[Federal Register Volume 85, Number 234 (Friday, December 4, 2020)]
[Rules and Regulations]
[Pages 78224-78230]
[FR Doc No: 2020-26166]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 230, 232, 240, 249, and 270

[Release Nos. 33-10889; 34-90441; 39-2534; IC-34096]

Electronic Signatures in Regulation S-T Rule 302

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: We are adopting amendments to Regulation S-T and the
Electronic Data Gathering, Analysis, and Retrieval system (``EDGAR'')
Filer Manual (``EDGAR Filer Manual'' or ``Filer Manual'') to permit the
use of electronic signatures in signature authentication documents
required under Regulation S-T in connection with electronic filings on
EDGAR that are required to be signed. We are also adopting
corresponding revisions to several rules and forms under the Securities
Act of 1933 (``Securities Act''), Securities Exchange Act of 1934
(``Exchange Act''), and Investment Company Act of 1940 (``Investment
Company Act'') to permit the use of electronic signatures in signature
authentication documents in connection with certain other filings.

DATES: Effective December 4, 2020. The incorporation by reference of
the EDGAR Filer Manual is approved by the Director of the Federal
Register as of December 4, 2020.

FOR FURTHER INFORMATION CONTACT: Charles Kwon, Office of Rulemaking, at
(202) 551-3430, Division of Corporation Finance; Terri Jordan, Office
of Rulemaking, at<PHONE_NUMBER>, Division of Investment Management; or
Devin Ryan, Office of Chief Counsel, at<PHONE_NUMBER>, Division of
Trading and Markets; U.S. Securities and Exchange Commission, 100 F
Street NE, Washington, DC 20549.

SUPPLEMENTARY INFORMATION: We are adopting amendments to the following
rules and forms to permit the use of electronic signatures in signature
authentication documents in connection with certain specified filings,
including electronic filings on EDGAR:

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           Commission reference                 CFR citation (17 CFR)
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Securities Act \1\:
    Securities Act Rule 402...............  Sec.   230.402.
    Securities Act Rule 471...............  Sec.   230.471.
Regulation S-T............................  Sec.  Sec.   232.10 through
                                             232.903.
    Rule 301..............................  Sec.   232.301.
    Rule 302..............................  Sec.   232.302.
Exchange Act \2\:
    Exchange Act Rule 12b-11..............  Sec.   240.12b-11.
    Exchange Act Rule 14d-1...............  Sec.   240.14d-1.
    Exchange Act Rule 15Fb1-1.............  Sec.   240.15Fb1-1.
    Exchange Act Rule 16a-3...............  Sec.   240.16a-3.
    Form CB...............................  Sec.   249.480.
Investment Company Act:
    Investment Company Act Rule 8b-11.....  Sec.   270.8b-11.
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    \1\ 15 U.S.C. 77a et seq.
    \2\ 15 U.S.C. 78a et seq.
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    We are also adopting an updated EDGAR Filer Manual, Volume II:
``EDGAR Filing'' (Version 55) (November 2020) that sets forth certain
requirements that the electronic signing process must meet when
electronic signatures are used. The updated Filer Manual is
incorporated by reference into the Code of Federal Regulations.\3\
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    \3\ 17 CFR 232.301.
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I. Discussion

    Regulation S-T, in conjunction with the EDGAR Filer Manual and
other applicable rules, regulations, and forms, governs the electronic
submission of documents filed with or otherwise submitted to the
Securities and Exchange Commission (the ``Commission'') through
EDGAR.\4\ Title 17, section 232.302(b) (Rule 302(b)) currently requires
that each signatory to an electronic filing manually sign a signature
page or other document (``authentication document'') before or at the
time of the electronic filing to authenticate, acknowledge, or
otherwise adopt the signature that appears in typed form within the
electronic filing.\5\ An electronic filer must retain the
authentication document with respect to each signatory to the
electronic filing for a period of five years and must furnish a copy of
it to the Commission or its staff upon request.\6\
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    \4\ Rule 10(a) of Regulation S-T [17 CFR 232.10a]. The EDGAR
Filer Manual contains the technical specifications needed for filers
to make submissions through the EDGAR system. The Commission
originally adopted the EDGAR Filer Manual on April 1, 1993, with an
effective date of April 26, 1993. Adoption of EDGAR Filer Manual,
Release No. 33-6986 (Apr. 1, 1993) [58 FR 18638 (Apr. 9, 1993)]. The
amendments adopted in this rulemaking do not apply to the notarized
signature requests for EDGAR access pursuant to the requirements of
Rule 10(b) of Regulation S-T. Moreover, the authentication document
discussed herein is distinct from the authentication document
referenced in Volume I of the Filer Manual in connection with Rule
10(b) notarized authentication documents.
    \5\ Pursuant to Rule 302(a) of Regulation S-T, signatures
required in any electronic submission must be in typed form.
    \6\ See Rule 302(b) of Regulation S-T. As discussed below,
certain rules and forms under the Securities Act and the Exchange
Act also require authentication documents in connection with certain
filings when these filings contain typed, rather than manual,
signatures. References to ``authentication documents'' in this
release refers to such documents as required by Rule 302(b) or these
other rules and forms, as the context requires.
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    The Commission has stated that the authentication document
requirement in Rule 302(b) ``was established to provide a satisfactory
means by which signatories could authenticate and adopt their typed
signatures appearing on filed documents for evidentiary purposes.'' \7\
In March 2020, the Commission staff provided its views on, among other
things, complying with this requirement when considering the public
health and safety concerns related to COVID-19.\8\ In April 2020, the
Commission received a rulemaking petition requesting that we permit the
use of electronic signatures when executing authentication documents
under Rule 302(b).\9\ The rulemaking petition states, among other
things, that ``the current COVID-19 situation has . . . significantly
increased the difficulties associated with obtaining manual `wet'
signatures'' and that ``[i]mprovements in electronic signature software
technology make it possible to confirm (with at least equal confidence
to the collection of manual signatures) who has signed a document and
when it was signed.'' In June 2020, nearly 100 public companies jointly

