishes minimum standards and requirements for approval by the Secretary of lenders and mortgagees to participate in the Title I and Title II programs."], ["24:24:2.1.1.2.3.1.37.2", 24, "Housing and Urban Development", "II", "B", "202", "PART 202\u2014APPROVAL OF LENDING INSTITUTIONS AND MORTGAGEES", "A", "Subpart A\u2014General Requirements", "", "\u00a7 202.2 Definitions.", "HUD", "", "", "[62 FR 20082, Apr. 24, 1997, as amended at 62 FR 65181, Dec. 10, 1997; 75 FR 20731, Apr. 20, 2010]", "Act  means the National Housing Act (12 U.S.C. 1702  et seq. ).\n\nClaim  means a single family insured mortgage for which the Secretary pays an insurance claim within 24 months after the mortgage is insured.\n\nDefault  means a single family insured mortgage in default for 90 or more days within 24 months after the mortgage is insured.\n\nLender  or  Title I lender  means a financial institution that:\n\n(a) Holds a valid Title I Contract of Insurance and is approved by the Secretary under this part as a supervised lender under \u00a7 202.6, a nonsupervised lender under \u00a7 202.7, an investing lender under \u00a7 202.9, or a governmental or similar institution under \u00a7 202.10; or\n\n(b) Is under suspension or held a Title I contract that has been terminated but remains responsible for servicing or selling Title I loans that it holds and is authorized to file insurance claims on such loans.\n\nLoan  or  Title I loan  means a loan authorized for insurance under Title I of the Act.\n\nMortgage, Title II mortgage or insured mortgage  means a mortgage or loan insured under Title II or Title XI of the Act.\n\nMortgagee  or  Title II mortgagee  means a mortgage lender that is approved to participate in the Title II programs as a supervised mortgagee under \u00a7 202.6, a nonsupervised mortgagee under \u00a7 202.7, an investing mortgagee under \u00a7 202.9, or a governmental or similar institution under 202.10.\n\nMultifamily mortgagee  means a mortgagee approved to participate only in multifamily Title II programs, except that for purposes of \u00a7 202.8(b)(1) the term also means a mortgagee approved to participate in both single family and multifamily Title II programs.\n\nNormal rate  means the rate of defaults and claims on insured mortgages for the geographic area served by a HUD field office, or other area designated by the Secretary, in which a mortgagee originates mortgages.\n\nOrigination approval agreement  means the Secretary's agreement that a mortgagee is approved to originate single family insured mortgages.\n\nTitle I program(s)  means an insurance program or programs authorized by Title I of the Act.\n\nTitle II program(s)  means an insurance program or programs authorized by Title II or Title XI of the Act."], ["24:24:2.1.1.2.3.1.37.3", 24, "Housing and Urban Development", "II", "B", "202", "PART 202\u2014APPROVAL OF LENDING INSTITUTIONS AND MORTGAGEES", "A", "Subpart A\u2014General Requirements", "", "\u00a7 202.3 Approval status for lenders and mortgagees.", "HUD", "", "", "[62 FR 20082, Apr. 24, 1997, as amended at 62 FR 30225, June 2, 1997; 62 FR 65181, Dec. 10, 1997; 69 FR 75807, Dec. 17, 2004; 75 FR 20731, Apr. 20, 2010; 78 FR 57060, Sept. 17, 2013]", "(a)  Initial approval.  A lender or mortgagee may be approved for participation in the Title I or Title II programs upon filing a request for approval on a form prescribed by the Secretary and signed by the applicant. The approval form shall be accompanied by such documentation as may be prescribed by the Secretary.\n\n(1) Approval is signified by:\n\n(i) The Secretary's agreement that the lender or mortgagee is considered approved under the Title I or Title II programs, except as otherwise ordered by the Mortgagee Review Board or an officer or subdivision of the Department to which the Mortgagee Review Board has delegated its power, unless the lender or mortgagee voluntarily relinquishes its approval;\n\n(ii) Consent by the lender or mortgagee to comply at all times with the general approval requirements of \u00a7 202.5, and with additional requirements governing the particular class of lender or mortgagee for which it was approved as described under subpart B at \u00a7\u00a7 202.6 through 202.10; and\n\n(iii) Under the Title I program, the issuance of a Contract of Insurance constitutes an agreement between the Secretary and the lender and which governs participation in the Title I program.\n\n(2) Limitations on approval:\n\n(i) Separate approval as lender or mortgagee is required for participation in the Title I or Title II programs, respectively. Application must be made, and approval will be granted, on the basis of one or both categories of programs, as is appropriate.\n\n(ii) Separate approval as mortgagee is required for the Single Family Mortgage Insurance Programs and for the Multifamily Mortgage Insurance Programs. Application must be made, and approval will be granted, on the basis of either or both categories, as is appropriate.\n\n(iii) In addition to the requirements for approval as a Title II mortgagee, the Secretary may from time to time issue eligibility requirements for participation in specific programs, such as the Direct Endorsement program.\n\n(iv) A Title II mortgagee may be approved to operate either on a nationwide basis or on a geographically restricted basis in only those areas designated by the Secretary.\n\n(v) A Title I lender may originate loans or purchase advances of credit only within a geographic lending area approved by the Secretary. Expansion of this lending area shall be subject to a determination by the Secretary that the lender is able to originate loans in compliance with part 201 of this chapter within such expanded area.\n\n(3)  Authorized agents.  A mortgagee approved under \u00a7\u00a7 202.6, 202.7, or 202.10 as a nonsupervised mortgagee, supervised mortgagee, or governmental or similar institution approved as a Direct Endorsement mortgagee under 24 CFR 203.3 may, with the approval of the Secretary, designate a nonsupervised or supervised mortgagee with Direct Endorsement approval under 24 CFR 203.3 as authorized agent for the purpose of underwriting loans. The application for mortgage insurance may be submitted in the name of the FHA-approved mortgagee or its designated authorized agent under this paragraph.\n\n(b)  Recertification.  On each anniversary of the approval of a lender or mortgagee, the Secretary will determine whether recertification, i.e., continued approval, is appropriate. The Secretary will review the yearly verification report required by \u00a7 202.5(m) and other pertinent documents, ascertain that all application and annual fees have been paid, and request any further information needed to decide upon recertification.\n\n(c)  Termination \u2014(1)  Termination of the Title I Contract of Insurance \u2014(i)  Notice.  A Contract of Insurance may be terminated in accordance with its terms by the Secretary or by the Secretary's designee upon giving the lender at least 5 days prior written notice.\n\n(ii)  Informal meeting.  If requested, and before expiration of the 5-day notice period, a lender shall be entitled to an informal meeting with the Department official taking action to terminate the Contract of Insurance.\n\n(iii)  Effect of termination.  Termination of a Contract of Insurance shall not affect:\n\n(A) The Department's obligation to provide insurance coverage with respect to eligible loans originated before the termination, unless there was fraud or misrepresentation;\n\n(B) A lender's obligation to continue to pay insurance charges or premiums and meet all other obligations, including servicing, associated with eligible loans originated before termination; or\n\n(C) A lender's right to apply for and be granted a new Title I Contract of Insurance, provided that the requirements for approval under this part are met.\n\n(2)  Credit Watch Termination \u2014(i)  Scope and frequency of review.  The Secretary will review, on an ongoing basis, the number of defaults and claims on mortgages originated, underwritten, or both, by each mortgagee in the geographic area served by a HUD field office. HUD will make this rate information available to mortgagees and the public through electronic means and will issue instructions for accessing this information through a Mortgagee Letter. For this purpose, and for all purposes under paragraph (c) of this section, a mortgage is considered to be originated in the same federal fiscal year in which its amortization commences. The Secretary may also review the insured mortgage performance of a mortgagee's branch offices individually and may terminate the authority of the branch or the authority of the mortgagee's overall operation.\n\n(ii)  Credit Watch Status.  Mortgagees are responsible for monitoring their default and claim rate performance. A mortgagee is considered to be on Credit Watch Status if, at any time, the mortgagee has a rate of defaults and claims on insured mortgages originated, underwritten, or both, in an area which exceeds 150 percent of the normal rate and its origination approval agreement has not been terminated.\n\n(iii)  Notice of termination \u2014(A)  Notice of termination of origination approval agreement.  The Secretary may notify a mortgagee that its origination approval agreement will terminate 60 days after notice is given, if the mortgagee had a rate of defaults and claims on insured mortgages originated in an area which exceeded 200 percent of the normal rate and exceeded the national default and claim rate for insured mortgages.\n\n(B)  Notice of termination of direct endorsement approval.  The Secretary may notify a mortgagee that its direct endorsement approval under 24 CFR part 203 will terminate 60 days after notice is given, if the mortgagee had a rate of defaults and claims on insured mortgages underwritten in an area which exceeded 200 percent of the normal rate and exceeded the national default and claim rate for insured mortgages. The termination of a mortgagee's direct endorsement approval pursuant to this section is separate and apart from the termination of a mortgagee's direct endorsement approval under 24 CFR part 203.\n\n(C)  No need for prior action by Mortgagee Review Board.  The termination notices described in paragraphs (c)(2)(ii)(A) and (B) of this section may be given without prior action by the Mortgagee Review Board.\n\n(D)  Underserved areas.  Before the Secretary sends the termination notice, the Secretary shall review the Census tract concentrations of the defaults and claims. If the Secretary determines that the excessive rate is the result of mortgage lending in underserved areas, as defined in 24 CFR 81.2, the Secretary may determine not to terminate the mortgagee's origination approval agreement and/or direct endorsement approval.\n\n(iv)  Request for informal conference.  Prior to termination the mortgagee may submit a written request for an informal conference with the Deputy Assistant Secretary for Single Family Housing or that official's designee. HUD must receive the written request no later than 30 calendar days after the date of the proposed termination notice. Unless HUD grants an extension, the informal conference must be held no later than 60 calendar days after the date of the proposed termination notice. After considering relevant reasons and factors beyond the mortgagee's control that contributed to the excessive default and claim rates, the Deputy Assistant Secretary for Single Family Housing or designee may withdraw the termination notice.\n\n(v)  Limitation on the establishment of new branches.  Upon receipt of a proposed termination notice of its origination approval agreement, the mortgagee shall not establish a new branch or new branches for the origination of FHA-insured mortgages in the area or areas that are covered by the proposed termination notice. As of January 18, 2005, a mortgagee that is in receipt of a notice of proposed termination may not establish any new branch in the location or locations cited in the proposed termination notice until either:\n\n(A) The proposed termination notice is withdrawn or\n\n(B) The Secretary reinstates the mortgagee's origination approval agreement, in accordance with paragraph (e) of this section.\n\n(vi)  Effects of termination \u2014(A)  Termination of origination approval agreement.  If a mortgagee's origination approval agreement is terminated, it may not originate single family insured mortgages unless the origination approval agreement is reinstated by the Secretary in accordance with paragraph (e) of this section, notwithstanding any other provision of this part except \u00a7 202.3(c)(2)(vii)(A).\n\n(B)  Termination of direct endorsement approval.  If a mortgagee's direct endorsement approval is terminated, it may not underwrite single family insured mortgages for the area(s) identified in the termination notice, unless the direct endorsement approval is reinstated by the Secretary in accordance with paragraph (e) of this section, notwithstanding any other provision of this part except \u00a7 202.3(c)(2)(vii)(A).\n\n(vii)  Rights and obligations in the event of termination.  Termination of the origination approval agreement and/or direct endorsement approval shall not affect:\n\n(A) The eligibility of the mortgage for insurance, absent fraud or misrepresentation, if the mortgagor and all terms and conditions of the mortgage had been approved before the termination by the Direct Endorsement or Lender Insurance mortgagee or were covered by a firm commitment issued by the Secretary; however, no other mortgages originated or underwritten after the date of termination by the mortgagee shall be insured unless the mortgagee's origination approval agreement and/or direct endorsement approval is reinstated by the Secretary;\n\n(B) The right of a mortgagee whose direct endorsement approval has been terminated to transfer cases to another mortgagee with direct endorsement approval for the area covered by the termination.\n\n(C) A mortgagee's obligation to continue to pay insurance premiums and meet all other obligations, including servicing, associated with insured mortgages;\n\n(D) A mortgagee's right to apply for reinstatement of the origination approval agreement and/or direct endorsement approval in accordance with paragraph (e) of this section; or\n\n(E) A mortgagee's right to purchase insured mortgages or to service its own portfolio or the portfolios of other mortgagees with which it has a servicing contract.\n\n(d)  Withdrawal and suspension of approval.  Lender or mortgagee approval may be suspended or withdrawn by the Mortgagee Review Board as provided in part 25 of this title.\n\n(e)  Reinstatement \u2014(1)  General.  A mortgagee whose origination approval agreement and/or direct endorsement approval has been terminated under paragraph (c) of this section may apply for reinstatement if:\n\n(i) The origination approval agreement and/or direct endorsement approval for the affected branch or branches has been terminated for at least six months; and\n\n(ii) The mortgagee continues to be an approved mortgagee meeting the general standards of \u00a7 202.5 and the specific requirements of \u00a7\u00a7 202.6, 202.7, 202.8 or 202.10, and 202.12.\n\n(2)  Application for reinstatement.  The mortgagee's application for reinstatement must:\n\n(i) Be in a format prescribed by the Secretary and signed by the mortgagee;\n\n(ii) Be accompanied by an independent analysis of the terminated office's operations and identifying the underlying cause of the mortgagee's unacceptable default and claim rate. The independent analysis must be prepared by an independent Certified Public Accountant (CPA) qualified to perform audits under the government auditing standards issued by the General Accounting Office; and\n\n(iii) Be accompanied by a corrective action plan addressing each of the issues identified in the independent analysis described in paragraph (e)(2)(ii) of this section, along with evidence demonstrating that the mortgagee has implemented the corrective action plan.\n\n(3)  HUD action on reinstatement application.  The Secretary will grant the mortgagee's application for reinstatement if the mortgagee's application is complete and the Secretary determines that the underlying causes for the termination have been satisfactorily remedied."], ["24:24:2.1.1.2.3.1.37.4", 24, "Housing and Urban Development", "II", "B", "202", "PART 202\u2014APPROVAL OF LENDING INSTITUTIONS AND MORTGAGEES", "A", "Subpart A\u2014General Requirements", "", "\u00a7 202.4 Request for determination of compliance.", "HUD", "", "", "", "Pursuant to section 539(a) of the Act, any person may file a request that the Secretary determine whether a lender or mortgagee is in compliance with \u00a7 202.12(a) or with provisions of this chapter implementing sections 223(a)(7) and 535 of the Act such as \u00a7\u00a7 201.10(g), 203.18d and 203.43(c)(5) of this chapter (only section 535 applies to lenders). The request for determination shall be made to the following address: Department of Housing and Urban Development, Office of Lender Activities and Program Compliance, 451 Seventh Street SW., Washington, DC, 20410. The Secretary shall inform the requestor of the disposition of the request. The Secretary shall publish in the  Federal Register  the disposition of any case referred by the Secretary to the Mortgagee Review Board."], ["24:24:2.1.1.2.3.1.37.5", 24, "Housing and Urban Development", "II", "B", "202", "PART 202\u2014APPROVAL OF LENDING INSTITUTIONS AND MORTGAGEES", "A", "Subpart A\u2014General Requirements", "", "\u00a7 202.5 General approval standards.", "HUD", "", "", "[75 FR 20732, Apr. 20, 2010; 75 FR 23582, May 4, 2010; 77 FR 51468, Aug. 24, 2012; 78 FR 57060, Sept. 17, 2013; 89 FR 7277, Feb. 2, 2024; 89 FR 30276, Apr. 23, 2024]", "To be approved for participation in the Title I or Title II programs, and to maintain approval, a lender or mortgagee shall meet and continue to meet the general requirements of paragraphs (a) through (n) of this section (except as provided in \u00a7 202.10(b)) and the requirements for one of the eligible classes of lenders or mortgagees in \u00a7\u00a7 202.6 through 202.10.