submitted a letter in support of the rulemaking petition.\10\
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    \7\ Application of the Electronic Signatures in Global and
National Commerce Act to Record Retention Requirements Pertaining to
Issuers under the Securities Act of 1933, Securities Exchange Act of
1934 and Regulation S-T, Release No. 33-7985 (June 14, 2001) [66 FR
33175 (June 21, 2001)] (citing Rulemaking for EDGAR System, Release
No. 33-6977, Section III.F.2 (Feb. 23, 1993) [58 FR 14628 (Mar. 18,
1993)]). In the 2001 release, the Commission issued guidance stating
that the requirements to retain authentication documents are not
subject to the Electronic Signatures in Global and National Commerce
Act (``E-SIGN Act''), because ``authentication documents are records
generated principally for governmental purposes rather than in
connection with a business, consumer or commercial transaction.''
    \8\ See Staff Statement Regarding Rule 302(b) of Regulation S-T
in Light of COVID-19 Concerns (Mar. 24, 2020), available at https://www.sec.gov/corpfin/announcement/rule-302b-regulation-s-t-covid-19-update.
    \9\ Specifically, the rulemaking petition requested that the
Commission amend Rule 11 and Rule 302 of Regulation S-T, as well as
any other necessary rules and forms, to permit the use of electronic
signatures in addition to manual signatures when executing
authentication documents under Rule 302 and to provide that
authentication documents may be retained physically or
electronically for the requisite five-year period. See letter from
Wilson Sonsini Goodrich & Rosati, Fenwick & West LLP, and Cooley
LLP, available at https://www.sec.gov/rules/petitions/2020/petn4-760.pdf.
    \10\ See comment letter from Richard Blake, et al., available at
https://www.sec.gov/comments/4-760/4760-7278993-217809.pdf. We have
not received any letters that oppose the rulemaking petition.
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    After considering the widespread use of electronic signatures and
technological developments in the authentication and security of
electronic signatures,\11\ and the issues raised in the rulemaking
petition, we have reevaluated the requirement that signatories may only
manually sign authentication documents under Rule 302(b). As a result,
we are amending Rule 302(b) to permit a signatory to an electronic
filing who follows certain procedures discussed herein to sign an
authentication document through an electronic signature that meets
certain requirements specified in the EDGAR Filer Manual.\12\ This
amendment will provide additional flexibility in complying with the
authentication document requirement by providing signatories with the
option of signing an authentication document either manually or
electronically, while requiring the signing process for an electronic
signature to meet certain conditions that are consistent with the
evidentiary purposes of the authentication document. The existing
requirements of Rule 302(b) will be otherwise unchanged, including the
requirements that an electronic filer retain the authentication
document for a period of five years and furnish a copy of it upon
request to the Commission or its staff.\13\
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    \11\ See discussion in Section IV. Economic Analysis infra.
    \12\ We are also adopting amendments to Rule 302(a) of
Regulation S-T to update the definition of ``signature,'' by
revising ``electronic entry'' to ``computer representation,''
``letters'' to ``symbols,'' and by removing references to obsolete
terminology (``magnetic impulse''). This amendment does not change
the substance or intended meaning of the definition.
    \13\ See new Rules 302(b)(1) and (b)(3).
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    We are setting forth the requirements for the electronic signature
signing process in the EDGAR Filer Manual, which will specify that,
when a signatory signs an authentication document using an electronic
signature, the signing process for the electronic signature must, at a
minimum:
     Require the signatory to present a physical, logical, or
digital credential that authenticates the signatory's individual
identity;
     Reasonably provide for non-repudiation of the signature;
     Provide that the signature be attached, affixed, or
otherwise logically associated with the signature page or document
being signed; and
     Include a timestamp to record the date and time of the
signature.\14\
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    \14\ For purposes of the process requirements underlying the
electronic signature of authentication documents, we are defining
the terms ``electronic signature,'' ``credential,'' and ``non-
repudiation'' in the EDGAR Filer Manual. The term ``electronic
signature'' is defined as an electronic sound, symbol, or process,
attached to or logically associated with a record and executed or
adopted by a person with the intent to sign the record. While this
definition is consistent with the widely used definition of the term
``electronic signature'' in the E-SIGN Act, 15 U.S.C. 7006, we
continue to believe that the E-SIGN Act does not apply to the
Commission's requirements related to authentication documents. See
supra note 7. The term ``credential'' is defined as an object or
data structure exclusively possessed and controlled by an individual
to assert identity and provide for authentication. The term ``non-
repudiation'' is defined as assurance that an individual cannot
falsely deny having performed a particular action.
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    These requirements are intended to be technologically neutral and
allow for different types and forms of electronic signatures, provided
that the signing process satisfies a number of conditions that relate
to the validity and enforceability of an electronic signature. The
signing process must incorporate a security procedure that requires the
authentication of a signatory's individual identity through a physical,
logical, or digital credential, and the signing process must reasonably
provide for the non-repudiation of the electronic signature. The
signing process requirements also provide that the signature be
logically associated with the signature page or document being signed,
thereby providing the signatory with notice of the nature and substance
of the document and an opportunity to review it before signing, and
that the electronic signature be linked to the signature page or
document in a manner that allows for later confirmation that the
signatory signed the signature page or document. Finally, given that a
signatory must execute an authentication document pursuant to Rule
302(b) before or at the time an electronic filing is made, the signing
process must include a timestamp that records the date and time of the
electronic signature.
    We have included a requirement in new Rule 302(b)(2) that, before a
signatory initially uses an electronic signature to sign an
authentication document, the signatory must manually sign a document
attesting that the signatory agrees that the use of an electronic
signature in any authentication document constitutes the legal
equivalent of such individual's manual signature for purposes of
authenticating the signature to any filing for which it is provided
(``initial electronic signature authentication document'').\15\ An
electronic filer must retain this manually signed document for as long
as the signatory may use an electronic signature to sign an
authentication document and for a minimum period of seven years after
the date of the most recent electronically signed authentication
document. Pursuant to Rule 302(b)(3), the electronic filer shall
furnish a copy of it upon request to the Commission or its staff.\16\
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    \15\ See new Rule 302(b)(2). Additionally, Section 6(a) of the
Securities Act provides that signatures to any Securities Act
registration statement shall be presumed to have been written by
authority of the person(s) who signed it, and the burden of proof,
in the event such authority shall be denied, shall be upon the
denying party. See 15 U.S.C. 77f(a).
    \16\ A manually signed document under Rule 302(b), including an
initial electronic signature authentication document or a manually
signed authentication document, may be stored via electronic means.
See new Rule 302(b)(3).
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    In addition, we are amending certain rules and forms under the
Securities Act, Exchange Act, and Investment Company Act to allow the
use of electronic signatures in authentication documents in connection
with certain other filings when these filings contain typed, rather
than manual, signatures.\17\ These amendments extend comparable
treatment to these filers in allowing electronically signed
authentication documents under generally the same conditions applicable
to electronic filers under Rule 302(b).\18\
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    \17\ Securities Act Rules 402(e) and 471(b); Exchange Act Rules
12b-11(d), 14d-1(h), 16a-3(i) and, 15Fb1-1; Form CB; and Investment
Company Act Rule 8b-11. Rules 402(e), 471(b), 12b-11(d), 14d-1(h);
16a-3(i); and 8b-11 allow manual, typed, duplicated, or faxed
signatures on paper filings, with a manual signature retention
requirement for typed, duplicated, or faxed signatures. See Phase
One Recommendation of Task Force on Disclosure Simplification,
Release No. 33-7300 (May 31, 1996) [61 FR 30397 (June 14, 1996)] at
30400 (stating that the Commission was adopting these requirements
``to provid[e] comparable treatment to both paper and electronic
filers'' with respect to the signature and authentication
requirements). The signature requirements in Rules 12b-11(d) and
14d-1(h) apply solely with respect to the scope of regulation
defined in Rules 12b-11 and 14d-1(a), respectively.
    \18\ The amendments to these rules include a cross reference to
the requirements set forth in Rule 302(b) of Regulation S-T.
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    Along with the adoption of an updated EDGAR Filer Manual, we are
amending Rule 301 of Regulation S-T to provide for the incorporation by
reference into the Code of Federal Regulations of the current
revisions. This incorporation by reference was approved by the Director
of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR
part 51. The updated EDGAR Filer Manual is available at https://www.sec.gov/info/edgar/edmanuals.htm. The EDGAR Filer Manual also is
available for website viewing and printing in the

Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m.

II. Procedural and Other Matters

    The Administrative Procedure Act (``APA'') generally requires an
agency to publish notice of a rulemaking in the Federal Register and
provide an opportunity for public comment.\19\ This requirement does
not apply, however, to rules of agency organization, procedure, or
practice,\20\ or if the agency ``for good cause finds . . . that notice
and public procedure thereon are impracticable, unnecessary, or
contrary to the public interest.'' \21\ We find that these amendments
relate to agency procedures or practice and do not substantially alter
the rights and obligations of non-agency parties. We also find that
notice and comment are unnecessary because the amendments merely
provide an optional alternative method for signatories to sign
authentication documents pursuant to Rule 302(b) and corresponding
provisions in our rules and forms. It follows that the amendments do
not require analysis under the Regulatory Flexibility Act or a report
to Congress under the Small Business Regulatory Fairness Act.\22\
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    \19\ See 5 U.S.C. 553(b) and (c).
    \20\ 5 U.S.C. 553(b)(3)(A).
    \21\ 5 U.S.C. 553(b)(3)(B).
    \22\ See 5 U.S.C. 601(2) (for purposes of a Regulatory
Flexibility Act analysis, the term ``rule'' means any rule for which
the agency publishes a general notice of proposed rulemaking) and 5
U.S.C. 804(3)(C) (for purposes of Congressional review of agency
rulemaking, the term ``rule'' does not include any rule of agency
organization, procedure, or practice that does not substantially
affect the rights or obligations of non-agency parties).
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    The APA generally requires that an agency publish an adopted rule
in the Federal Register at least 30 days before it becomes
effective.\23\ This requirement, however, does not apply if the agency
finds good cause for making the rule effective sooner.\24\ For the same
reasons we are forgoing notice and comment, the Commission finds good
cause to make these amendments effective upon publication in the
Federal Register. We further believe signatories and electronic filers
should have the option of using electronic signatures in authentication
documents as soon as practicable and find there is good cause for these
amendments to take effect upon publication in the Federal Register. We
also believe the amendments relieve a restriction in that execution of
authentication documents no longer will be limited to manual or ``wet''
signatures.\25\
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    \23\ 5 U.S.C. 553(d)(3).
    \24\ Id.
    \25\ 5 U.S.C. 553(d)(1).
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    If any of the provisions of these rules, or the application thereof
to any person or circumstance, is held to be invalid, such invalidity
shall not affect other provisions or application of such provisions to
other persons or circumstances that can be given effect without the
invalid provision or application.

III. Paperwork Reduction Act

    Certain provisions of our rules and forms contain ``collection of
information'' requirements within the meaning of the Paperwork
Reduction Act of 1995 (``PRA'').\26\ The hours and costs associated
with preparing and filing forms and retaining records--including those
associated with signature authentication requirements--constitute
reporting and cost burdens imposed by the collection of information
requirements. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information requirement unless
it displays a currently valid Office of Management and Budget control
number. Compliance with the information collections is mandatory. The
paperwork burden associated with the Commission's signature
authentication requirements is imposed through the forms that are
subject to those requirements and is reflected in the analysis of those
forms. Responses to these information collections are not kept
confidential and there is no mandatory retention period for the
information disclosed, although filers are required to retain an
authentication document for a period of five years.
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    \26\ 44 U.S.C. 3501 et seq.
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    As noted above, the amendments do not substantively alter the
authentication document requirements, but rather provide an optional
alternative method for signatories to sign authentication documents
electronically. Although the requirements underlying the use of an
electronic signature differ somewhat from those for use of a manual
signature in connection with an authentication document (e.g., an
initial electronic signature authentication document will be required
to be retained for seven years), on balance, we expect the amendments
to incrementally ease the burden associated with executing such a
document. It is difficult to predict how many filers will take
advantage of the alternative signing method; however, we expect a filer
would utilize this optional method only if it determines that the
burdens of this alternative method are less than existing methods.
Given the incremental nature of the amendments and in order to avoid
overestimating any potential reduction in paperwork burdens, we are not
revising any burden and cost estimates in connection with these
amendments.

IV. Economic Analysis

    The final amendments provide signatories with additional
flexibility in connection with documents filed with the Commission,
including electronic filings made on EDGAR, by permitting the use of
electronic signatures in authentication documents. Due to technological
advances that have enabled electronic signatures to become as credible
as their manual, ``wet'' counterparts and the potential for efficiency
gains, we believe providing such flexibility is justified. Below, we
consider the benefits and costs, as well as the effects on efficiency,
competition, and capital formation that we anticipate will result from
the final amendments.\27\ We evaluate the economic effects of the
amendments relative to a baseline which includes the current regulatory
requirements applicable to filers and signatories, as discussed in
Section I above, as well as current practices. These requirements apply
to both electronic and paper filers. The vast majority of Commission
filings must be made electronically.\28\ Based on information from
2019, the Commission received approximately 644,000 electronic filings
from approximately 131,000 filers. By contrast staff analysis of
filings in EDGAR identified 4,881 scanned paper filings from 2,603
filers in 2019.
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    \27\ Section 3(f) of the Exchange Act, Section 2(b) of the
Securities Act, and Section 2(c) of the Investment Company Act state
that when engaging in rulemaking that requires us to consider or
determine whether an action is necessary or appropriate in (or, with
respect to the Investment Company Act, consistent with) the public
interest, we must consider, in addition to the protection of
investors, whether the action will promote efficiency, competition,
and capital formation. Additionally, Section 23(a)(2) of the
Exchange Act requires us, when making rules or regulations under the
Exchange Act, to consider, among other matters, the impact that any
such rule or regulation would have on competition and states that
the Commission shall not adopt any such rule or regulation which
would impose a burden on competition that is not necessary or
appropriate in furtherance of the Exchange Act.
    \28\ 17 CFR 230.101.
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    Developments in cryptography and computing have enabled the
development of digital signatures that are at least as credible as
manual signatures. Digital signatures available today can: (i) Assure
users that signed documents have not been altered; (ii) identify the
signatory; and (iii) make it