\n\n(a)  Business form.  (1) The lender or mortgagee shall be a corporation or other chartered institution, a permanent organization having succession, or a partnership. A partnership must meet the requirements of paragraphs (a)(1)(i) through (iv) of this section.\n\n(i) Each general partner must be a corporation or other chartered institution consisting of two or more persons.\n\n(ii) One general partner must be designated as the managing general partner. The managing general partner shall comply with the requirements of paragraphs (b), (c), and (f) of this section. The managing general partner must have as its principal activity the management of one or more partnerships, all of which are mortgage lenders or property improvement or manufactured home lenders, and must have exclusive authority to deal directly with the Secretary on behalf of each partnership. Newly admitted partners must agree to the management of the partnership by the designated managing general partner. If the managing general partner withdraws or is removed from the partnership for any reason, a new managing general partner shall be substituted, and the Secretary shall be immediately notified of the substitution.\n\n(iii) The partnership agreement shall specify that the partnership shall exist for the minimum term of years required by the Secretary. All insured mortgages and Title I loans held by the partnership shall be transferred to a lender or mortgagee approved under this part prior to the termination of the partnership. The partnership shall be specifically authorized to continue its existence if a partner withdraws.\n\n(iv) The Secretary must be notified immediately of any amendments to the partnership agreement that would affect the partnership's actions under the Title I or Title II programs.\n\n(2)  Use of business name.  The lender or mortgagee must use its HUD-registered business name in all advertisements and promotional materials related to FHA programs. HUD-registered business names include any alias or \u201cdoing business as\u201d (DBA) on file with FHA. The lender or mortgagee must keep copies of all print and electronic advertisements and promotional materials for a period of 2 years from the date that the materials are circulated or used to advertise.\n\n(3)  Non-FHA-approved entities.  A lender or mortgagee that accepts a loan application from a non-FHA-approved entity must confirm that the entity's legal name and Tax ID number are included in the FHA loan origination system record for the subject loan. The loan to be insured by FHA must be underwritten by the FHA-approved lender or mortgagee.\n\n(b)  Employees.  The lender or mortgagee shall employ competent personnel trained to perform their assigned responsibilities in consumer or mortgage lending, including origination, servicing, and collection activities, and shall maintain adequate staff and facilities to originate and service mortgages or Title I loans, in accordance with applicable regulations, to the extent the mortgagee or lender engages in such activities.\n\n(c)  Officers.  All employees who will sign applications for mortgage insurance on behalf of the mortgagee or report loans for insurance shall be corporate officers or shall otherwise be authorized to bind the lender or mortgagee in the origination transaction. The lender or mortgagee shall ensure that an authorized person reports all originations, purchases, and sales of Title I loans or Title II mortgages to the Secretary for the purpose of obtaining or transferring insurance coverage.\n\n(d)  Escrows.  The lender or mortgagee shall not use escrow funds for any purpose other than that for which they were received. It shall segregate escrow commitment deposits, work completion deposits, and all periodic payments received under loans or insured mortgages on account of ground rents, taxes, assessments, and insurance charges or premiums, and shall deposit such funds with one or more financial institutions in a special account or accounts that are fully insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration, except as otherwise provided in writing by the Secretary.\n\n(e)  Servicing.  A lender shall service or arrange for servicing of the loan in accordance with the requirements of 24 CFR part 201. A mortgagee shall service or arrange for servicing of the mortgage in accordance with the servicing responsibilities contained in subpart C of 24 CFR part 203 and in 24 CFR part 207, with all other applicable regulations contained in this title, and with such additional conditions and requirements as the Secretary may impose.\n\n(f)  Business changes.  The lender or mortgagee shall provide prompt notification to the Secretary, in such form as prescribed by the Secretary, of:\n\n(1) All changes in its legal structure, including, but not limited to, mergers, terminations, name, location, control of ownership, and character of business; and\n\n(2) Any officer, partner, director, principal, manager, supervisor, loan processor, loan underwriter, loan originator, of the lender or mortgagee, or the lender or mortgagee itself, that is subject to one or more of the sanctions in paragraph (j) of this section.\n\n(g)  Financial statements.  The lender or mortgagee shall:\n\n(1) Furnish to the Secretary a copy of its audited financial statements within 90 days of its fiscal year end, except as provided in \u00a7 202.6(c);\n\n(2) Furnish such other information as the Secretary may request; and\n\n(3) Submit to an examination of that portion of its records that relates to its Title I and/or Title II program activities.\n\n(h)  Quality control plan.  Lenders or mortgagees shall implement a written quality control plan, acceptable to the Secretary, that assures compliance with the regulations of this chapter and other issuances of the Secretary regarding loan or mortgage origination and servicing unless the lenders or mortgagees were approved under \u00a7 202.9 without servicing authority.\n\n(i)  Fees.  The lender or mortgagee, unless approved under \u00a7 202.10, shall pay an application fee and annual fees, including additional fees for each branch office that the lender or mortgagee registers with the Department, at such times and in such amounts as the Secretary may require. The Secretary may identify additional classes or groups of lenders or mortgagees that may be exempt from one or more of these fees.\n\n(j)  Ineligibility.  For a lender or mortgagee to be eligible for FHA approval, neither the lender or mortgagee, nor any officer, partner, director, principal, manager, supervisor, loan processor, loan underwriter, or loan originator of the lender or mortgagee shall:\n\n(1) Be suspended, debarred, under a limited denial of participation (LDP), or otherwise restricted under 2 CFR part 2424 or 24 CFR part 25, or under similar procedures of any other federal agency;\n\n(2) Be indicted for, or have been convicted of, an offense that reflects adversely upon the integrity, competency, or fitness to meet the responsibilities of the lender or mortgagee to participate in the Title I or Title II programs;\n\n(3) Be subject to unresolved findings as a result of HUD or other governmental audit, investigation, or review;\n\n(4) Be engaged in business practices that do not conform to generally accepted practices of prudent mortgagees or that demonstrate irresponsibility;\n\n(5) Be convicted of, or have pled guilty or  nolo contendere  to, a felony related to participation in the real estate or mortgage loan industry:\n\n(i) During the 7-year period preceding the date of the application for licensing and registration; or\n\n(ii) At any time preceding such date of application, if such felony involved an act of fraud, dishonesty, or a breach of trust or money laundering;\n\n(6) Be in violation of provisions of the Secure and Fair Enforcement (SAFE) Mortgage Licensing Act of 2008 (12 U.S.C. 5101  et seq. ) or any applicable provision of state law; or\n\n(7) Be in violation of any other requirement established by the Secretary.\n\n(k)  Branch offices.  A lender or mortgagee may, upon approval by the Secretary, maintain branch offices for the origination of Title I or Title II loans. The lender or mortgagee shall remain fully responsible to the Secretary for the actions of its branch offices.\n\n(l)  Conflict of interest and responsibility.  A mortgagee may not pay anything of value, directly or indirectly, in connection with any insured mortgage transaction or transactions to any person or entity if such person or entity has received any other consideration from the mortgagor, seller, builder, or any other person for services related to such transactions or related to the purchase or sale of the mortgaged property, except that consideration, approved by the Secretary, may be paid for services actually performed. The mortgagee shall not pay a referral fee to any person or organization.\n\n(m)  Reports.  Each lender and mortgagee must submit an annual certification on a form prescribed by the Secretary. Upon application for approval and with each annual recertification, each lender and mortgagee must submit a certification that it has not been refused a license and has not been sanctioned by any State or States in which it will originate, purchase, hold, sell, or service insured mortgages or Title I loans. In addition, each mortgagee shall file the following:\n\n(1) An audited or unaudited financial statement, within 30 days of the end of each fiscal quarter in which the mortgagee experiences an operating loss of 20 percent of its net worth, and until the mortgagee demonstrates an operating profit for 2 consecutive quarters or until the next recertification, whichever is the longer period; and\n\n(2) A statement of net worth within 30 days of the commencement of voluntary or involuntary bankruptcy, conservatorship, receivership, or any transfer of control to a federal or state supervisory agency.\n\n(n)  Net worth \u2014(1)  Applicability.  The requirements of paragraph (n) of this section apply to approved supervised and nonsupervised lenders and mortgagees under \u00a7\u00a7 202.6 and 202.7, and approved investing lenders and investing mortgagees under \u00a7 202.9. For ease of reference, these institutions are referred to as \u201capproved lenders or mortgagees\u201d for purposes of paragraph (n) of this section. These requirements also apply to applicants for FHA approval under \u00a7\u00a7 202.6, 202.7, and 202.9. For ease of reference, these institutions are referred to as \u201capplicants\u201d for purposes of paragraph (n) of this section.\n\n(2)  Requirements \u2014(i)  Single family net worth requirements.  Irrespective of size, each applicant and each approved lender or mortgagee for participation solely under the FHA single family programs shall have a net worth of not less than $1 million, plus an additional net worth of one percent of the total volume, in excess of $25 million, of FHA single family insured mortgages originated, underwritten, purchased, or serviced during the prior fiscal year, up to a maximum required net worth of $2.5 million. No less than 20 percent of the applicant's or approved lender's or mortgagee's required net worth must be liquid assets consisting of cash or its equivalent acceptable to the Secretary.\n\n(ii)  Multifamily net worth requirements.  Irrespective of size, each applicant for approval and each approved lender or mortgagee for participation solely under the FHA multifamily programs shall have a net worth of not less than $1 million. For those multifamily approved lenders or mortgagees that also engage in mortgage servicing, an additional net worth of one percent of the total volume, in excess of $25 million, of FHA multifamily mortgages originated, purchased, or serviced during the prior fiscal year, up to a maximum required net worth of $2.5 million. For multifamily approved lenders or mortgagees that do not perform mortgage servicing, an additional net worth of one half of one percent of the total volume, in excess of $25 million, of FHA multifamily mortgages originated during the prior fiscal year, up to a maximum required net worth of $2.5 million. No less than 20 percent of the applicant's or approved lender's or mortgagee's required net worth must be liquid assets consisting of cash or its equivalent acceptable to the Secretary.\n\n(iii)  Dual participation net worth requirements.  Irrespective of size, each applicant for approval and each approved lender or mortgagee that is a participant in both FHA single family and multifamily programs must meet the net worth requirements as set forth in paragraph (n)(2)(i) of this section."], ["24:24:2.1.1.2.3.2.37.1", 24, "Housing and Urban Development", "II", "B", "202", "PART 202\u2014APPROVAL OF LENDING INSTITUTIONS AND MORTGAGEES", "B", "Subpart B\u2014Classes of Lenders and Mortgagees", "", "\u00a7 202.6 Supervised lenders and mortgagees.", "HUD", "", "", "[75 FR 20734, Apr. 20, 2010, as amended by 78 FR 57060, Sept. 17, 2013]", "(a)  Definition.  A supervised lender or mortgagee is a financial institution that is a member of the Federal Reserve System or an institution whose accounts are insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration. A supervised mortgagee may submit applications for mortgage insurance. A supervised lender or mortgagee may originate, purchase, hold, service or sell loans or insured mortgages, respectively.\n\n(b)  Additional requirements.  In addition to the general approval requirements in \u00a7 202.5, a supervised lender or mortgagee shall meet the following requirements:\n\n(1)  Net worth.  The net worth requirements appear in \u00a7 202.5(n).\n\n(2)  Notification.  A lender or mortgagee shall promptly notify the Secretary in the event of termination of its supervision by its supervising agency.\n\n(3)  Fidelity bond.  A Title II mortgagee shall have fidelity bond coverage and errors and omissions insurance acceptable to the Secretary and in an amount required by the Secretary, or have alternative insurance coverage, approved by the Secretary, that assures the faithful performance of the responsibilities of the mortgagee.\n\n(4)  Audit report.  Except as provided in paragraph (c) of this section, a lender or mortgagee must:\n\n(i) Comply with the financial reporting requirements in 24 CFR part 5, subpart H. Audit reports shall be based on audits performed by a certified public accountant, or by an independent public accountant licensed by a regulatory authority of a State or other political subdivision of the United States on or before December 31, 1970, and shall include:\n\n(A) Financial statements in a form acceptable to the Secretary, including a balance sheet and a statement of operations and retained earnings, a statement of cash flows, an analysis of the lender's or mortgagee's net worth adjusted to reflect only assets acceptable to the Secretary, and an analysis of escrow funds; and\n\n(B) Such other financial information as the Secretary may require to determine the accuracy and validity of the audit report.\n\n(ii) Submit a report on compliance tests prescribed by the Secretary.\n\n(c)  Financial statement requirements for small supervised lenders and mortgagees \u2014(1)  Definitions.  For the purposes of this section, the following definitions apply:\n\n(i)  Federal banking agency  means the Board of Governors of the Federal Reserve System; the Federal Deposit Insurance Corporation; and the National Credit Union Administration; or any successor agency thereof.\n\n(ii)  Small supervised lender or mortgagee  means a supervised lender or mortgagee possessing consolidated assets below the threshold for required audited financial reporting as established by the federal banking agency that is responsible for the oversight of that supervised lender or mortgagee.\n\n(2)  Financial statement requirements.  Small supervised lenders and mortgagees shall not be subject to the requirement to submit a copy of an audited financial statement under \u00a7 202.5(g) and the audit report requirements under paragraph (b)(4) of this section. Small supervised lenders and mortgagees are required, within 90 days of their fiscal year end, to furnish to the Secretary the unaudited financial regulatory report\u2014a consolidated or fourth quarter Report of Condition and Income (Federal Financial Institutions Examination Council forms 031 and 041, also known as the \u201cCall Report\u201d), a consolidated or fourth quarter Thrift Financial Report, or a consolidated or fourth quarter NCUA Call Report (NCUA Form 5300 or 5310), or such other financial regulatory report as may be required\u2014that aligns with the small supervised lender's or mortgagee's fiscal year end and that the small supervised lender or mortgagee is required to submit to their respective federal banking agency.