impossible for a signatory to deny signing the document.\29\ Moreover,
digital signature systems can be deployed on a broad range of computing
platforms,\30\ and are widely accessible at low cost.
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    \29\ See William Kuechler & Fritz H. Grupe, Digital Signatures:
A Business View, 19(4) Info. Sys. Mgmt. 19 (2003).
    \30\ Id.
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    Technological developments have also increased the efficiency of
electronic communication relative to reliance on the mail. Remote work,
as opposed to work on a business's premises, has increased for
management, professional, and related occupations.\31\ These changes
have been facilitated by developments in technology and communications
infrastructure,\32\ as a greater volume of business communication now
occurs electronically, rather than through paper, workers in these
occupations have adapted to electronic communications. Further, remote
work has increased substantially in recent months due to the COVID-19
pandemic. Survey evidence collected during the pandemic shows that a
substantial proportion of the U.S. labor force now works from home full
time.\33\ At the same time, measures related to COVID-19 have, at the
margin, increased the time associated with printing and mailing, and in
some cases have increased the risk of delay.\34\ In response to
lengthier or less certain printing and mailing times, filers may incur
additional costs by hastening internal processes to meet external
deadlines.
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    \31\ See Rachel M. Krantz-Kent, Where did workers perform their
jobs in the early 21st century?, U.S. Bureau of Lab. Stat.: Monthly
Lab. Rev. (July 2019), available at: https://doi.org/10.21916/mlr.2019.16 (last accessed October 22, 2020).
    \32\ Id.
    \33\ See Erik Brynjolfsson et al., COVID-19 and remote work: an
early look at US data (Nat'l Bureau of Economic Research, No.
w27344, 2020). See also May Wong, Stanford Research Provides a
Snapshot of a New Working-From-Home Economy (June 29, 2020),
available at: https://news.stanford.edu/2020/06/29/snapshot-new-working-home-economy/ (last accessed Oct. 13, 2020).
    \34\ For example, The U.S. Postal Service announced that certain
two-day and three-day service commitments were extended to three
days and four days, respectively, and suspended services or service
guarantees for international shipments. Private carriers similarly
suspended guarantees. See e.g., USPS[supreg] Coronavirus Updates:
Expected Delivery Changes, USPS: FAQ (Apr. 17, 2020) available at:
https://faq.usps.com/s/article/USPS-Coronavirus-Updates-Expected-Delivery-Changes (last accessed Oct. 10, 2020).
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    We expect the amendments to Rule 302(b), and the related amendments
to certain rules and forms under the Securities Act, the Exchange Act,
and the Investment Company Act will result in cost savings for those
filers whose signatories sign an authentication document by using an
electronic signature. Filers who choose this option would no longer be
required to have a signatory manually sign a signature page or other
document and convey that document to the filer for each typed signature
they provide in each filing that is made. Thus filers and signatories
would not incur related costs of printing or mailing such a document in
connection with each typed signature and may experience cost reductions
to the extent that retaining electronic authentication documents is
less costly than retaining manual authentication documents. It is
difficult to quantify cost savings per filing as they would depend on
the nature of the filing and the circumstances of the individual
signatories.\35\ Further, cost savings per filer would depend on the
number and nature of filings each filer must make.\36\ To the extent
that the amendments make filers' compliance programs more efficient and
less expensive, filers may be able to reallocate resources otherwise
used for printing or mailing authentication documents to more
productive uses. Filers may experience greater cost savings to the
extent they choose to incorporate processes for electronic signatures
in the design of their overall compliance programs and such processes
are lower cost than their manual equivalents.
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    \35\ Analysis of electronic filers in EDGAR in 2019 demonstrates
substantial variation in the number of signatories per filing. For
example, we estimate 99.0% of 6,660 Form 10-K filings included more
than one signatory in 2019, while only 1.6% of 14,884 Form 497
filings included more than one signatory in 2019. Staff were able to
identify approximately 105,000 electronic filings with multiple
signatories in 2019 by searching for signature tags in all
electronic filings. Although this method may fail to identify
certain filings with multiple signatories that do not tag individual
signatures, this sample serves to demonstrate the degree of
variability in the number of signatories across form types.
    \36\ Analysis of electronic filers in EDGAR in 2019 demonstrates
a high degree in variation in the number of filings per filer. Staff
estimate that the median number of filings per filer across the full
sample of filers was two, however, the 25 filers with the largest
number of filings in 2019 each submitted more than 850 filings.
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    We do not expect the amendments to Rule 302(b) to impose
substantial additional costs on filers because filers will be permitted
to continue to use manually signed authentication documents and
existing policies and procedures if they choose to do so. Because the
electronic signing process for authentication documents would be
optional, we expect that filers would avail themselves of this option
only to the extent that the potential benefits justified any associated
costs.
    Filers that choose to avail themselves of the ability to use
electronic signatures in authentication documents may need to update
their compliance systems to ensure that a signatory manually signs a
document attesting that the signatory agrees that the use of an
electronic signature in any authentication document constitutes the
legal equivalent of such individual's manual signature, before first
utilizing an electronic signature to sign an authentication document.
Further, filers must retain this initial signature authentication
document for a minimum period of seven years after the date of the most
recent electronically signed authentication document, and must furnish
a copy of it upon request to the Commission or its staff. However, we
generally expect these one-time costs to be relatively low, and once
such a filer has updated its systems, we do not believe these
substantive requirements will result in additional on-going costs
because producing and retaining authentication documents are existing
requirements under Rule 302(b). Additionally, such filers may incur
costs associated with compliance with the electronic signing process
requirements prescribed in the EDGAR Filer Manual. These costs include
initial costs related to identifying and acquiring software capable of
producing electronic signatures that meet the updated process
requirements and likely also include annual fees associated with
ongoing use of electronic signature software.
    We do not expect the amendments to have meaningful effects on
competition or capital formation. As noted above, the amendments may
improve efficiency, to the extent that they permit filers to lower the
costs associated with complying with the amended rules. The amendments
could reduce the variable cost (cost per filing) associated with
meeting Commission filing requirements. If meeting Commission filing
requirements involves high fixed costs then this reduction in variable
costs could reduce the average cost of filing for high-volume filers
more than for low-volume filers. Similarly, a filer's printing and
mailing costs under the baseline depend both on the number of
signatures required for its filings and the need for mailing manual
signature pages to a central location. Thus, filers that have a larger
number of signatories, or have signatories that are more geographically
dispersed, likely would experience greater cost savings than filers
with fewer or less-dispersed signatories.
    Finally, we considered alternative ways of permitting the use of
electronic

signatures in authentication documents. The Commission could have
chosen not to adopt a requirement to create or retain an initial
electronic signature authentication document. Such an alternative would
have increased cost savings for filers, but could have undermined the
evidentiary value of the authentication document. The Commission also
considered longer or shorter retention periods for authentication
documents. Longer (shorter) retention periods could increase (decrease)
the costs associated with storing authentication documents, while
potentially increasing (decreasing) the evidentiary benefits of such
documents.

V. Statutory Authority

    The amendments contained in this release are being adopted under
the authority in Sections 6, 7, 8, 10, and 19(a) of the Securities Act
of 1933,\37\ Sections 3, 12, 13, 14, 15, 15B, 23, and 35A of the
Securities Exchange Act of 1934,\38\ Section 319 of the Trust Indenture
Act of 1939,\39\ and Sections 8, 30, 31, and 38 of the Investment
Company Act of 1940.\40\
---------------------------------------------------------------------------

    \37\ 15 U.S.C. 77f, 77g, 77h, 77j, and 77s(a).
    \38\ 15 U.S.C. 78c, 78l, 78m, 78n, 78o, 78o-4, 78w, and 78ll.
    \39\ 15 U.S.C. 77sss.
    \40\ 15 U.S.C. 80a-8, 80a-29, 80a-30, and 80a-37.
---------------------------------------------------------------------------

List of Subjects

17 CFR Part 230

    Investment companies, Reporting and recordkeeping requirements,
Securities.

17 CFR Part 232

    Incorporation by reference, Reporting and recordkeeping
requirements, Securities.

17 CFR Part 240

    Brokers, Fraud, Reporting and recordkeeping requirements,
Securities.

17 CFR Part 249

    Brokers, Reporting and recordkeeping requirements, Securities.

17 CFR Part 270

    Investment companies, Reporting and recordkeeping requirements,
Securities.

Text of the Amendments

    In accordance with the foregoing, title 17, chapter II of the Code
of Federal Regulations is amended as follows:

PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933

0
1. The authority citation for part 230 continues to read in part as
follows:

    Authority: 15 U.S.C. 77b, 77b note, 77c, 77d, 77f, 77g, 77h,
77j, 77r, 77s, 77z-3, 77sss, 78c, 78d, 78j, 78l, 78m, 78n, 78o, 78o-
7 note, 78t, 78w, 78ll(d), 78mm, 80a-8, 80a-24, 80a-28, 80a-29, 80a-
30, and 80a-37, and Pub. L. 112-106, sec. 201(a), sec. 401, 126
Stat. 313 (2012), unless otherwise noted.
* * * * *
    Sections 230.400 to 230.499 issued under secs. 6, 8, 10, 19, 48
Stat. 78, 79, 81, and 85, as amended (15 U.S.C. 77f, 77h, 77j, and
77s).
* * * * *

0
2. Amend Sec.  230.402 by revising paragraph (e) to read as follows:

Sec.  230.402   Number of copies; binding; signatures.

* * * * *
* * * * *
    (e) Signatures. Where the Act or the rules thereunder, including
paragraphs (a) and (c) of this section, require a document filed with
or furnished to the Commission to be signed, such document shall be
manually signed, or signed using either typed signatures or duplicated
or facsimile versions of manual signatures. Where typed, duplicated, or
facsimile signatures are used, each signatory to the filing shall
manually or electronically sign a signature page or other document
authenticating, acknowledging, or otherwise adopting his or her
signature that appears in the filing (``authentication document'').
Such authentication document shall be executed before or at the time
the filing is made and shall be retained by the registrant for a period
of five years. The requirements set forth in Sec.  232.302(b) must be
met with regards to the use of an electronically signed authentication
document pursuant to this paragraph (e). Upon request, the registrant
shall furnish to the Commission or its staff a copy of any or all
documents retained pursuant to this section.

0
3. Amend Sec.  230.471 by revising paragraph (b) to read as follows:

Sec.  230.471   Signatures to amendments.

* * * * *
    (b) Where the Act or the rules thereunder require a document filed
with or furnished to the Commission to be signed, such document shall
be manually signed, or signed using either typed signatures or
duplicated or facsimile versions of manual signatures. Where typed,
duplicated, or facsimile signatures are used, each signatory to the
filing shall manually or electronically sign a signature page or other
document authenticating, acknowledging, or otherwise adopting his or
her signature that appears in the filing (``authentication document'').
Such authentication document shall be executed before or at the time
the filing is made and shall be retained by the registrant for a period
of five years. The requirements set forth in Sec.  232.302(b) must be
met with regards to the use of an electronically signed authentication
document pursuant to this paragraph (b). Upon request, the registrant
shall furnish to the Commission or its staff a copy of any or all
documents retained pursuant to this section.

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

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

    Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3,
77sss(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll, 80a-6(c),
80a-8, 80a-29, 80a-30, 80a-37, 7201 et seq.; and 18 U.S.C. 1350,
unless otherwise noted.
    Section 232.302 is also issued under secs. 3(a) and 302, Pub. L.
No. 107-204, 116 Stat. 745.

0
5. Revise Sec.  232.301 to read as follows:

Sec.  232.301   EDGAR Filer Manual.

    Filers must prepare electronic filings in the manner prescribed by
the EDGAR Filer Manual, promulgated by the Commission, which sets forth
the technical formatting requirements for electronic submissions. The
requirements for becoming an EDGAR Filer and updating company data are
set forth in the updated EDGAR Filer Manual, Volume I: ``General
Information,'' Version 35 (January 2020). The requirements for filing
on EDGAR are set forth in the updated EDGAR Filer Manual, Volume II:
``EDGAR Filing,'' Version 55 (November 2020). All of these provisions
have been incorporated by reference into the Code of Federal
Regulations, which action was approved by the Director of the Federal
Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. You must
comply with these requirements in order for documents to be timely
received and accepted. The EDGAR Filer Manual is available at https://www.sec.gov/info/edgar/edmanuals.htm. The EDGAR Filer Manual is also
available for website viewing and printing in the Commission's Public
Reference Room, 100 F Street NE, Washington, DC 20549, on official
business days between the hours of 10 a.m. and 3 p.m. You can also
inspect the document at the National Archives and Records
Administration (NARA). For information on the availability of this
material at NARA, email<EMAIL_ADDRESS>or go to: https://

www.archives.gov/federal-register/cfr/ibrlocations.html.

0
6. Amend Sec.  232.302 by revising paragraphs (a) and (b) to read as
follows:

Sec.  232.302   Signatures.

    (a) Required signatures to, or within, any electronic submission
(including, without limitation, signatories within the certifications
required by Sec. Sec.  240.13a-14, 240.15d-14, and 270.30a-2 of this
chapter) must be in typed form rather than manual format. Signatures in
an HTML document that are not required may, but are not required to, be
presented in an HTML graphic or image file within the electronic
filing, in compliance with the formatting requirements of the EDGAR
Filer Manual. When used in connection with an electronic filing, the
term ``signature'' means a computer representation of any symbol or
series of symbols comprising a name executed, adopted, or authorized as
a signature. Signatures are not required in unofficial PDF copies
submitted in accordance with Sec.  232.104.
    (b)(1) Each signatory to an electronic filing (including, without
limitation, each signatory to the certifications required by Sec. Sec.
240.13a-14, 240.15d-14 and 270.30a-2 of this chapter) shall manually or
electronically sign a signature page or other document authenticating,
acknowledging, or otherwise adopting his or her signature that appears
in typed form within the electronic filing (``authentication
document''). Such authentication document shall be executed before or
at the time the electronic filing is made and shall be retained by the
filer for a period of five years. An electronically signed
authentication document pursuant to this paragraph (b)(1) must meet the
requirements set forth in the EDGAR Filer Manual.
    (2) Before a signatory may electronically sign an authentication
document pursuant to paragraph (b)(1) of this section, such signatory
must manually sign a document attesting that, when using electronic
signatures for purposes of paragraph (b)(1) of this section, the
signatory agrees that the use of such electronic signature constitutes
the legal equivalent of such individual's manual signature for purposes
of authenticating the signature to any filing for which it is provided.
An electronic filer must retain this document for as long as the
signatory may use an electronic signature to satisfy the requirements
of paragraph (b)(1) of this section and for a minimum period of seven
years after the date of the most recent electronically signed
authentication document.
    (3) Upon request, an electronic filer shall furnish to the
Commission or its staff a copy of any or all documents retained
pursuant to this section. A manually signed document under paragraph
(b)(1) or (2) of this section, including an initial electronic
signature authentication document or a manually signed authentication
document, may be retained and stored via electronic means.
* * * * *

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF
1934

0
7. The authority citation for part 240 continues to read, in part, as
follows:

    Authority:  15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3,
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f,
78g, 78i, 78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78n-1, 78o, 78o-4,
78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78dd, 78ll, 78mm,
80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, and 7201 et
seq., and 8302; 7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C.
1350; Pub. L. 111-203, 939A, 124 Stat. 1376 (2010); and Pub. L. 112-
106, secs. 503 and 602, 126 Stat. 326 (2012), unless otherwise
noted.
* * * * *
    Sections 240.12b-1 to 240.12b-36 also issued under secs. 3, 12,
13, 15, 48 Stat. 892, as amended, 894, 895, as amended; 15 U.S.C.
78c, 78l, 78m, and 78o.
* * * * *
    Section 240.14d-1 is also issued under 15 U.S.C. 77g, 77j,
77s(a), 77ttt(a), 80a-37.
* * * * *

0
8. Amend Sec.  240.12b-11 by revising paragraph (d) to read as follows:

Sec.  240.12b-11   Number of copies; signatures; binding.

* * * * *
    (d) Signatures. Where the Act or the rules, forms, reports or
schedules thereunder, including paragraph (b) of this section, require
a document filed with or furnished to the Commission to be signed, such
document shall be manually signed, or signed using either typed
signatures or duplicated or facsimile versions of manual signatures.
Where typed, duplicated, or facsimile signatures are used, each
signatory to the filing shall manually or electronically sign a
signature page or other document authenticating, acknowledging, or
otherwise adopting his or her signature that appears in the filing
(``authentication document''). Such authentication document shall be
executed before or at the time the filing is made and shall be retained
by the filer for a period of five years. The requirements set forth in
Sec.  232.302(b) must be met with regards to the use of an
electronically signed authentication document pursuant to this
paragraph (d). Upon request, the filer shall furnish to the Commission
or its staff a copy of any or all documents retained pursuant to this
section.

0
9. Amend Sec.  240.14d-1 by revising paragraph (h) to read as follows:

Sec.  240.14d-1  Scope of and definitions applicable to Regulations 14D
and 14E.