\n\n(3)  Requirement for audited financial statement and other information based on determination of heightened risk to the FHA insurance fund.  If the Secretary determines that a small supervised lender or mortgagee poses a heightened risk to the FHA insurance fund, the lender or mortgagee must provide, upon request, additional financial documentation, up to and including an audited financial statement, and other information as the Secretary determines necessary. The Secretary may determine that a small supervised lender or mortgagee poses a heightened risk to the FHA insurance fund based upon, but not limited to, one or more of the following factors:\n\n(i) Failing to provide required financial submissions under \u00a7 202.6(c)(2) within the required 90-day period following the lender's or mortgagee's fiscal year end;\n\n(ii) Maintaining insufficient adjusted net worth or unrestricted liquid assets as required by \u00a7 202.5(n);\n\n(iii) Reporting opening cash and equity balances that do not agree with the prior year's reported cash and equity balances;\n\n(iv) Experiencing an operating loss of 20 percent or greater of the lender's or mortgagee's net worth for the annual reporting period as governed by \u00a7 202.5(m)(1);\n\n(v) Experiencing an increase in loan volume over the prior 12-month period, determined by the Secretary to be significant;\n\n(vi) Undertaking significant changes to business operations, such as a merger or acquisition; and\n\n(vii) Other factors that the Secretary considers appropriate in indicating a heightened risk to the FHA insurance fund."], ["24:24:2.1.1.2.3.2.37.2", 24, "Housing and Urban Development", "II", "B", "202", "PART 202\u2014APPROVAL OF LENDING INSTITUTIONS AND MORTGAGEES", "B", "Subpart B\u2014Classes of Lenders and Mortgagees", "", "\u00a7 202.7 Nonsupervised lenders and mortgagees.", "HUD", "", "", "[62 FR 20082, Apr. 24, 1997, as amended at 62 FR 65182, Dec. 10, 1997; 63 FR 9742, Feb. 26, 1998; 63 FR 44361, Aug. 18, 1998; 67 FR 53451, Aug. 15, 2002; 77 FR 51468, Aug. 24, 2012]", "(a)  Definition.  A nonsupervised lender or mortgagee is a lending institution which has as its principal activity the lending or investing of funds in real estate mortgages, consumer installment notes, or similar advances of credit, or the purchase of consumer installment contracts, and which is not approved under any other section of this part. A nonsupervised mortgagee may submit applications for mortgage insurance. A nonsupervised lender or mortgagee may originate, purchase, hold, service or sell insured loans or mortgages, respectively.\n\n(b)  Additional requirements.  In addition to the general approval requirements in \u00a7 202.5, a nonsupervised lender or mortgagee shall meet the following requirements:\n\n(1)  Net worth and liquid assets.  The net worth and liquidity requirements appear in \u00a7 202.5(n).\n\n(2)  Credit source \u2014(i)  Title I.  A lender shall have and maintain a reliable warehouse line of credit or other funding program acceptable to the Secretary of not less than $500,000 for use in originating or purchasing Title I loans.\n\n(ii)  Title II.  Except for multifamily mortgagees, a mortgagee shall have a warehouse line of credit or other mortgage funding program acceptable to the Secretary which is adequate to fund the mortgagee's average 60 day origination operations, but in no event shall the warehouse line of credit or funding program be less than $1,000,000.\n\n(3)  Audit report.  (i) A lender or mortgagee must comply with the financial reporting requirements in 24 CFR part 5, subpart H. Audit reports shall be based on audits performed by a certified public accountant, or by an independent public accountant licensed by a regulatory authority of a State or other political subdivision of the United States on or before December 31, 1970, and shall include:\n\n(A) A financial statement in a form acceptable to the Secretary, including a balance sheet and a statement of operations and retained earnings, a statement of cash flows, an analysis of the mortgagee's net worth adjusted to reflect only assets acceptable to the Secretary, and an analysis of escrow funds; and\n\n(B) Such other financial information as the Secretary may require to determine the accuracy and validity of the audit report.\n\n(ii) A mortgagee must submit a report on compliance tests prescribed by the Secretary.\n\n(4)  Fidelity bond.  A Title II mortgagee shall have fidelity bond coverage and errors and omissions insurance acceptable to the Secretary and in an amount required by the Secretary, or alternative insurance coverage approved by the Secretary, that assures the faithful performance of the responsibilities of the mortgagee."], ["24:24:2.1.1.2.3.2.37.3", 24, "Housing and Urban Development", "II", "B", "202", "PART 202\u2014APPROVAL OF LENDING INSTITUTIONS AND MORTGAGEES", "B", "Subpart B\u2014Classes of Lenders and Mortgagees", "", "\u00a7 202.8 Sponsored third-party originators.", "HUD", "", "", "[75 FR 20734, Apr. 20, 2010, as amended at 77 FR 51468, Aug. 24, 2012]", "(a)  Definitions \u2014 Sponsor.  (1) With respect to Title I programs, a sponsor is a lender that holds a valid Title I Contract of Insurance and meets the net worth requirement for the class of lender to which it belongs.\n\n(2) With respect to Title II programs, a sponsor is a mortgagee that holds a valid origination approval agreement, is approved to participate in the Direct Endorsement program, and meets the net worth requirement for the class of mortgagee to which it belongs.\n\n(3) Each sponsor shall be responsible to the Secretary for the actions of its sponsored third-party originators or mortgagees in originating loans or mortgages, unless applicable law or regulation requires specific knowledge on the part of the party to be held responsible. If specific knowledge is required, the Secretary will presume that a sponsor has knowledge of the actions of its sponsored third-party originators or mortgagees in originating loans or mortgages and the sponsor is responsible for those actions unless it can rebut the presumption with affirmative evidence.\n\nSponsored third-party originator.  A sponsored third-party originator may hold a Title I Contract of Insurance or Title II Origination Approval Agreement if it is an FHA-approved lender or mortgagee. If the sponsored third-party originator is not an FHA-approved lender or mortgagee, then the sponsored third-party originator may not hold a Title I Contract of Insurance or Title II Origination Approval Agreement. A sponsored third-party originator is authorized to originate Title I direct loans or Title II mortgage loans for sale or transfer to a sponsor or sponsors, as defined in this section, that holds a valid Title I Contract of Insurance or Title II Origination Approval Agreement and is not under suspension, subject to the sponsor determining that the third-party originator has met the eligibility criteria of paragraph (b) of this section.\n\n(b)  Eligibility to originate loans to be insured by FHA.  A sponsored third-party originator may originate loans to be insured by FHA, provided that:\n\n(1) The sponsored third-party originator is working with and through an FHA-approved lender or mortgagee; and\n\n(2) The sponsored third-party originator or an officer, partner, director, principal, manager, supervisor, loan processor, or loan originator of the sponsored third-party originator has not been subject to the sanctions or administrative actions listed in \u00a7 202.5(j), as determined and verified by the FHA-approved lender or mortgagee."], ["24:24:2.1.1.2.3.2.37.4", 24, "Housing and Urban Development", "II", "B", "202", "PART 202\u2014APPROVAL OF LENDING INSTITUTIONS AND MORTGAGEES", "B", "Subpart B\u2014Classes of Lenders and Mortgagees", "", "\u00a7 202.9 Investing lenders and investing mortgagees.", "HUD", "", "", "[62 FR 20082, Apr. 24, 1997, as amended at 63 FR 9742, Feb. 26, 1998; 75 FR 20734, Apr. 20, 2010; 89 FR 30277, Apr. 23, 2024]", "(a)  Definition.  An investing lender or investing mortgagee is an organization that is not approved as a supervised lender or mortgagee under \u00a7 202.6, a nonsupervised lender or mortgagee under \u00a7 202.7, or a governmental or similar institution under \u00a7 202.10. An investing lender or investing mortgagee may purchase, hold, or sell Title I loans or Title II mortgages, respectively, but may not originate Title I loans or Title II mortgages in its own name or submit applications for the insurance of mortgages. An investing lender or investing mortgagee may not service Title I loans or Title II mortgages without prior approval of the Secretary.\n\n(b)  Additional requirements.  In addition to the general approval requirements in \u00a7 202.5, an investing lender or investing mortgagee shall meet the following requirements:\n\n(1)  Funding arrangements.  An investing lender or investing mortgagee shall have, or have made arrangements for, funds sufficient to support a projected investment of at least $1,000,000 in property improvement, manufactured home or real estate loans or mortgages.\n\n(2)  Officers and staff.  In lieu of the staffing and facilities requirements in \u00a7 202.5(b), an investing lender or investing mortgagee shall have officers or employees who are capable of managing its activities in purchasing, holding, and selling Title I loans or Title II mortgages.\n\n(3)  Fidelity bond.  An investing lender or investing mortgagee shall maintain fidelity bond coverage and errors and omissions insurance acceptable to the Secretary and in an amount required by the Secretary, or alternative insurance coverage approved by the Secretary, that assures the faithful performance of the responsibilities of the mortgagee.\n\n(4)  Audit report.  An investing lender or mortgagee must comply with the financial reporting requirements in24 CFR part 5, subpart H. Audit reports shall be based on audits performed by a certified public accountant, or by an independent public accountant licensed by a regulatory authority of a State or other political subdivision of the United States on or before December 31, 1970. Audit reports shall include:\n\n(i) A financial statement in a form acceptable to the Secretary, including a balance sheet and a statement of operations and retained earnings, a statement of cash flows, an analysis of the investing lender's or mortgagee's net worth adjusted to reflect only assets acceptable to the Secretary, and an analysis of escrow funds; and\n\n(ii) Such other financial information as the Secretary may require to determine the accuracy and validity of the audit report."], ["24:24:2.1.1.2.3.2.37.5", 24, "Housing and Urban Development", "II", "B", "202", "PART 202\u2014APPROVAL OF LENDING INSTITUTIONS AND MORTGAGEES", "B", "Subpart B\u2014Classes of Lenders and Mortgagees", "", "\u00a7 202.10 Governmental institutions, Government-sponsored enterprises, public housing agencies and State housing agencies.", "HUD", "", "", "[62 FR 20082, Apr. 24, 1997, as amended at 80 FR 75936, Dec. 7, 2015; 89 FR 30277, Apr. 23, 2024]", "(a)  Federal, state, and municipal governmental agencies and Federal Reserve Banks.  A Federal, State, or municipal government agency or a Federal Reserve Bank may be an approved lender or mortgagee. A mortgagee approved under this paragraph (a) may submit applications for Title II mortgage insurance. A lender or mortgagee approved under this paragraph (a) may originate, purchase, service, or sell Title I loans and insured mortgages, respectively. A mortgagee or lender approved under this paragraph (a) is not required to meet a net worth requirement. A lender or mortgagee shall maintain fidelity bond coverage and errors and omissions insurance acceptable to the Secretary and in an amount required by the Secretary, or alternative insurance coverage approved by the Secretary, that assures the faithful performance of the responsibilities of the mortgagee. There are no additional requirements beyond the general approval requirements in \u00a7 202.5 or as provided under paragraph (c) of this section.\n\n(b)  Government-Sponsored Enterprises.  The Government-Sponsored Enterprises are the Federal Home Loan Banks, Federal Home Loan Mortgage Corporation, and Federal National Mortgage Association. A Government-Sponsored Enterprise may be an approved lender or mortgagee. A lender or mortgagee approved under this paragraph (b) may purchase, service, or sell Title I loans and insured mortgages, respectively. A mortgagee or lender approved under this paragraph (b) is not required to meet a net worth requirement. There are no additional requirements beyond the general approval requirements in \u00a7 202.5.\n\n(c)  Public housing agencies and State housing agencies.  Under such terms and conditions as the Secretary may prescribe and notwithstanding the general requirements of \u00a7 202.5 or the requirements of paragraph (a) of this section, a public housing agency or its instrumentality or a State housing agency may be approved as a mortgagee for the purpose of originating and holding multifamily mortgages funded by issuance of tax exempt obligations by the agency.\n\n(d)  Audit requirements.  The insuring of loans and mortgages under the Act constitutes \u201cFederal financial assistance\u201d (as defined in 2 CFR 200.1) for purposes of audit requirements set out in 2 CFR part 200, subpart F. Non-Federal entities (as defined in 2 CFR 200.1) that receive insurance as lenders and mortgagees shall conduct audits in accordance with 2 CFR part 200, subpart F."], ["24:24:2.1.1.2.3.3.37.1", 24, "Housing and Urban Development", "II", "B", "202", "PART 202\u2014APPROVAL OF LENDING INSTITUTIONS AND MORTGAGEES", "C", "Subpart C\u2014Title I and Title II Specific Requirements", "", "\u00a7 202.11 Title I.", "HUD", "", "", "[75 FR 20734, Apr. 20, 2010]", "(a)  Types of administrative action.  In addition to termination of the Contract of Insurance, certain sanctions may be imposed under the Title I program. The administrative actions that may be applied are set forth in 24 CFR part 25. Civil money penalties may be imposed against Title I lenders and mortgagees pursuant to 24 CFR part 30.\n\n(b)  Grounds for action.  Administrative actions shall be based upon both the grounds set forth in 24 CFR part 25 and as follows:\n\n(1) Failure to properly supervise and monitor dealers under the provisions of part 201 of this title;\n\n(2) Exhaustion of the general insurance reserve established under part 201 of this title;\n\n(3) Maintenance of a Title I claims/loan ratio representing an unacceptable risk to the Department; or\n\n(4) Transfer of a Title I loan to a party that does not have a valid Title I Contract of Insurance."], ["24:24:2.1.1.2.3.3.37.2", 24, "Housing and Urban Development", "II", "B", "202", "PART 202\u2014APPROVAL OF LENDING INSTITUTIONS AND MORTGAGEES", "C", "Subpart C\u2014Title I and Title II Specific Requirements", "", "\u00a7 202.12 Title II.", "HUD", "", "", "[62 FR 20082, Apr. 24, 1997, as amended at 75 FR 20734, Apr. 20, 2010; 77 FR 51469, Aug. 24, 2012]", "(a)  Tiered pricing \u2014(1)  General requirements \u2014(i)  Prohibition against excess variation.  The customary lending practices of a mortgagee for its single family insured mortgages shall not provide for a variation in mortgage charge rates that exceed 2 percentage points. A variation is determined as provided in paragraph (a)(6) of this section.\n\n(ii)  Customary lending practices.  The customary lending practices of a mortgagee include all single family insured mortgages originated by the mortgagee, including mortgages that were originated by the mortgagee's sponsored third-party originator(s).\n\n(iii)  Basis for permissible variations.  Any variations in the mortgage charge rate up to two percentage points under the mortgagee's customary lending practices must be based on actual variations in fees or cost to the mortgagee to make the mortgage loan, which shall be determined after accounting for the value of servicing rights generated by making the loan and other income to the mortgagee related to the loan. Fees or costs must be fully documented for each specific loan.\n\n(2)  Area.  For purposes of this section, an area is:\n\n(i) An area used by HUD for purposes of \u00a7 203.18(a) of this chapter to determine the median 1-family house price for an area; or\n\n(ii) The area served by a HUD field office but excluding any area included in paragraph (a)(2)(i) of this section.\n\n(3)  Mortgage charges.  Mortgage charges include any charges under the mortgagee's control and not collected for the benefit of third parties. Examples are interest, discount points and origination fees.\n\n(4)  Interest rate.  Whenever a mortgagee offers a particular interest rate for a mortgage type in an area, it may not restrict the availability of the rate in the area on the basis of the principal amount of the mortgage. A mortgagee may not direct mortgage applicants to any specific interest rate category on the basis of mortgage size.\n\n(5)  Mortgage charge rate.  The mortgage charge rate is defined as the amount of mortgage charges for a mortgage expressed as a percentage of the initial principal amount of the mortgage.\n\n(6)  Determining excess variations.  Variation in mortgage charge rates for a mortgage type is determined by comparing all mortgage charge rates offered by the mortgagee within an area for the mortgage type for a designated day or other time period, including mortgage charge rates for all actual mortgage applications.\n\n(7)  Mortgage type.  A mortgage type for purposes of paragraph (a)(6) of this section will include those mortgages that are closely parallel in important characteristics affecting pricing and charges, such as level of risk or processing expenses. The Secretary may develop standards and definitions regarding mortgage types.\n\n(8)  Recordkeeping.  Mortgagees are required to maintain records on pricing information, satisfactory to the Secretary, that would allow for reasonable inspection by HUD for a period of at least 2 years. Additionally, many mortgagees are required to maintain racial, ethnic, and gender data under the regulations implementing the Home Mortgage Disclosure Act (12 U.S.C. 2801-2810).\n\n(b)  Servicing.  Any mortgagee that services mortgages must be approved by the Secretary under \u00a7 202.6, \u00a7 202.7 or \u00a7 202.10, or be specifically approved for servicing under \u00a7 202.9(a).\n\n(c)  Report and corrective plan requirements.  If a mortgagee approved for participation in Title II programs is notified by the Secretary that it had a rate of defaults and claims on HUD-insured mortgages during the preceding year, or during recent years, which was higher than the normal rate, it shall submit a report, within 60 days, containing an explanation for the above-normal rate of defaults and claims, and, if required by the Secretary, a plan for corrective action with regard to mortgages in default and its mortgage processing system in general."], ["28:28:2.0.1.1.49.1.119.1", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "A", "Subpart A\u2014General", "", "\u00a7 202.101 Scope.", "DOJ", "", "", "", "(a) Executive Order 14117 of February 28, 2024 (Preventing Access to Americans' Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern) (\u201cthe Order\u201d), directs the Attorney General to issue regulations that prohibit or otherwise restrict United States persons from engaging in any acquisition, holding, use, transfer, transportation, or exportation of, or dealing in, any property in which a foreign country or national thereof has any interest (\u201ctransaction\u201d), where the transaction: involves United States Government-related data (\u201cgovernment-related data\u201d) or bulk U.S. sensitive personal data, as defined by final rules implementing the Order; falls within a class of transactions that has been determined by the Attorney General to pose an unacceptable risk to the national security of the United States because the transactions may enable access by countries of concern or covered persons to government-related data or bulk U.S. sensitive personal data; and meets other criteria specified by the Order.\n\n(b) This part contains regulations implementing the Order and addressing the national emergency declared in Executive Order 13873 of May 15, 2019 (Securing the Information and Communications Technology and Services Supply Chain), and further addressed with additional measures in Executive Order 14034 of June 9, 2021 (Protecting Americans' Sensitive Data from Foreign Adversaries) and Executive Order 14117."], ["28:28:2.0.1.1.49.1.119.2", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "A", "Subpart A\u2014General", "", "\u00a7 202.102 Rules of construction and interpretation.", "DOJ", "", "", "", "(a) The examples included in this part are provided for informational purposes and should not be construed to alter the meaning of the text of the regulations in this part.\n\n(b) As used in this part, the term \u201cincluding\u201d means \u201cincluding but not limited to.\u201d\n\n(c) All references to \u201cdays\u201d in this part mean calendar days. In computing any time period specified in this part:\n\n(1) Exclude the day of the event that triggers the period;\n\n(2) Count every day, including Saturdays, Sundays, and legal holidays; and\n\n(3) Include the last day of the period, but if the last day is a Saturday, Sunday, or Federal holiday, the period continues to run until the end of the next day that is not a Saturday, Sunday, or Federal holiday."], ["28:28:2.0.1.1.49.1.119.3", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "A", "Subpart A\u2014General", "", "\u00a7 202.103 Relation of this part to other laws and regulations.", "DOJ", "", "", "", "Nothing in this part shall be construed as altering or affecting any other authority, process, regulation, investigation, enforcement measure, or review provided by or established under any other provision of Federal law, including the International Emergency Economic Powers Act."], ["28:28:2.0.1.1.49.1.119.4", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "A", "Subpart A\u2014General", "", "\u00a7 202.104 Delegation of authorities.", "DOJ", "", "", "", "Any action that the Attorney General is authorized to take pursuant to the Order or pursuant to this part may be taken by the Assistant Attorney General for National Security or by any other person to whom the Attorney General or Assistant Attorney General for National Security in writing delegates authority so to act."], ["28:28:2.0.1.1.49.1.119.5", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "A", "Subpart A\u2014General", "", "\u00a7 202.105 Amendment, modification, or revocation.", "DOJ", "", "", "", "Except as otherwise provided by law, any determinations, prohibitions, decisions, licenses (whether general or specific), guidance, authorizations, instructions, orders, or forms issued pursuant to this part may be amended, modified, or revoked, in whole or in part, at any time."], ["28:28:2.0.1.1.49.1.119.6", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "A", "Subpart A\u2014General", "", "\u00a7 202.106 Severability.", "DOJ", "", "", "", "If any provision of this part is held to be invalid or unenforceable by its terms, or as applied to any person or circumstance, or stayed pending further agency action or judicial review, the provision is to be construed so as to continue to give the maximum effect to the provision permitted by law, unless such holding will be one of utter invalidity or unenforceability, in which event the provision will be severable from this part and will not affect the remainder thereof."], ["28:28:2.0.1.1.49.10.119.1", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "J", "Subpart J\u2014Due Diligence and Audit Requirements", "", "\u00a7 202.1001 Due diligence for restricted transactions.", "DOJ", "", "", "", "(a)  Data compliance program.  By no later than October 6, 2025, U.S. persons engaging in any restricted transactions shall develop and implement a data compliance program.\n\n(b)  Requirements.  The data compliance program shall include, at a minimum, each of the following requirements:\n\n(1) Risk-based procedures for verifying data flows involved in any restricted transaction, including procedures to verify and log, in an auditable manner, the following:\n\n(i) The types and volumes of government-related data or bulk U.S. sensitive personal data involved in the transaction;\n\n(ii) The identity of the transaction parties, including any ownership of entities or citizenship or primary residence of individuals; and\n\n(iii) The end-use of the data and the method of data transfer;\n\n(2) For restricted transactions that involve vendors, risk-based procedures for verifying the identity of vendors;\n\n(3) A written policy that describes the data compliance program and that is annually certified by an officer, executive, or other employee responsible for compliance;\n\n(4) A written policy that describes the implementation of the security requirements as defined in \u00a7 202.248 and that is annually certified by an officer, executive, or other employee responsible for compliance; and\n\n(5) Any other information that the Attorney General may require."], ["28:28:2.0.1.1.49.10.119.2", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "J", "Subpart J\u2014Due Diligence and Audit Requirements", "", "\u00a7 202.1002 Audits for restricted transactions.", "DOJ", "", "", "", "(a)  Audit required.  U.S. persons that, on or after October 6, 2025, engage in any restricted transactions under \u00a7 202.401 shall conduct an audit that complies with the requirements of this section.\n\n(b)  Who may conduct the audit.  The auditor:\n\n(1) Must be qualified and competent to examine, verify, and attest to the U.S. person's compliance with and the effectiveness of the security requirements, as defined in \u00a7 202.248, and all other applicable requirements, as defined in \u00a7 202.401, implemented for restricted transactions;\n\n(2) Must be independent; and\n\n(3) Cannot be a covered person or a country of concern.\n\n(c)  When required.  The audit must be performed once for each calendar year in which the U.S. person engages in any restricted transactions.\n\n(d)  Timeframe.  The audit must cover the preceding 12 months.\n\n(e)  Scope.  The audit must:\n\n(1) Examine the U.S. person's restricted transactions;\n\n(2) Examine the U.S. person's data compliance program required under \u00a7 202.1001 and its implementation;\n\n(3) Examine relevant records required under \u00a7 202.1101;\n\n(4) Examine the U.S. person's security requirements, as defined by \u00a7 202.248; and\n\n(5) Use a reliable methodology to conduct the audit.\n\n(f)  Report.  (1) The auditor must prepare and submit a written report to the U.S. person within 60 days of the completion of the audit.\n\n(2) The audit report must:\n\n(i) Describe the nature of any restricted transactions engaged in by the U.S. person;\n\n(ii) Describe the methodology undertaken, including the relevant policies and other documents reviewed, relevant personnel interviewed, and any relevant facilities, equipment, networks, or systems examined;\n\n(iii) Describe the effectiveness of the U.S. person's data compliance program and its implementation;\n\n(iv) Describe any vulnerabilities or deficiencies in the implementation of the security requirements that have affected or could affect the risk of access to government-related data or bulk U.S. sensitive personal data by a country of concern or covered person;\n\n(v) Describe any instances in which the security requirements failed or were otherwise not effective in mitigating the risk of access to government-related data or bulk U.S. sensitive personal data by a country of concern or covered person; and\n\n(vi) Recommend any improvements or changes to policies, practices, or other aspects of the U.S. person's business to ensure compliance with the security requirements.\n\n(3) U.S. persons engaged in restricted transactions must retain the audit report for a period of at least 10 years, consistent with the recordkeeping requirements in \u00a7 202.1101."], ["28:28:2.0.1.1.49.11.119.1", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "K", "Subpart K\u2014Reporting and Recordkeeping Requirements", "", "\u00a7 202.1101 Records and recordkeeping requirements.", "DOJ", "", "", "", "(a)  Records.  Except as otherwise provided, U.S. persons engaging in any transaction subject to the provisions of this part shall keep a full and accurate record of each such transaction engaged in, and such record shall be available for examination for at least 10 years after the date of such transaction.\n\n(b)  Additional recordkeeping requirements.  U.S. persons engaging in any restricted transaction shall create and maintain, at a minimum, the following records in an auditable manner:\n\n(1) A written policy that describes the data compliance program and that is certified annually by an officer, executive, or other employee responsible for compliance;\n\n(2) A written policy that describes the implementation of any applicable security requirements as defined in \u00a7 202.248 and that is certified annually by an officer, executive, or other employee responsible for compliance;\n\n(3) The results of any annual audits that verify the U.S. person's compliance with the security requirements and any conditions on a license;\n\n(4) Documentation of the due diligence conducted to verify the data flow involved in any restricted transaction, including:\n\n(i) The types and volumes of government-related data or bulk U.S. sensitive personal data involved in the transaction;\n\n(ii) The identity of the transaction parties, including any direct and indirect ownership of entities or citizenship or primary residence of individuals; and\n\n(iii) A description of the end-use of the data;\n\n(5) Documentation of the method of data transfer;\n\n(6) Documentation of the dates the transaction began and ended;\n\n(7) Copies of any agreements associated with the transaction;\n\n(8) Copies of any relevant licenses or advisory opinions;\n\n(9) The document reference number for any original document issued by the Attorney General, such as a license or advisory opinion;\n\n(10) A copy of any relevant documentation received or created in connection with the transaction; and\n\n(11) An annual certification by an officer, executive, or other employee responsible for compliance of the completeness and accuracy of the records documenting due diligence."], ["28:28:2.0.1.1.49.11.119.2", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "K", "Subpart K\u2014Reporting and Recordkeeping Requirements", "", "\u00a7 202.1102 Reports to be furnished on demand.", "DOJ", "", "", "", "(a)  Reports.  Every person is required to furnish under oath, in the form of reports or otherwise, from time to time and at any time as may be required by the Department of Justice, complete information relative to any act or transaction or covered data transaction, regardless of whether such act, transaction, or covered data transaction is effected pursuant to a license or otherwise, subject to the provisions of this part and except as otherwise prohibited by Federal law. The Department of Justice may require that such reports include the production of any books, contracts, letters, papers, or other hard copy or electronic documents relating to any such act, transaction, or covered data transaction, in the custody or control of the persons required to make such reports. Reports may be required either before, during, or after such acts, transactions, or covered data transactions. The Department of Justice may, through any person or agency, conduct investigations, hold hearings, administer oaths, examine witnesses, receive evidence, take depositions, and require by subpoena the attendance and testimony of witnesses and the production of any books, contracts, letters, papers, and other hard copy or electronic documents relating to any matter under investigation, regardless of whether any report has been required or filed in connection therewith.\n\n(b)  Definition of the term \u201cdocument. \u201d For purposes of paragraph (a) of this section, the term  document  includes any written, recorded, or graphic matter or other means of preserving thought or expression (including in electronic format), and all tangible things stored in any medium from which information can be processed, transcribed, or obtained directly or indirectly, including correspondence, memoranda, notes, messages, contemporaneous communications such as text and instant messages, letters, emails, spreadsheets, metadata, contracts, bulletins, diaries, chronological data, minutes, books, reports, examinations, charts, ledgers, books of account, invoices, air waybills, bills of lading, worksheets, receipts, printouts, papers, schedules, affidavits, presentations, transcripts, surveys, graphic representations of any kind, drawings, photographs, graphs, video or sound recordings, and motion pictures or other film.\n\n(c)  Format.  Persons providing documents to the Department of Justice pursuant to this section must produce documents in a usable format agreed upon by the Department of Justice. For guidance, see the Department of Justice's data delivery standards available on the National Security Division's website at  https://www.justice.gov/nsd."], ["28:28:2.0.1.1.49.11.119.3", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "K", "Subpart K\u2014Reporting and Recordkeeping Requirements", "", "\u00a7 202.1103 Annual reports.", "DOJ", "", "", "", "(a)  Who must report.  An annual report must be filed, except as otherwise prohibited by Federal law, by any U.S. person that, on or after October 6, 2025, is engaged in a restricted transaction involving cloud-computing services, and that has 25% or more of the U.S. person's equity interests owned (directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise) by a country of concern or covered person.\n\n(b)  Primary responsibility to report.  A report may be filed on behalf of a U.S. person engaging in the data transaction described in \u00a7 202.1103(a) by an attorney, agent, or other person. Primary responsibility for reporting, however, rests with the actual U.S. person engaging in the data transaction. No U.S. person is excused from filing a report by reason of the fact that another U.S. person has submitted a report with regard to the same data transaction, except where the U.S. person has actual knowledge that the other U.S. person filed the report.