* * * * *
    (h) Signatures. Where the Act or the rules, forms, reports or
schedules thereunder require a document filed with or furnished to the
Commission to be signed, such document shall be manually signed, or
signed using either typed signatures or duplicated or facsimile
versions of manual signatures. Where typed, duplicated, or facsimile
signatures are used, each signatory to the filing shall manually or
electronically sign a signature page or other document authenticating,
acknowledging, or otherwise adopting his or her signature that appears
in the filing (``authentication document''). Such authentication
document shall be executed before or at the time the filing is made and
shall be retained by the filer for a period of five years. The
requirements set forth in Sec.  232.302(b) must be met with regards to
the use of an electronically signed authentication document pursuant to
this paragraph (h). Upon request, the filer shall furnish to the
Commission or its staff a copy of any or all documents retained
pursuant to this section.

0
10. Amend Sec.  240.15Fb1-1 by revising paragraphs (b) and (d) to read
as follows:

Sec.  240.15Fb1-1   Signatures.

* * * * *
    (b) Each signatory to an electronic filing (including, without
limitation, each signatory to the forms and certifications required by
Sec. Sec.  240.15Fb2-1, 240.15Fb2-4, and 240.15Fb6-2) shall manually or
electronically sign a signature page or other document authenticating,
acknowledging, or otherwise adopting his or her signature that appears
in typed form within the electronic filing (``authentication
document''). Such authentication document shall be executed before or
at the time the electronic filing is made. The requirements set forth
in Sec.  232.302(b) must be met with regards to the use of an
electronically signed authentication document pursuant to this
paragraph (b). Upon request, the security-based swap dealer or major
security-based swap participant shall furnish to the Commission or its
staff a

copy of any or all documents retained pursuant to this paragraph (b).
* * * * *
    (d) Each manually or electronically signed signature page or other
document authenticating, acknowledging, or otherwise adopting his or
her signature that appears in typed form within the electronic filing
(``authentication document'')--
    (1) On Schedule F to Form SBSE (Sec.  249.1600 of this chapter),
SBSE-A (Sec.  249.1600a of this chapter), or SBSE-BD (Sec.  249.1600b
of this chapter), as appropriate, shall be retained by the filer until
at least three years after the form or certification has been replaced
or is no longer effective;
    (2) On Form SBSE-C (Sec.  249.1600c of this chapter) shall be
retained by the filer until at least three years after the Form was
filed with the Commission.

0
11. Amend Sec.  240.16a-3 by revising paragraph (i) to read as follows:

Sec.  240.16a-3   Reporting transactions and holdings.

* * * * *
    (i) Signatures. Where Section 16 of the Act, or the rules or forms
thereunder, require a document filed with or furnished to the
Commission to be signed, such document shall be manually signed, or
signed using either typed signatures or duplicated or facsimile
versions of manual signatures. Where typed, duplicated, or facsimile
signatures are used, each signatory to the filing shall manually or
electronically sign a signature page or other document authenticating,
acknowledging, or otherwise adopting his or her signature that appears
in the filing (``authentication document''). Such authentication
document shall be executed before or at the time the filing is made and
shall be retained by the filer for a period of five years. The
requirements set forth in Sec.  232.302(b) must be met with regards to
the use of an electronically signed authentication document pursuant to
this paragraph (i). Upon request, the filer shall furnish to the
Commission or its staff a copy of any or all documents retained
pursuant to this section.
* * * * *

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

0
12. The general authority citation for part 249 continues to read as
follows:

    Authority:  15 U.S.C. 78a et seq. and 7201 et seq.; 12 U.S.C.
5461 et seq.; 18 U.S.C. 1350; Sec. 953(b), Pub. L. 111-203, 124
Stat. 1904; Sec. 102(a)(3), Pub. L. 112-106, 126 Stat. 309 (2012);
Sec. 107, Pub. L. 112-106, 126 Stat. 313 (2012), and Sec. 72001,
Pub. L. 114-94, 129 Stat. 1312 (2015), unless otherwise noted.
* * * * *

0
13. Amend Form CB (referenced in Sec.  249.480) by amending General
Instruction II.B to read as follows:

    Note:  The text of Form CB does not, and this amendment will
not, appear in the Code of Federal Regulations.

United States

Securities and Exchange Commission

Washington, DC 20549

Form CB

* * * * *
    B. When submitting the Form CB in electronic format, the persons
specified in Part IV must provide signatures in accordance with
Regulation S-T Rule 302 (17 CFR 232.302). When submitting the Form CB
in paper, the persons specified in Part IV must sign the original and
at least one copy of the Form and any amendments. You must conform any
unsigned copies. The specified persons may provide typed or facsimile
signatures in accordance with Securities Act Rule 402(e) (17 CFR
230.402(e)) or Exchange Act Rule 12b-11(d) (17 CFR 240.12b-11(d)) as
long as the filer retains copies of signatures manually or
electronically signed by each of the specified persons for five years.
The requirements set forth in Regulation S-T Rule 302(b) (17 CFR
232.302(b)) must be met with regards to the use of an electronically
signed signature page.
* * * * *

PART 270--RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 1940

0
14. The authority citation for part 270 continues to read, in part, as
follows:

    Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, 80a-39,
and Pub. L. 111-203, sec. 939A, 124 Stat. 1376 (2010), unless
otherwise noted.
* * * * *
    Section 270.8b-11 is also issued under 15 U.S.C. 77s, 80a-8, and
80a-37.
* * * * *

0
15. Amend Sec.  270.8b-11 by revising paragraph (e) to read as follows:

Sec.  270.8b-11  Number of copies; signatures; binding.

* * * * *
    (e) Signatures. Where the Act or the rules thereunder, including
paragraph (c) of this section, require a document filed with or
furnished to the Commission to be signed, the document should be
manually signed, or signed using either typed signatures or duplicated
or facsimile versions of manual signatures. When typed, duplicated, or
facsimile signatures are used, each signatory to the filing shall
manually or electronically sign a signature page or other document
authenticating, acknowledging, or otherwise adopting his or her
signature that appears in the filing (``authentication document'').
Execute each such authentication document before or at the time the
filing is made and retain for a period of five years. The requirements
set forth in Sec.  232.302(b) must be met with regards to the use of an
electronically signed authentication document pursuant to this
paragraph (e). Upon request, the registrant shall furnish to the
Commission or its staff a copy of any or all documents retained
pursuant to this section.

    By the Commission.

    Dated: November 17, 2020.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2020-26166 Filed 12-3-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 78, Number 211 (Thursday, October 31, 2013)]
[Notices]
[Pages 65326-65329]
[FR Doc No: 2013-25963]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2013-N-1151]

Agency Information Collection Activities; Proposed Collection;
Comment Request; Experimental Study of Direct-to-Consumer Promotion
Directed at Adolescents

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Food and Drug Administration (FDA) is announcing an
opportunity for public comment on the proposed collection of certain
information by the Agency. Under the Paperwork Reduction Act of 1995
(the PRA), Federal Agencies are required to publish notice in the
Federal Register concerning each proposed collection of information and
to allow 60 days for public comment in response to the notice. This
notice solicits comments on research entitled, ``Experimental Study of
Direct-to-Consumer (DTC) Promotion Directed at Adolescents.'' This
study is designed to examine how adolescents interpret DTC advertising
directed at them.

DATES: Submit written or electronic comments on the collection of
information by December 30, 2013.

ADDRESSES: Submit electronic comments on the collection of information
to http://www.regulations.gov. Submit written comments on the
collection of information to the Division of Dockets Management (HFA-
305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061,
Rockville, MD 20852. All comments should be identified with the docket
number found in brackets in the heading of this document.