\n\n(c)  When reports are due.  A report on the data transactions described in \u00a7 202.1103(a) engaged in as of December 31 of the previous year shall be filed annually by March 1 of the subsequent year.\n\n(d)  Contents of reports.  Annual reports on the data transactions described in \u00a7 202.1103(a) shall include the following:\n\n(1) The name and address of the U.S. person engaging in the covered data transaction, and the name, telephone number, and email address of a contact from whom additional information may be obtained;\n\n(2) A description of the covered data transaction, including:\n\n(i) The date of the transaction;\n\n(ii) The types and volumes of government-related data or bulk U.S. sensitive personal data involved in the transaction;\n\n(iii) The method of data transfer; and\n\n(iv) Any persons participating in the data transaction and their respective locations, including the name and location of each data recipient, the ownership of entities or citizenship or primary residence of individuals, the name and location of any covered persons involved in the transaction, and the name of any countries of concern involved in the transaction;\n\n(3) A copy of any relevant documentation received or created in connection with the transaction; and\n\n(4) Any other information that the Department of Justice may require.\n\n(e)  Additional contents; format and method of submission.  Reports required by this section must be submitted in accordance with this section and with subpart L of this part."], ["28:28:2.0.1.1.49.11.119.4", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "K", "Subpart K\u2014Reporting and Recordkeeping Requirements", "", "\u00a7 202.1104 Reports on rejected prohibited transactions.", "DOJ", "", "", "", "(a)  Who must report.  A report must be filed, except as otherwise prohibited by Federal law, by any U.S. person that, on or after October 6, 2025, has received and affirmatively rejected (including automatically rejected using software, technology, or automated tools) an offer from another person to engage in a prohibited transaction involving data brokerage.\n\n(b)  When reports are due.  U.S. persons shall file reports within 14 days of rejecting a transaction prohibited by this part.\n\n(c)  Contents of reports.  Reports on rejected transactions shall include the following, to the extent known and available to the person filing the report at the time the transaction is rejected:\n\n(1) The name and address of the U.S. person that rejected the prohibited transaction, and the name, telephone number, and email address of a contact from whom additional information may be obtained;\n\n(2) A description of the rejected transaction, including:\n\n(i) The date the transaction was rejected;\n\n(ii) The types and volumes of government-related data or bulk U.S. sensitive personal data involved in the transaction;\n\n(iii) The method of data transfer;\n\n(iv) Any persons attempting to participate in the transaction and their respective locations, including the name and location of each data recipient, the ownership of entities or citizenship or primary residence of individuals, the name and location of any covered persons involved in the transaction, and the name of any countries of concern involved in the transaction;\n\n(v) A copy of any relevant documentation received or created in connection with the transaction; and\n\n(vi) Any other information that the Department of Justice may require.\n\n(d)  Additional contents; format and method of submission.  Reports required by this section must be submitted in accordance with this section and with subpart L of this part."], ["28:28:2.0.1.1.49.12.119.1", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "L", "Subpart L\u2014Submitting Applications, Requests, Reports, and Responses", "", "\u00a7 202.1201 Procedures.", "DOJ", "", "", "", "(a)  Application of this subpart.  This subpart L applies to any submissions required or permitted by this part, including reports of known or suspected violations submitted pursuant to \u00a7 202.302, requests for removal from the Covered Persons List submitted pursuant to subpart G of this part, requests for specific licenses submitted pursuant to \u00a7 202.802, advisory opinion requests submitted pursuant to subpart I of this part, annual reports submitted pursuant to \u00a7 202.1103, reports on rejected prohibited transactions submitted pursuant to \u00a7 202.1104, and responses to pre-penalty notices and findings of violations submitted pursuant to \u00a7 202.1306 (collectively, \u201csubmissions\u201d).\n\n(b)  Form of submissions.  Submissions must follow the instructions in this part and any instructions on the National Security Division's website. With the exception of responses to pre-penalty notices or findings of violations submitted pursuant to subpart M of this part, submissions must use the forms on the National Security Division's website or another official reporting option as specified by the National Security Division.\n\n(c)  Method of submissions.  Submissions must be made to the National Security Division electronically by emailing the National Security Division at  NSD.FIRS.datasecurity@usdoj.gov  or using another official electronic reporting option, in accordance with any instructions on the National Security Division's website.\n\n(d)  Certification.  If the submitting party is an individual, the submission must be signed by the individual or the individual's attorney. If the submitting party is not an individual, the submission must be signed on behalf of each submitting party by an officer, director, a person performing the functions of an officer or a director of, or an attorney for, the submitting party. Annual reports submitted pursuant to \u00a7 202.1103, and reports on rejected transactions submitted pursuant to \u00a7 202.1104, must be signed by an officer, a director, a person performing the functions of an officer or a director, or an employee responsible for compliance. In appropriate cases, the Department of Justice may require the chief executive officer of a requesting party to sign the request. Each such person signing a submission must certify that the submission is true, accurate, and complete."], ["28:28:2.0.1.1.49.13.119.1", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "M", "Subpart M\u2014Penalties and Finding of Violation", "", "\u00a7 202.1301 Penalties for violations.", "DOJ", "", "", "", "(a)  Civil and criminal penalties.  Section 206 of IEEPA, 50 U.S.C. 1705, is applicable to violations of the provisions of any license, ruling, regulation, order, directive, or instruction issued by or pursuant to the direction or authorization of the Attorney General pursuant to this part or otherwise under IEEPA.\n\n(1) A civil penalty not to exceed the amount set forth in section 206 of IEEPA may be imposed on any person who violates, attempts to violate, conspires to violate, or causes a violation of any license, order, regulation, or prohibition issued under IEEPA.\n\n(2) IEEPA provides for a maximum civil penalty not to exceed the greater of $368,136 or an amount that is twice the amount of the transaction that is the basis of the violation with respect to which the penalty is imposed.\n\n(3) A person who willfully commits, willfully attempts to commit, willfully conspires to commit, or aids or abets in the commission of a violation of any license, order, regulation, or prohibition issued under IEEPA shall, upon conviction, be fined not more than $1,000,000, or if a natural person, may be imprisoned for not more than 20 years, or both.\n\n(b)  Adjustment of civil penalties.  The civil penalties provided in IEEPA are subject to adjustment pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990 (Public Law 101-410, as amended, 28 U.S.C. 2461 note).\n\n(c)  Adjustment of criminal penalties.  The criminal penalties provided in IEEPA are subject to adjustment pursuant to 18 U.S.C. 3571.\n\n(d)  False statements.  Pursuant to 18 U.S.C. 1001, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device a material fact; or makes any materially false, fictitious, or fraudulent statement or representation; or makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry shall be fined under title 18, United States Code, imprisoned, or both.\n\n(e)  Other applicable laws.  Violations of this part may also be subject to other applicable laws."], ["28:28:2.0.1.1.49.13.119.2", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "M", "Subpart M\u2014Penalties and Finding of Violation", "", "\u00a7 202.1302 Process for pre-penalty notice.", "DOJ", "", "", "", "(a)  When and how issued.  (1) If the Department of Justice has reason to believe that there has occurred a violation of any provision of this part or a violation of the provisions of any license, ruling, regulation, order, directive, or instruction issued by or pursuant to the direction or authorization of the Attorney General pursuant to this part or otherwise under IEEPA and determines that a civil monetary penalty is warranted, the Department of Justice will issue a pre-penalty notice informing the alleged violator of the agency's intent to impose a monetary penalty.\n\n(2) The pre-penalty notice shall be in writing.\n\n(3) The pre-penalty notice may be issued whether or not another agency has taken any action with respect to the matter.\n\n(4) The Department shall provide the alleged violator with the relevant information that is not privileged, classified, or otherwise protected, and that forms the basis for the pre-penalty notice, including a description of the alleged violation and proposed penalty amount.\n\n(b)  Opportunity to respond.  An alleged violator has the right to respond to a pre-penalty notice in accordance with \u00a7 202.1306.\n\n(c)  Settlement.  Settlement discussion may be initiated by the Department of Justice, the alleged violator, or the alleged violator's authorized representative.\n\n(d)  Representation.  A representative of the alleged violator may act on behalf of the alleged violator, but any oral communication with the Department of Justice prior to a written submission regarding the specific allegations contained in the pre-penalty notice must be preceded by a written letter of representation, unless the pre-penalty notice was served upon the alleged violator in care of the representative."], ["28:28:2.0.1.1.49.13.119.3", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "M", "Subpart M\u2014Penalties and Finding of Violation", "", "\u00a7 202.1303 Penalty imposition.", "DOJ", "", "", "", "If, after considering any written response to the pre-penalty notice and any relevant facts, the Department of Justice determines that there was a violation by the alleged violator named in the pre-penalty notice and that a civil monetary penalty is appropriate, the Department of Justice may issue a penalty notice to the violator containing a determination of the violation and the imposition of the monetary penalty. The Department shall provide the violator with any relevant, non-classified information that forms the basis of the penalty. The issuance of the penalty notice shall constitute final agency action. The violator has the right to seek judicial review of that final agency action in Federal district court."], ["28:28:2.0.1.1.49.13.119.4", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "M", "Subpart M\u2014Penalties and Finding of Violation", "", "\u00a7 202.1304 Administrative collection and litigation.", "DOJ", "", "", "", "In the event that the violator does not pay the penalty imposed pursuant to this part or make payment arrangements acceptable to the Department of Justice, the Department of Justice may refer the matter to the Department of the Treasury for administrative collection measures or take appropriate action to recover the penalty in any civil suit in Federal district court."], ["28:28:2.0.1.1.49.13.119.5", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "M", "Subpart M\u2014Penalties and Finding of Violation", "", "\u00a7 202.1305 Finding of violation.", "DOJ", "", "", "", "(a)  When and how issued.  (1) The Department of Justice may issue an initial finding of violation that identifies a violation if the Department of Justice:\n\n(i) Determines that there has occurred a violation of any provision of this part, or a violation of the provisions of any license, ruling, regulation, order, directive, or instruction issued by or pursuant to the direction or authorization of the Attorney General pursuant to this part or otherwise under IEEPA;\n\n(ii) Considers it important to document the occurrence of a violation; and\n\n(iii) Concludes that an administrative response is warranted but that a civil monetary penalty is not the most appropriate response.\n\n(2) An initial finding of violation shall be in writing and may be issued whether or not another agency has taken any action with respect to the matter.\n\n(3) The Department shall provide the alleged violator with the relevant information that is not privileged, classified, or otherwise protected, that forms the basis for the finding of violation, including a description of the alleged violation.\n\n(b)  Opportunity to respond.  An alleged violator has the right to contest an initial finding of violation in accordance with \u00a7 202.1306.\n\n(c)  Determination \u2014(1)  Determination that a finding of violation is warranted.  If, after considering the response, the Department of Justice determines that a final finding of violation should be issued, the Department of Justice will issue a final finding of violation that will inform the violator of its decision. The Department shall provide the violator with the relevant information that is not privileged, classified, or otherwise protected, that forms the basis for the finding of violation. A final finding of violation shall constitute final agency action. The violator has the right to seek judicial review of that final agency action in Federal district court.\n\n(2)  Determination that a finding of violation is not warranted.  If, after considering the response, the Department of Justice determines a finding of violation is not warranted, then the Department of Justice will inform the alleged violator of its decision not to issue a final finding of violation. A determination by the Department of Justice that a final finding of violation is not warranted does not preclude the Department of Justice from pursuing other enforcement actions.\n\n(d)  Representation.  A representative of the alleged violator may act on behalf of the alleged violator, but any oral communication with the Department of Justice prior to a written submission regarding the specific alleged violations contained in the initial finding of violation must be preceded by a written letter of representation, unless the initial finding of violation was served upon the alleged violator in care of the representative."], ["28:28:2.0.1.1.49.13.119.6", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "M", "Subpart M\u2014Penalties and Finding of Violation", "", "\u00a7 202.1306 Opportunity to respond to a pre-penalty notice or finding of violation.", "DOJ", "", "", "", "(a)  Right to respond.  An alleged violator has the right to respond to a pre-penalty notice or finding of violation by making a written presentation to the Department of Justice.\n\n(b)  Deadline for response.  A response to a pre-penalty notice or finding of violation must be electronically submitted within 30 days of electronic service of the notice or finding. The failure to submit a response within 30 days shall be deemed to be a waiver of the right to respond.\n\n(c)  Extensions of time for response.  Any extensions of time will be granted, at the discretion of the Department of Justice, only upon specific request to the Department of Justice.\n\n(d)  Contents of response.  Any response should set forth in detail why the alleged violator either believes that a violation of the regulations did not occur or why a finding of violation or penalty is otherwise unwarranted under the circumstances. The response should include all documentary or other evidence available to the alleged violator that supports the arguments set forth in the response. The Department of Justice will consider all relevant materials submitted in the response."], ["28:28:2.0.1.1.49.14.119.1", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "N", "Subpart N\u2014Government-Related Location Data List", "", "\u00a7 202.1401 Government-Related Location Data List.", "DOJ", "", "", "", "For each Area ID listed in this section, each of the latitude/longitude coordinate pairs forms a corner of the geofenced area.\n\nTable 1 to \u00a7 202.1401"], ["28:28:2.0.1.1.49.2.119.1", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.201 Access.", "DOJ", "", "", "", "The term  access  means logical or physical access, including the ability to obtain, read, copy, decrypt, edit, divert, release, affect, alter the state of, or otherwise view or receive, in any form, including through information systems, information technology systems, cloud-computing platforms, networks, security systems, equipment, or software. For purposes of determining whether a transaction is a covered data transaction, access is determined without regard for the application or effect of any security requirements."], ["28:28:2.0.1.1.49.2.119.10", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.210 Covered data transaction.", "DOJ", "", "", "", "(a)  Definition.  