FOR FURTHER INFORMATION CONTACT: FDA PRA Staff, Office of Information
Management, Food and Drug Administration, 1350 Piccard Dr., PI50-400B,
Rockville, MD 20850<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Under the PRA (44 U.S.C. 3501-3520), Federal
Agencies must obtain approval from the Office of Management and Budget
(OMB) for each collection of information they conduct or sponsor.
``Collection of information'' is defined in 44 U.S.C. 3502(3) and 5 CFR
1320.3(c) and includes Agency requests or requirements that members of
the public submit reports, keep records, or provide information to a
third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A))
requires Federal Agencies to provide a 60-day notice in the Federal
Register concerning each proposed collection of information before
submitting the collection to OMB for approval. To comply with this
requirement, FDA is publishing notice of the proposed collection of
information set forth in this document.
    With respect to the following collection of information, FDA
invites comments on these topics: (1) Whether the proposed collection
of information is necessary for the proper performance of FDA's
functions, including whether the information will have practical
utility; (2) the accuracy of FDA's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility, and clarity of the information to be collected; and (4) ways
to minimize the burden of the collection of information on respondents,
including through the use of automated collection techniques, when
appropriate, and other forms of information technology.

Experimental Study of Direct-to-Consumer (DTC) Promotion Directed at
Adolescents--(0910--NEW)

Regulatory Background

    Section 1701(a)(4) of the Public Health Service Act (42 U.S.C.
300u(a)(4)) authorizes FDA to conduct research relating to health
information. Section 1003(d)(2)(C) of the Federal Food, Drug, and
Cosmetic Act (the FD&C Act) (21 U.S.C. 393(d)(2)(C)) authorizes FDA to
conduct research relating to drugs and other FDA regulated products in
carrying out the provisions of the FD&C Act.

Adolescents and DTC

    Sponsors for several prescription drug classes market their
products directly to vulnerable groups, including adolescents. Such DTC
marketing to adolescents raises a variety of potential concerns.
Adolescents are a unique audience for DTC drug marketing because their
cognitive abilities are different than those of adults, and they are
usually dependent on adults for health insurance coverage, health care
provider access, and prescription drug payment. Despite this
uniqueness, research regarding how adolescents use risk and benefit
information for health-related decisions is limited. If considered at
all in healthcare communication research, age is typically treated as
simply another segment of the audience (Ref. 1), and researchers fail
to consider how information processing (how people understand
information) in response to ad exposure might differ among adolescents
versus older viewers.
    The FD&C Act requires manufacturers, packers, and distributors that
advertise prescription drugs to disclose certain information about a
product's uses and risks to potential consumers in all advertisements.
Consumers must consider tradeoffs with regard to the product's risks
and benefits in deciding whether to ask their health care professionals
about the product. Presenting technically factual information is
important, but other factors can also affect potential consumers.
Information processing capacity, the relevance and vividness of the
information, and contextual factors such as family dynamics likely
affect how adolescent consumers weigh the potential risks and benefits
of using a product.
    Despite the lack of previous research specific to DTC drug
marketing to adolescents, existing theoretical and empirical data make
a strong case for treating adolescence as a unique life stage during
which vulnerabilities that can affect informed decision-making must be
taken into account. Well-known theories of adolescent development have
long pointed to developmental changes that occur during the
transitional period as an individual moves from childhood to young
adulthood (Ref. 2). For instance, Erikson (Refs. 3, 4) describes an
often turbulent psychosocial crisis that occurs as adolescents strive
to develop their unique identify. Piaget (Refs. 5, 6) and Kohlberg
(Ref. 7) describe changes in stages relative to cognitive processing
and reasoning that occur in this period, as the adolescent becomes
increasingly capable of more abstract thinking. Different cognitive,
social and emotional, and developmental processes in the adolescent
brain mature simultaneously and at different rates, affecting decision-
making by age. All of these factors can influence how adolescents
perceive and process information as well as weigh risks and benefits.
    The need for understanding how adolescents weigh risks and benefits
is particularly critical given the potential

adverse events associated with use of the drug classes that are
marketed directly to adolescents. Suicide and suicidal ideation has
been associated with some of these classes, including a commonly used
class of acne medications. The risk and benefit information needs to be
clearly presented in ways that adolescents can understand.
Interpretation of more subtle messages in the advertisements, along
with the lens through which adolescents view the message, must be
understood. For example, given the potential stigma of acne and
adolescents' heightened concerns about peer perceptions, marketing that
emphasizes these two features in subtle ways might minimize the
attention given to any risk information provided. This suggests the
need to systematically explore the role of various factors that would
be expected to influence adolescent decision-making, such as peer and
family perceptions of stigma.

Research Purpose

    We plan to conduct a randomized, controlled study in two different
medical conditions that assesses adolescents' perceptions following
exposure to different types of DTC prescription drug advertising. We
plan to compare adolescents' perceptions to those of young adult
counterparts. Each participant will view a web-based promotional
campaign for either a fictitious Attention Deficit Hyperactivity
Disorder (ADHD) medication or a fictitious acne medication. Because
adolescents typically depend on their parents for prescription drug
purchases, we also will include a sample of parents matched to their
adolescent children to explore similarities and differences in
perceptions for these matched pairs.
    Within the two medical conditions, we propose to explore the role
of three different factors that may influence adolescent understanding
and perceptions of DTC. Two of these factors include timing issues: the
timing of the onset of benefits and the timing of the onset of risks.
Adolescents may be particularly likely to give more credence to
benefits that occur immediately and may be likely to discount risks
that do not occur immediately. Research suggests that the frontal lobe,
which controls self-regulatory functions, is not fully developed until
the mid-20s (Ref. 8), which may lead to difficulty in impulse control
and planning, and thus decision-making. Other research suggests that
adolescents are more likely to engage in risky behavior, although
whether they do this because they discount their own likelihood of
experiencing risks or if they cannot help themselves despite having
adequate perceptions of their own vulnerability has not been determined
(Refs. 9, 10). Given the variety of prescription drug products on the
market with varying benefit and risk profiles, these factors (benefit
and risk timing) will enable us to investigate its role in adolescent
processing of DTC ads.
    We also propose to determine whether the severity of the risk
within each condition influences adolescent decision-making in relation
to DTC. Risk perceptions and risk taking have been active topics of
exploration with regard to adolescents and thus the severity of the
risks may play a role in determining whether and how adolescents attend
to the benefit-risk profile of the prescription drugs they see
advertised. This factor will also help us generalize further to
different types of products, although we recognize that it will not
cover the gamut of prescription drug products.
    Although the variables we are examining are all attributes of the
drug products themselves and do not reflect particular behaviors of
sponsors, this information will be crucial in determining what types of
prescription drugs may require additional care when advertising them to
adolescents. One strength of the proposed study is that with two
different medical conditions and multiple different variations in the
benefit and risk profiles of the drugs, we will obtain a good
representation of adolescent response to DTC ads. Moreover, in
comparing adolescents with adults, we will have a better idea of how
perceptions and understanding of benefits and risks in DTC ads differ
across this part of the lifespan.

Design Overview

    Within each of the two medical conditions, we will randomly assign
participants to one of a number of experimental conditions. We propose
for each medical condition a 2 (risk onset: immediate, delayed) x 2
(benefit onset: immediate, delayed) x 2 (risk severity: high, low)
factorial design, based on the rationale in the prior section.
    We will use the same risk (within medical conditions) to control
for differences in severity (e.g. dry skin vs. cancer) and avoid
confounds.