A  covered data transaction  is any transaction that involves any access by a country of concern or covered person to any government-related data or bulk U.S. sensitive personal data and that involves:\n\n(1) Data brokerage;\n\n(2) A vendor agreement;\n\n(3) An employment agreement; or\n\n(4) An investment agreement.\n\n(b)  Examples \u2014(1)  Example 1.  A U.S. institution conducts medical research at its own laboratory in a country of concern, including sending several U.S.-citizen employees to that laboratory to perform and assist with the research. The U.S. institution does not engage in data brokerage or a vendor, employment, or investment agreement that gives a covered person or country of concern access to government-related data or bulk U.S. sensitive personal data. Because the U.S. institution does not engage in any data brokerage or enter into a vendor, employment, or investment agreement, the U.S. institution's research activity is not a covered data transaction.\n\n(2)  Example 2.  A U.S. person engages in a vendor agreement with a covered person involving access to bulk U.S. sensitive personal data. The vendor agreement is a restricted transaction. To comply with the CISA security requirements, the U.S. person, among other things, uses data-level requirements to mitigate the risk that the covered person could access the data. The vendor agreement remains a covered data transaction subject to the requirements of this part.\n\n(3)  Example 3.  A covered person engages in a vendor agreement with a U.S. person involving the U.S. person accessing bulk U.S. sensitive personal data already possessed by the covered person. The vendor agreement is not a covered data transaction because the transaction does not involve access by the covered person."], ["28:28:2.0.1.1.49.2.119.11", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.211 Covered person.", "DOJ", "", "", "", "(a)  Definition.  The term  covered person  means:\n\n(1) A foreign person that is an entity that is 50% or more owned, directly or indirectly, individually or in the aggregate, by one or more countries of concern or persons described in paragraph (a)(2) of this section; or that is organized or chartered under the laws of, or has its principal place of business in, a country of concern;\n\n(2) A foreign person that is an entity that is 50% or more owned, directly or indirectly, individually or in the aggregate, by one or more persons described in paragraphs (a)(1), (3), (4), or (5) of this section;\n\n(3) A foreign person that is an individual who is an employee or contractor of a country of concern or of an entity described in paragraphs (a)(1), (2), or (5) of this section;\n\n(4) A foreign person that is an individual who is primarily a resident in the territorial jurisdiction of a country of concern; or\n\n(5) Any person, wherever located, determined by the Attorney General:\n\n(i) To be, to have been, or to be likely to become owned or controlled by or subject to the jurisdiction or direction of a country of concern or covered person;\n\n(ii) To act, to have acted or purported to act, or to be likely to act for or on behalf of a country of concern or covered person; or\n\n(iii) To have knowingly caused or directed, or to be likely to knowingly cause or direct a violation of this part.\n\n(b)  Examples \u2014(1)  Example 1.  Foreign persons primarily resident in Cuba, Iran, or another country of concern would be covered persons.\n\n(2)  Example 2.  Chinese or Russian citizens located in the United States would be treated as U.S. persons and would not be covered persons (except to the extent individually designated). They would be subject to the same prohibitions and restrictions as all other U.S. persons with respect to engaging in covered data transactions with countries of concern or covered persons.\n\n(3)  Example 3.  Citizens of a country of concern who are primarily resident in a third country, such as Russian citizens primarily resident in a European Union country or Cuban citizens primarily resident in a South American country that is not a country of concern, would not be covered persons except to the extent they are individually designated or to the extent that they are employees or contractors of a country of concern government or a covered person that is an entity.\n\n(4)  Example 4.  A foreign person is located abroad and is employed by a company headquartered in China. Because the company is a covered person that is an entity and the employee is located outside the United States, the employee is a covered person.\n\n(5)  Example 5.  A foreign person is located abroad and is employed by a company that has been designated as a covered person. Because the foreign person is the employee of a covered person that is an entity and the employee is a foreign person, the person is a covered person.\n\n(6)  Example 6.  A foreign person individual investor who principally resides in Venezuela owns 50% of a technology company that is solely organized under the laws of the United States. The investor is a covered person because the investor is a foreign person that is an individual who is primarily a resident in the territorial jurisdiction of a country of concern. The technology company is a U.S. person because it is an entity organized solely under the laws of the United States or any jurisdiction within the United States. The technology company is not a covered person because it is not a foreign person and therefore does not meet the criteria of \u00a7 202.211(a)(2). However, the technology company could still be designated as a covered person following a determination that the technology company meets one or more criteria of \u00a7 202.211(a)(5).\n\n(7)  Example 7.  Same as Example 6, but the technology company is additionally organized under the laws of Luxembourg. A U.S. company wishes to license bulk U.S. sensitive personal data to the technology company. The technology company is not a U.S. person because it is not solely organized under the laws of the United States. The technology company is a covered person because it is 50% or more owned, directly or indirectly, individually or in the aggregate, by a foreign person that is an individual who is primarily resident in the territorial jurisdiction of a country of concern. The transaction between the U.S. company and the technology company would be a prohibited data transaction.\n\n(8)  Example 8.  A foreign person that lives in China owns 50% of Foreign Entity A. Foreign Entity A owns 100% of Foreign Entity B and 100% of Foreign Entity C. Foreign Entity B owns 20% of Foreign Entity D. Foreign Entity C owns 30% of Foreign Entity D. Foreign Entity D would be a covered person for two independent reasons. First, Foreign Entity D because it is \u201cindirectly\u201d 50% or more owned by Foreign Entity A (20% through Foreign Entity B and 30% through Foreign Entity C). Second, Foreign Entity D is directly 50% owned, in the aggregate, by Foreign Entity B and Foreign Entity C, each of which are covered persons because they are 50% or more owned by Foreign Entity A."], ["28:28:2.0.1.1.49.2.119.12", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.212 Covered personal identifiers.", "DOJ", "", "", "", "(a)  Definition.  The term  covered personal identifiers  means any listed identifier:\n\n(1) In combination with any other listed identifier; or\n\n(2) In combination with other data that is disclosed by a transacting party pursuant to the transaction such that the listed identifier is linked or linkable to other listed identifiers or to other sensitive personal data.\n\n(b)  Exclusion.  The term  covered personal identifiers  excludes:\n\n(1) Demographic or contact data that is linked only to other demographic or contact data (such as first and last name, birthplace, ZIP code, residential street or postal address, phone number, and email address and similar public account identifiers); and\n\n(2) A network-based identifier, account-authentication data, or call-detail data that is linked only to other network-based identifier, account-authentication data, or call-detail data as necessary for the provision of telecommunications, networking, or similar service.\n\n(c)  Examples of listed identifiers in combination with other listed identifiers \u2014(1)  Example 1.  A standalone listed identifier in isolation ( i.e.,  that is not linked to another listed identifier, sensitive personal data, or other data that is disclosed by a transacting party pursuant to the transaction such that the listed identifier is linked or linkable to other listed identifiers or to other sensitive personal data)\u2014such as a Social Security Number or account username\u2014would not constitute a covered personal identifier.\n\n(2)  Example 2.  A listed identifier linked to another listed identifier\u2014such as a first and last name linked to a Social Security number, a driver's license number linked to a passport number, a device Media Access Control (\u201cMAC\u201d) address linked to a residential address, an account username linked to a first and last name, or a mobile advertising ID linked to an email address\u2014would constitute covered personal identifiers.\n\n(3)  Example 3.  Demographic or contact data linked only to other demographic or contact data\u2014such as a first and last name linked to a residential street address, an email address linked to a first and last name, or a customer loyalty membership record linking a first and last name to a phone number\u2014would not constitute covered personal identifiers.\n\n(4)  Example 4.  Demographic or contact data linked to other demographic or contact data and to another listed identifier\u2014such as a first and last name linked to an email address and to an IP address\u2014would constitute covered personal identifiers.\n\n(5)  Example 5.  Account usernames linked to passwords as part of a sale of a dataset would constitute covered personal identifiers. Those pieces of account-authentication data are not linked as a necessary part of the provision of telecommunications, networking, or similar services. This combination would constitute covered personal identifiers.\n\n(d)  Examples of a listed identifier in combination with other data disclosed by a transacting party \u2014(1)  Example 1.  A foreign person who is a covered person asks a U.S. company for a list of Media Access Control (\u201cMAC\u201d) addresses from devices that have connected to the wireless network of a U.S. fast-food restaurant located in a particular government building. The U.S. company then sells the list of MAC addresses, without any other listed identifiers or sensitive personal data, to the covered person. The disclosed MAC addresses, when paired with the other data disclosed by the covered person\u2014that the devices \u201chave connected to the wireless network of a U.S. fast-food restaurant located in a particular government building\u201d\u2014makes it so that the MAC addresses are linked or linkable to other sensitive personal data, in this case precise geolocation data of the location of the fast-food restaurant that the national security-related individuals frequent with their devices. This combination of data therefore meets the definition of covered personal identifiers.\n\n(2)  Example 2.  A U.S. company sells to a country of concern a list of residential addresses that the company describes (whether in a heading on the list or separately to the country of concern as part of the transaction) as \u201caddresses of members of a country of concern's opposition political party in New York City\u201d or as \u201caddresses of active-duty military officers who live in Howard County, Maryland\u201d without any other listed identifiers or sensitive personal data. The data disclosed by the U.S. company's description, when paired with the disclosed addresses, makes the addresses linked or linkable to other listed identifiers or to other sensitive personal data of the U.S. individuals associated with them. This combination of data therefore meets the definition of covered personal identifiers.\n\n(3)  Example 3.  A covered person asks a U.S. company for a bulk list of birth dates for \u201cany American who visited a Starbucks in Washington, DC, in December 2023.\u201d The U.S. company then sells the list of birth dates, without any other listed identifiers or sensitive personal data, to the covered person. The other data disclosed by the covered person\u2014\u201cany American who visited a Starbucks in Washington, DC, in December 2023\u201d\u2014does not make the birth dates linked or linkable to other listed identifiers or to other sensitive personal data. This combination of data therefore does not meet the definition of covered personal identifiers.\n\n(4)  Example 4.  Same as Example 3, but the covered person asks the U.S. company for a bulk list of names (rather than birth dates) for \u201cany American who visited a Starbucks in Washington, DC in December 2023.\u201d The other data disclosed by the covered person\u2014\u201cany American who visited a Starbucks in Washington, DC, in December 2023\u201d\u2014does not make the list of names, without more, linked or linkable to other listed identifiers or to other sensitive personal data. This combination of data therefore does not meet the definition of covered personal identifiers.\n\n(5)  Example 5.  A U.S. company sells to a covered person a list of residential addresses that the company describes (in a heading in the list or to the covered person as part of the transaction) as \u201chouseholds of Americans who watched more than 50% of episodes\u201d of a specific popular TV show, without any other listed identifiers or sensitive personal data. The other data disclosed by the U.S. company\u2014\u201cAmericans who watched more than 50% of episodes\u201d of a specific popular TV show\u2014does not increase the extent to which the addresses are linked or linkable to other listed identifiers or to other sensitive personal data. This combination of data therefore does not meet the definition of covered personal identifiers."], ["28:28:2.0.1.1.49.2.119.13", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.213 Cuba.", "DOJ", "", "", "", "The term  Cuba  means the Republic of Cuba, as well as any political subdivision, agency, or instrumentality thereof."], ["28:28:2.0.1.1.49.2.119.14", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.214 Data brokerage.", "DOJ", "", "", "", "(a)  Definition.  The term  data brokerage  means the sale of data, licensing of access to data, or similar commercial transactions, excluding an employment agreement, investment agreement, or a vendor agreement, involving the transfer of data from any person (the provider) to any other person (the recipient), where the recipient did not collect or process the data directly from the individuals linked or linkable to the collected or processed data.\n\n(b)  Examples \u2014(1)  Example 1.  A U.S. company sells bulk U.S. sensitive personal data to an entity headquartered in a country of concern. The U.S. company engages in prohibited data brokerage.\n\n(2)  Example 2.  A U.S. company enters into an agreement that gives a covered person a license to access government-related data held by the U.S. company. The U.S. company engages in prohibited data brokerage.\n\n(3)  Example 3.  A U.S. organization maintains a database of bulk U.S. sensitive personal data and offers annual memberships for a fee that provide members a license to access that data. Providing an annual membership to a covered person that includes a license to access government-related data or bulk U.S. sensitive personal data would constitute prohibited data brokerage.\n\n(4)  Example 4.  A U.S. company owns and operates a mobile app for U.S. users with available advertising space. As part of selling the advertising space, the U.S. company provides IP addresses and advertising IDs of more than 100,000 U.S. users' devices to an advertising exchange based in a country of concern in a twelve-month period. The U.S. company's provision of this data as part of the sale of advertising space is a covered data transaction involving data brokerage and is a prohibited transaction because IP addresses and advertising IDs are listed identifiers that satisfy the definition of bulk covered personal identifiers in this transaction.\n\n(5)  Example 5.  Same as Example 4, but the U.S. company provides the data to an advertising exchange based in the United States. As part of the sale of the advertising space, the U.S. advertising exchange provides the data to advertisers headquartered in a country of concern. The U.S. company's provision of the data to the U.S. advertising exchange would not be a transaction because it is between U.S. persons. The advertising exchange's provision of this data to the country of concern-based advertisers is data brokerage because it is a commercial transaction involving the transfer of data from the U.S. advertising exchange to the advertisers headquartered in the country of concern, where those country-of-concern advertisers did not collect or process the data directly from the individuals linked or linkable to the collected or processed data. Furthermore, the U.S. advertising exchange's provision of this data to the country of concern-based advertisers is a prohibited transaction.