                                                                Table 1--Experimental Conditions With Three Independent Variables
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Variable 1: Timing of risk: Immediate                                              Variable 1: Timing of risk: Delayed
                              ------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Variable 2: Severity of  risk (low)      Variable 2: Severity of  risk (high)     Variable 2: Severity of  risk (low)    Variable 2: Severity of  risk (high)
       Comparison group       ------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                Variable 3: Timing   Variable 3: Timing   Variable 3: Timing  Variable 3: Timing  Variable 3: Timing  Variable 3: Timing  Variable 3: Timing  Variable 3: Timing
                                    of benefit           of benefit           of benefit          of benefit          of benefit          of benefit          of benefit          of benefit
                                   (immediate)           (delayed)           (immediate)           (delayed)          (immediate)          (delayed)          (immediate)          (delayed)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Study 1 (Medical condition A, Acne)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Younger adolescents..........  Group 1............  Group 2............  Group 3............  Group 4...........  Group 5...........  Group 6...........  Group 7...........  Group 8.
 (13-15).....................
Older adolescents............  Group 9............  Group 10...........  Group 11...........  Group 12..........  Group 13..........  Group 14..........  Group 15..........  Group 16.
 (16-19).....................
Young adults.................  Group 17...........  Group 18...........  Group 19...........  Group 20..........  Group 21..........  Group 22..........  Group 23..........  Group 24.
 (25-30).....................
Parents......................  Group 25...........  Group 26...........  Group 27...........  Group 28..........  Group 29..........  Group 30..........  Group 31..........  Group 32.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Study 2 (Medical condition B, ADHD)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Younger adolescents..........  Group 1............  Group 2............  Group 3............  Group 4...........  Group 5...........  Group 6...........  Group 7...........  Group 8.
 (13-15).....................
Older adolescents............  Group 9............  Group 10...........  Group 11...........  Group 12..........  Group 13..........  Group 14..........  Group 15..........  Group 16.
 (16-19).....................

Young adults.................  Group 17...........  Group 18...........  Group 19...........  Group 20..........  Group 21..........  Group 22..........  Group 23..........  Group 24.
 (25-30).....................
Parents......................  Group 25...........  Group 26...........  Group 27...........  Group 28..........  Group 29..........  Group 30..........  Group 31..........  Group 32.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    We will conduct the studies with two medical conditions that have
particular relevance for adolescents--acne and ADHD. For acne, we will
target a sample that has been diagnosed with, or, through self-report,
has experienced the condition. For ADHD, we will target a sample that
has been diagnosed with the condition. If an appropriate sample size
cannot be obtained for ADHD, we will extend the sample by including
adolescents with family members who have been diagnosed with ADHD to
help ensure participants are interested in and paying attention to the
topic.
    The study will enroll three specific age groups (13-15, 16-19, and
25-30). We propose to explore differences in effects of the ad
manipulations across these three age groups on a variety of outcomes,
including benefit and risk recall, benefit and risk perceptions, and
behavioral intentions. Certain ads may communicate more or less
effectively with specific age groups. The presentation of immediate
versus delayed risks, for example, might differentially affect teens
and young adults. Additionally, we propose to examine factors unique to
adolescent healthcare including relationship between parent and child,
issues of stigma, and risk taking.
    We will also recruit parents of the two younger age groups into the
sample to explore potential differences between teen and parental
perceptions. There are three reasons for including parents in the
sample:
    1. Adolescents and adults bring varied experiences and
developmental capacities to everyday decisions. As a result, they may
differ both in their perceptions of risks and benefits and in their
evaluations of DTC. Matching parents and adolescents in the sample will
allow us to conduct additional analyses to explore similarities and
differences between parental and adolescent perceptions. By having
parents of two age groups, we can compare these groups to see if there
are differences in parent-child risk-perception concordance/discordance
across adolescence as a function of age.
    2. Parents will serve as a fourth age group, which will allow us to
conduct additional comparisons between the age categories. Increasing
the number of age categories will allow us to look for differences
between a greater range of age groups, and to see if clear patterns of
age differences exist (e.g., it could be that the most significant
differences are observed when comparing young adolescents and those
over 30 years of age).
    3. Including parent-child dyads will address the need for empirical
data comparing adolescents' and their parents' evaluations of DTC
prescription drug advertising.
    Select experimental conditions will be pretested with 1061
participants to assess questionnaire wording and implementation. Based
on power analyses, the main study will include 5,120 completed
participants, which will allow us enough power to test several possible
covariates (factors other than our manipulated variables) that may have
effects, such as demographic information.
    The protocol will take place via the Internet. Participants will be
randomly assigned to view one Web site ad for a fictitious prescription
drug that treats either acne or ADHD and will answer questions about
it. The entire process is expected to take no longer than 30 minutes.
This will be a one-time (rather than annual) collection of information.
    FDA estimates the burden of this collection of information as
follows:

                                 Table 2--Estimated Annual Reporting Burden \1\
----------------------------------------------------------------------------------------------------------------
                                                   Number of
           Activity                Number of     responses per   Total annual    Average burden     Total hours
                                  respondents     respondent       responses      per response
----------------------------------------------------------------------------------------------------------------
Pretest 1 screener (\1/2\                2,812               1           2,812  .08 (5 min.)....             225
 acne, \1/2\ ADHD).
Pretest 2 screener (all one              6,400               1           6,400  .08 (5 min.)....             512
 illness).
Main study screener (acne)....           6,400               1           6,400  .08 (5 min.)....             512
Main study screener (ADHD)....          25,600               1          25,600  .08 (5 min.)....           2,048
Pretest 1.....................             450               1             450  0.5 (30 min.)...             225
Pretest 2.....................             700               1             700  0.5 (30 min.)...             350
Main study, 13-15 year olds              1,300               1           1,300  0.5 (30 min.)...             650
 (both acne and ADHD).
Main study, 16-19-year olds              1,300               1           1,300  0.5 (30 min.)...             650
 (both acne and ADHD).
Main study, young adults (both           1,300               1           1,300  .5 (30 min.)....             650
 acne and ADHD).
Main study, parents (both acne           1,300               1           1,300  .5 (30 min.)....             650
 and ADHD).
                               ------------------------------------------------                  ---------------
    Total pretest/study                  6,350  ..............  ..............  ................  ..............
     participants.
                               ---------------------------------------------------------------------------------

        Total.................  ..............  ..............  ..............  ................           6,472
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

    The total respondent sample for this data collection is 6,350,
including the two pretests. We estimate the response burden to be 30
minutes, for a total collection burden, including screeners, of 6,472
hours.

References

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Health Campaign Evaluation.'' Health Communication, 25 (6-7), 525-
528, 2010.
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Adolescent Development.'' In R. M. Lerner and L. Steinberg (Eds.),
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of Adolescent Development). Hoboken, NJ: John Wiley and Sons, 2009.
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1974.
5. Piaget, J. The Origins of Intelligence in Children. New York:
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9. Goldberg, J. H., B. L. Halpern-Felsher, and S. G. Millstein,
``Beyond Invulnerability: The Importance of Benefits in Adolescents'
Decision to Drink Alcohol.'' Health Psychology, 21(5), 477-484. doi:
10.1037/0278-6<IP_ADDRESS>7, 2002.
10. Albert, D. and L. Steinberg, ``Judgment and Decision Making in
Adolescence.'' Journal of Research on Adolescence, 21(1), 211-224.
doi: 10.1111/j.1532-7795.2010.00724.x, 2011.

    Dated: October 25, 2013.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2013-25963 Filed 10-30-13; 8:45 am]
BILLING CODE 4160-01-P