\n\n(6)  Example 6.  A U.S. information technology company operates an autonomous driving platform that collects the precise geolocation data of its cars operating in the United States. The U.S. company sells or otherwise licenses this bulk data to its parent company headquartered in a country of concern to help develop artificial intelligence technology and machine learning capabilities. The sale or license is data brokerage and a prohibited transaction.\n\n(7)  Example 7.  A U.S. company owns or operates a mobile app or website for U.S. users. That mobile app or website contains one or more tracking pixels or software development kits that were knowingly installed or approved for incorporation into the app or website by the U.S. company. The tracking pixels or software development kits transfer or otherwise provide access to government-related data or bulk U.S. sensitive personal data to a country of concern or covered person-owned social media app for targeted advertising. The U.S. company engages in prohibited data brokerage.\n\n(8)  Example 8.  A non-U.S. company is contracted to develop a mobile app for a U.S. company. In developing the mobile app for that U.S. company, the non-U.S. company knowingly incorporates tracking pixels or software development kits into the mobile app that then transfer or otherwise provide access to government-related data or bulk U.S. sensitive personal data to a country of concern or covered person for targeted advertising, at the request of the U.S. company. The non-U.S. company has caused a violation of the data brokerage prohibition. If the U.S. company knowingly arranged the transfer of such data to the country of concern or covered person by requesting incorporation of the tracking pixels or software development kits, the U.S. company has engaged in prohibited data brokerage.\n\n(9)  Example 9.  A U.S. researcher shares bulk human `omic data on U.S. persons with a researcher in a country of concern (a covered person) with whom the U.S. researcher is drafting a paper for submission to an academic journal. The two researchers exchange country of concern and bulk U.S. human `omic data over a period of several months to analyze and describe the findings of their research for the journal article. The U.S. person does not provide to or receive from the covered person or the covered person's employer any money or other valuable consideration as part of the authors' study. The U.S. person has not engaged in a covered data transaction involving data brokerage, because the transaction does not involve the sale of data, licensing of access to data, or similar commercial transaction involving the transfer of data to the covered person.\n\n(10)  Example 10.  A U.S. researcher receives a grant from a university in a country of concern to study. bulk personal health data and bulk human `omic data on U.S. persons. The grant directs the researcher to share the underlying bulk U.S. sensitive personal data with the country of concern university (a covered person). The transaction is a covered data transaction because it involves access by a covered person to bulk U.S. sensitive personal data and is data brokerage because it involves the transfer of bulk U.S. sensitive personal data to a covered person in return for a financial benefit."], ["28:28:2.0.1.1.49.2.119.15", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.215 Directing.", "DOJ", "", "", "", "The term  directing  means having any authority (individually or as part of a group) to make decisions for or on behalf of an entity and exercising that authority."], ["28:28:2.0.1.1.49.2.119.16", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.216 Effective date.", "DOJ", "", "", "", "The term  effective date  refers to the effective date of this part, which is 12:01 a.m. ET on April 8, 2025."], ["28:28:2.0.1.1.49.2.119.17", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.217 Employment agreement.", "DOJ", "", "", "", "(a)  Definition.  The term  employment agreement  means any agreement or arrangement in which an individual, other than as an independent contractor, performs work or performs job functions directly for a person in exchange for payment or other consideration, including employment on a board or committee, executive-level arrangements or services, and employment services at an operational level.\n\n(b)  Examples \u2014(1)  Example 1.  A U.S. company that conducts consumer human genomic testing collects and maintains bulk human genomic data from U.S. consumers. The U.S. company has global IT operations, including employing a team of individuals who are citizens of and primarily resident in a country of concern to provide back-end services. The agreements related to employing these individuals are employment agreements. Employment as part of the global IT operations team includes access to the U.S. company's systems containing the bulk human genomic data. These employment agreements would be prohibited transactions (because they involve access to bulk human genomic data).\n\n(2)  Example 2.  A U.S. company develops its own mobile games and social media apps that collect the bulk U.S. sensitive personal data of its U.S. users. The U.S. company distributes these games and apps in the United States through U.S.-based digital distribution platforms for software applications. The U.S. company intends to hire as CEO an individual designated by the Attorney General as a covered person because of evidence the CEO acts on behalf of a country of concern. The agreement retaining the individual as CEO would be an employment agreement. The individual's authorities and responsibilities as CEO involve access to all data collected by the apps, including the bulk U.S. sensitive personal data. The CEO's employment would be a restricted transaction.\n\n(3)  Example 3.  A U.S. company has derived U.S. persons' biometric identifiers by scraping public photos from social media platforms. The U.S. company stores the derived biometric identifiers in bulk, including face-data scans, for the purpose of training or enhancing facial-recognition software. The U.S. company intends to hire a foreign person, who primarily resides in a country of concern, as a project manager responsible for the database. The agreement retaining the project manager would be an employment agreement. The individual's employment as the lead project manager would involve access to the bulk biometric identifiers. The project manager's employment would be a restricted transaction.\n\n(4)  Example 4.  A U.S. financial-services company seeks to hire a data scientist who is a citizen of a country of concern who primarily resides in that country of concern and who is developing a new artificial intelligence-based personal assistant that could be sold as a standalone product to the company's customers. The arrangement retaining the data scientist would be an employment agreement. As part of that individual's employment, the data scientist would have administrator rights that allow that individual to access, download, and transmit bulk quantities of personal financial data not ordinarily incident to and part of the company's underlying provision of financial services to its customers. The data scientist's employment would be a restricted transaction.\n\n(5)  Example 5.  A U.S. company sells goods and collects bulk personal financial data about its U.S. customers. The U.S. company appoints a citizen of a country of concern, who is located in a country of concern, to its board of directors. This director would be a covered person, and the arrangement appointing the director would be an employment agreement. In connection with the board's data security and cybersecurity responsibilities, the director could access the bulk personal financial data. The director's employment would be a restricted transaction."], ["28:28:2.0.1.1.49.2.119.18", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.218 Entity.", "DOJ", "", "", "", "The term  entity  means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization."], ["28:28:2.0.1.1.49.2.119.19", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.219 Exempt transaction.", "DOJ", "", "", "", "The term  exempt transaction  means a data transaction that is subject to one or more exemptions described in subpart E of this part."], ["28:28:2.0.1.1.49.2.119.2", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.202 Attorney General.", "DOJ", "", "", "", "The term  Attorney General  means the Attorney General of the United States or the Attorney General's designee."], ["28:28:2.0.1.1.49.2.119.20", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.220 Former senior official.", "DOJ", "", "", "", "The term  former senior official  means either a \u201cformer senior employee\u201d or a \u201cformer very senior employee,\u201d as those terms are defined in 5 CFR 2641.104."], ["28:28:2.0.1.1.49.2.119.21", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.221 Foreign person.", "DOJ", "", "", "", "The term  foreign person  means any person that is not a U.S. person."], ["28:28:2.0.1.1.49.2.119.22", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.222 Government-related data.", "DOJ", "", "", "", "(a)  Definition.  The term  government-related data  means the following:\n\n(1) Any precise geolocation data, regardless of volume, for any location within any area enumerated on the Government-Related Location Data List in \u00a7 202.1401 which the Attorney General has determined poses a heightened risk of being exploited by a country of concern to reveal insights about locations controlled by the Federal Government, including insights about facilities, activities, or populations in those locations, to the detriment of national security, because of the nature of those locations or the personnel who work there. Such locations may include:\n\n(i) The worksite or duty station of Federal Government employees or contractors who occupy a national security position as that term is defined in 5 CFR 1400.102(a)(4);\n\n(ii) A military installation as that term is defined in 10 U.S.C. 2801(c)(4); or\n\n(iii) Facilities or locations that otherwise support the Federal Government's national security, defense, intelligence, law enforcement, or foreign policy missions.\n\n(2) Any sensitive personal data, regardless of volume, that a transacting party markets as linked or linkable to current or recent former employees or contractors, or former senior officials, of the United States Government, including the military and Intelligence Community.\n\n(b)  Examples of government-related data marketed by a transacting party \u2014(1)  Example 1.  A U.S. company advertises the sale of a set of sensitive personal data as belonging to \u201cactive duty\u201d personnel, \u201cmilitary personnel who like to read,\u201d \u201cDoD\u201d personnel, \u201cgovernment employees,\u201d or \u201ccommunities that are heavily connected to a nearby military base.\u201d The data is government-related data.\n\n(2)  Example 2.  In discussing the sale of a set of sensitive personal data with a covered person, a U.S. company describes the dataset as belonging to members of a specific named organization. The identified organization restricts membership to current and former members of the military and their families. The data is government-related data."], ["28:28:2.0.1.1.49.2.119.23", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.223 Human biospecimens.", "DOJ", "", "", "", "(a) The term  human biospecimens  means a quantity of tissue, blood, urine, or other human-derived material, including such material classified under any of the following 10-digit Harmonized System-based Schedule B numbers:\n\n(1) 0501.00.0000 Human hair, unworked, whether or not washed or scoured; waste of human hair\n\n(2) 3001.20.0000 Extracts of glands or other organs or of their secretions\n\n(3) 3001.90.0115 Glands and other organs, dried, whether or not powdered\n\n(4) 3002.12.0010 Human blood plasma\n\n(5) 3002.12.0020 Normal human blood sera, whether or not freeze-dried\n\n(6) 3002.12.0030 Human immune blood sera\n\n(7) 3002.12.0090 Antisera and other blood fractions, Other\n\n(8) 3002.51.0000 Cell therapy products\n\n(9) 3002.59.0000 Cell cultures, whether or not modified, Other\n\n(10) 3002.90.5210 Whole human blood\n\n(11) 3002.90.5250 Blood, human/animal, other\n\n(12) 9705.21.0000 Human specimens and parts thereof\n\n(b) Notwithstanding paragraph (a) of this section, the term  human biospecimens  does not include human biospecimens, including human blood, cell, and plasma-derived therapeutics, intended by a recipient solely for use in diagnosing, treating, or preventing any disease or medical condition."], ["28:28:2.0.1.1.49.2.119.24", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.224 Human `omic data.", "DOJ", "", "", "", "(a) The term  human `omic data  means:\n\n(1)  Human genomic data.  Data representing the nucleic acid sequences that constitute the entire set or a subset of the genetic instructions found in a human cell, including the result or results of an individual's \u201cgenetic test\u201d (as defined in 42 U.S.C. 300gg-91(d)(17)) and any related human genetic sequencing data.\n\n(2)  Human epigenomic data.  Data derived from a systems-level analysis of human epigenetic modifications, which are changes in gene expression that do not involve alterations to the DNA sequence itself. These epigenetic modifications include modifications such as DNA methylation, histone modifications, and non-coding RNA regulation. Routine clinical measurements of epigenetic modifications for individualized patient care purposes would not be considered epigenomic data under this rule because such measurements would not entail a systems-level analysis of the epigenetic modifications in a sample.\n\n(3)  Human proteomic data.  Data derived from a systems-level analysis of proteins expressed by a human genome, cell, tissue, or organism. Routine clinical measurements of proteins for individualized patient care purposes would not be considered proteomic data under this rule because such measurements would not entail a systems-level analysis of the proteins found in such a sample.\n\n(4)  Human transcriptomic data.  Data derived from a systems-level analysis of RNA transcripts produced by the human genome under specific conditions or in a specific cell type. Routine clinical measurements of RNA transcripts for individualized patient care purposes would not be considered transcriptomic data under this rule because such measurements would not entail a systems-level analysis of the RNA transcripts in a sample.\n\n(b) The term  human `omic data  excludes pathogen-specific data embedded in human `omic data sets."], ["28:28:2.0.1.1.49.2.119.25", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.225 IEEPA.", "DOJ", "", "", "", "The term  IEEPA  means the International Emergency Economic Powers Act (50 U.S.C. 1701  et seq. )."], ["28:28:2.0.1.1.49.2.119.26", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.226 Information or informational materials.", "DOJ", "", "", "", "(a)  Definition.  The term  information or informational materials  is limited to expressive material and includes publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds. It does not include data that is technical, functional, or otherwise non-expressive.\n\n(b)  Exclusions.  The term  information or informational materials  does not include:\n\n(1) Information or informational materials not fully created and in existence at the date of the data transaction, or the substantive or artistic alteration or enhancement of information or informational materials, or the provision of marketing and business consulting services, including to market, produce or co-produce, or assist in the creation of information or informational materials;\n\n(2) Items that were, as of April 30, 1994, or that thereafter become, controlled for export to the extent that such controls promote the nonproliferation or antiterrorism policies of the United States, or with respect to which acts are prohibited by 18 U.S.C. chapter 37.\n\n(c)  Examples \u2014(1)  Example 1.  A U.S. person enters into an agreement to create a customized dataset of bulk U.S. sensitive personal data that meets a covered person's specifications (such as the specific types and fields of data, date ranges, and other criteria) and to sell that dataset to the covered person. This customized dataset is not fully created and in existence at the date of the agreement, and therefore is not information or informational materials.\n\n(2)  Example 2.  A U.S. company has access to several pre-existing databases of different bulk U.S. sensitive personal data. The U.S. company offers, for a fee, to use data analytics to link the data across these databases to the same individuals and to sell that combined dataset to a covered person. This service constitutes a substantive alteration or enhancement of the data in the pre-existing databases and therefore is not information or informational materials."], ["28:28:2.0.1.1.49.2.119.27", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.227 Interest.", "DOJ", "", "", "", "Except as otherwise provided in this part, the term  interest,  when used with respect to property ( e.g.,  \u201can interest in property\u201d), means an interest of any nature whatsoever, direct or indirect."], ["28:28:2.0.1.1.49.2.119.28", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.228 Investment agreement.", "DOJ", "", "", "", "(a)  Definition.  The term  investment agreement  means an agreement or arrangement in which any person, in exchange for payment or other consideration, obtains direct or indirect ownership interests in or rights in relation to:\n\n(1) Real estate located in the United States; or\n\n(2) A U.S. legal entity.\n\n(b)  Exclusion for passive investments.  The term  investment agreement  excludes any investment that:\n\n(1) Is made:\n\n(i) Into a publicly traded security, with \u201csecurity\u201d defined in section 3(a)(10) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)), denominated in any currency that trades on a securities exchange or through the method of trading that is commonly referred to as \u201cover-the-counter,\u201d in any jurisdiction;\n\n(ii) Into a security offered by:\n\n(A) Any \u201cinvestment company\u201d (as defined in section 3(a)(1) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(a)(1)) that is registered with the United States Securities and Exchange Commission, such as index funds, mutual funds, or exchange traded funds; or\n\n(B) Any company that has elected to be regulated or is regulated as a business development company pursuant to section 54(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-53), or any derivative of either of the foregoing; or\n\n(iii) As a limited partner into a venture capital fund, private equity fund, fund of funds, or other pooled investment fund, or private entity, if the limited partner's contribution is solely capital and the limited partner cannot make managerial decisions, is not responsible for any debts beyond its investment, and does not have the formal or informal ability to influence or participate in the fund's or a U.S. person's decision making or operations;\n\n(2) Gives the covered person less than 10% in total voting and equity interest in a U.S. person; and\n\n(3) Does not give a covered person rights beyond those reasonably considered to be standard minority shareholder protections, including (a) membership or observer rights on, or the right to nominate an individual to a position on, the board of directors or an equivalent governing body of the U.S. person, or (b) any other involvement, beyond the voting of shares, in substantive business decisions, management, or strategy of the U.S. person.\n\n(c)  Examples \u2014(1)  Example 1.  A U.S. company intends to build a data center located in a U.S. territory. The data center will store bulk personal health data on U.S. persons. A foreign private equity fund located in a country of concern agrees to provide capital for the construction of the data center in exchange for acquiring a majority ownership stake in the data center. The agreement that gives the private equity fund a stake in the data center is an investment agreement. The investment agreement is a restricted transaction.\n\n(2)  Example 2.  A foreign technology company that is subject to the jurisdiction of a country of concern and that the Attorney General has designated as a covered person enters into a shareholders' agreement with a U.S. business that develops mobile games and social media apps, acquiring a minority equity stake in the U.S. business. The shareholders' agreement is an investment agreement. These games and apps developed by the U.S. business systematically collect bulk U.S. sensitive personal data of its U.S. users. The investment agreement explicitly gives the foreign technology company the ability to access this data and is therefore a restricted transaction.\n\n(3)  Example 3.  Same as Example 2, but the investment agreement either does not explicitly give the foreign technology company the right to access the data or explicitly forbids that access. The investment agreement nonetheless provides the foreign technology company with the sufficient ownership interest, rights, or other involvement in substantive business decisions, management, or strategy such that the investment does not constitute a passive investment. Because it is not a passive investment, the ownership interest, rights, or other involvement in substantive business decisions, management, or strategy gives the foreign technology company the ability to obtain logical or physical access, regardless of how the agreement formally distributes those rights. The investment agreement therefore involves access to bulk U.S. sensitive personal data. The investment agreement is a restricted transaction.\n\n(4)  Example 4.  Same as Example 3, but the U.S. business does not maintain or have access to any government-related data or bulk U.S. sensitive personal data ( e.g.,  a pre-commercial company or startup company). Because the data transaction cannot involve access to any government-related data or bulk U.S. sensitive personal data, this investment agreement does not meet the definition of a covered data transaction and is not a restricted transaction."], ["28:28:2.0.1.1.49.2.119.29", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.229 Iran.", "DOJ", "", "", "", "The term  Iran  means the Islamic Republic of Iran, as well as any political subdivision, agency, or instrumentality thereof."], ["28:28:2.0.1.1.49.2.119.3", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.203 Assistant Attorney General.", "DOJ", "", "", "", "The term  Assistant Attorney General  means the Assistant Attorney General, National Security Division, United States Department of Justice, or the Assistant Attorney General's designee."], ["28:28:2.0.1.1.49.2.119.30", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.230 Knowingly.", "DOJ", "", "", "", "(a)  Definition.  The term  knowingly,  with respect to conduct, a circumstance, or a result, means that a person has actual knowledge, or reasonably should have known, of the conduct, the circumstance, or the result.\n\n(b)  Examples \u2014(1)  Example 1.  A U.S. company sells DNA testing kits to U.S. consumers and maintains bulk human genomic data collected from those consumers. The U.S. company enters into a contract with a foreign cloud-computing company (which is not a covered person) to store the U.S. company's database of human genomic data. The foreign company hires employees from other countries, including citizens of countries of concern who primarily reside in a country of concern, to manage databases for its customers, including the U.S. company's human genomic database. There is no indication of evasion, such as the U.S. company knowingly directing the foreign company's employment agreements with covered persons, or the U.S. company engaging in and structuring these transactions to evade the regulations. The cloud-computing services agreement between the U.S. company and the foreign company would not be prohibited or restricted, because that covered data transaction is between a U.S. person and a foreign company that does not meet the definition of a covered person. The employment agreements between the foreign company and the covered persons would not be prohibited or restricted because those agreements are between foreign persons.\n\n(2)  Example 2.  A U.S. company transmits the bulk U.S. sensitive personal data of U.S. persons to a country of concern, in violation of this part, using a fiber optic cable operated by another U.S. company. The U.S. cable operator has not knowingly engaged in a prohibited transaction or a restricted transaction solely by virtue of operating the fiber optic cable because the U.S. cable operator does not know, and reasonably should not know, the content of the traffic transmitted across the fiber optic cable.\n\n(3)  Example 3.  A U.S. service provider provides a software platform on which a U.S. company processes the bulk U.S. sensitive personal data of its U.S.-person customers. While the U.S. service provider is generally aware of the nature of the U.S. company's business, the U.S. service provider is not aware of the kind or volume of data that the U.S. company processes on the platform, how the U.S. company uses the data, or whether the U.S. company engages in data transactions. The U.S. company also primarily controls access to its data on the platform, with the U.S. service provider accessing the data only for troubleshooting or technical support purposes, upon request by the U.S. company. Subsequently, without the actual knowledge of the U.S. service provider and without providing the U.S. service provider with any information from which the service provider should have known, the U.S. company grants access to the data on the U.S. service provider's software platform to a covered person through a covered data transaction, in violation of this part. The U.S. service provider itself, however, has not knowingly engaged in a restricted transaction by enabling the covered persons' access via its software platform.\n\n(4)  Example 4.  Same as Example 3, but in addition to providing the software platform, the U.S. company's contract with the U.S. service provider also outsources the U.S. company's processing and handling of the data to the U.S. service provider. As a result, the U.S. service provider primarily controls access to the U.S. company's bulk U.S. sensitive personal data on the platform. The U.S. service provider employs a covered person and grants access to this data as part of this employment. Although the U.S. company's contract with the U.S. service provider is not a restricted transaction, the U.S. service provider's employment agreement with the covered person is a restricted transaction. The U.S. service provider has thus knowingly engaged in a restricted transaction by entering into an employment agreement that grants access to its employee because the U.S. service provider knew or should have known of its employee's covered person status and, as the party responsible for processing and handling the data, the U.S. service provider was aware of the kind and volume of data that the U.S. company processes on the platform.\n\n(5)  Example 5.  A U.S. company provides cloud storage to a U.S. customer for the encrypted storage of the customer's bulk U.S. sensitive personal data. The U.S. cloud-service provider has an emergency back-up encryption key for all its customers' data, but the company is contractually limited to using the key to decrypt the data only at the customer's request. The U.S. customer's systems and access to the key become disabled, and the U.S. customer requests that the cloud-service provider use the back-up encryption key to decrypt the data and store it on a backup server while the customer restores its own systems. By having access to and using the backup encryption key to decrypt the data in accordance with the contractual limitation, the U.S. cloud-service provider does not and reasonably should not know the kind and volumes of the U.S. customer's data. If the U.S. customer later uses the cloud storage to knowingly engage in a prohibited transaction, the U.S. cloud-service provider's access to and use of the backup encryption key does not mean that the U.S. cloud-service provider has also knowingly engaged in a restricted transaction.\n\n(6)  Example 6.  A prominent human genomics research clinic enters into a cloud-services contract with a U.S. cloud-service provider that specializes in storing and processing healthcare data to store bulk human genomic research data. The cloud-service provider hires IT personnel in a country of concern, who are thus covered persons. While the data that is stored is encrypted, the IT personnel can access the data in encrypted form. The employment agreement between the U.S. cloud-service provider and the IT professionals in the country of concern is a prohibited transaction because the agreement involves giving the IT personnel access to the encrypted data and constitutes a transfer of human genomic data. Given the nature of the research institution's work and the cloud-service provider's expertise in storing healthcare data, the cloud-service provider reasonably should have known that the encrypted data is bulk U.S. sensitive personal data covered by the regulations. The cloud-service provider has therefore knowingly engaged in a prohibited transaction (because it involves access to human genomic data)."], ["28:28:2.0.1.1.49.2.119.31", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.231 Licenses; general and specific.", "DOJ", "", "", "", "(a)  General license.  The term  general license  means a written license issued pursuant to this part authorizing a class of transactions and not limited to a particular person.\n\n(b)  Specific license.  The term  specific license  means a written license issued pursuant to this part to a particular person or persons, authorizing a particular transaction or transactions in response to a written license application."], ["28:28:2.0.1.1.49.2.119.32", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.232 Linked.", "DOJ", "", "", "", "(a)  Definition.  The term  linked  means associated.\n\n(b)  Examples \u2014(1)  Example 1.  A U.S. person transfers two listed identifiers in a single spreadsheet\u2014such as a list of names of individuals and associated MAC addresses for those individuals' devices. The names and MAC addresses would be considered linked.\n\n(2)  Example 2.  A U.S. person transfers two listed identifiers in different spreadsheets\u2014such as a list of names of individuals in one spreadsheet and MAC addresses in another spreadsheet\u2014to two related parties in two different covered data transactions. The names and MAC addresses would be considered linked, provided that some correlation existed between the names and MAC addresses ( e.g.,  associated employee ID number is also listed in both spreadsheets).\n\n(3)  Example 3.  A U.S. person transfers a standalone list of MAC addresses, without any additional listed identifiers. The standalone list does not include covered personal identifiers. That standalone list of MAC addresses would not become covered personal identifiers even if the receiving party is capable of obtaining separate sets of other listed identifiers or sensitive personal data through separate covered data transactions with unaffiliated parties that would ultimately permit the association of the MAC addresses to specific persons. The MAC addresses would not be considered linked or linkable to those separate sets of other listed identifiers or sensitive personal data."], ["28:28:2.0.1.1.49.2.119.33", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.233 Linkable.", "DOJ", "", "", "", "The term  linkable  means reasonably capable of being linked.\n\nData is considered linkable when the identifiers involved in a single covered data transaction, or in multiple covered data transactions or a course of dealing between the same or related parties, are reasonably capable of being associated with the same person(s). Identifiers are not linked or linkable when additional identifiers or data not involved in the relevant covered data transaction(s) would be necessary to associate the identifiers with the same specific person(s)."], ["28:28:2.0.1.1.49.2.119.34", 28, "Judicial Administration", "I", "", "202", "PART 202\u2014ACCESS TO U.S. SENSITIVE PERSONAL DATA AND GOVERNMENT-RELATED DATA BY COUNTRIES OF CONCERN OR COVERED PERSONS", "B", "Subpart B\u2014Definitions", "", "\u00a7 202.234 Listed identifier.", "DOJ", "", "", "", "The term  listed identifier  means any piece of data in any of the following data fields:\n\n(a) Full or truncated government identification or account number (such as a Social Security number, driver's license or State identification number, passport number, or Alien Registration Number);\n\n(b) Full financial account numbers or personal identification numbers associated with a financial institution or financial-services company;\n\n(c) Device-based or hardware-based identifier (such as International Mobile Equipment Identity (\u201cIMEI\u201d), Media Access Control (\u201cMAC\u201d) address, or Subscriber Identity Module (\u201cSIM\u201d) card number);\n\n(d) Demographic or contact data (such as first and last name, birth date, birthplace, ZIP code, residential street or postal address, phone number, email address, or similar public account identifiers);\n\n(e) Advertising identifier (such as Google Advertising ID, Apple ID for Advertisers, or other mobile advertising ID (\u201cMAID\u201d));\n\n(f) Account-authentication data (such as account username, account password, or an answer to security questions);\n\n(g) Network-based identifier (such as Internet Protocol (\u201cIP\u201d) address or cookie data); or\n\n(h) Call-detail data (such as Customer Proprietary Network Information (\u201cCPNI\u201d))."]], "truncated": false, "filtered_table_rows_count": 215, "expanded_columns": [], "expandable_columns": [], "columns": ["section_id", "title_number", 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