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Federal Register / Vol. 86, No. 190 / Tuesday, October 5, 2021 / Rules and Regulations
invitation to dispense with the lessprescriptive guardrails set forth in the Act. To the extent the Act requires the Authority to consider any factors or standards not specifically referenced in this section, the Authority must explain whether and how it considered those factors when proposing a rule or modification. For instance, when proposing a civil sanctions rule or modification pursuant to Section 8d1
of the Act, 15 U.S.C. 3057d1, the Authority must explain how the rule or modification meets the requirements of Section 8d2 of the Act, 15 U.S.C.
3057d2.
B. Supporting Documentation The Commission is requiring the Authority to submit any pertinent factual information it relied on in developing its proposed rule or modification. More specifically, the Authoritys submission to the Commission must include a copy of existing standards used as a reference for the development of a proposed rule or modification and any scientific data, studies, or analysis underlying the development of the proposed rule or modification. The Commission anticipates receiving, for instance, a copy of the lists of permitted and prohibited substances in effect for the International Federation of Horseracing Authorities, including the International Federation of Horseracing Authorities International Screening Limits for urine, dated May 2019, and any other rules and standards referenced in Section 6g2A of the Act, 15 U.S.C.
3055g2A when the Authoritys baseline rules for anti-doping are submitted. For organizational purposes, supporting documentation must be attached as exhibits, and each exhibit must clearly identify the proposed rule or modification it supports.

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C. Redline Document for Proposed Rule Modification To enable the Commission to quickly and easily identify the substance of a proposed rule modification, the Commission is requiring the Authority to provide a redline document of the existing rule, marked with the proposed changes.
D. Timing of Submission Section 4c1 of the Act, 15 U.S.C.
3053c1 provides for a 60-day timeframe between the Commissions publication of the Authoritys proposed rule or modification in the Federal Register for public comment and the date the Commission must approve or disapprove the Authoritys proposed rule or modification. To ensure it has
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sufficient time for review, the Commission is requiring the Authority to provide the information it needs to evaluate the Authoritys proposed rule or modification at least 90 days in advance of the date the Authority proposes having its proposed rule or modification published in the Federal Register for public comment. This will give the Commission additional time to evaluate the Authoritys proposed rule or modification. It should be noted this 90-day timeframe serves as a minimum, not a maximum, timeframe. The Secretary may shorten the timeframe if the Authority demonstrates that a shorter timeframe is necessary to meet statutory deadlines.
E. Conclusory Statements and Failure To Provide Requisite Analysis The Authority must provide an adequate basis for the Commissions review of its rules. The Commission seeks to understand the Authoritys analysis of the information it relied on to determine whether a proposed rule or modification was warranted and if so, what provisions the rule should contain.
To this end, the information required under this section must be sufficiently detailed and contain sufficient analysis to support a Commission finding that a proposed rule or modification satisfies the statutory requirements. A mere assertion or conclusory statement that a proposed rule or modification is consistent with the requirements of the Act, for instance, is insufficient. If the Authority fails to describe and justify the proposed rule or modification in the manner described in this section, or fails to submit the information required by this section, the Commission may not have sufficient information to make an affirmative finding that the proposed rule or modification is consistent with the Act and the applicable rules approved by the Commission.
F. Public Comments Section 4d2 of the Act, 15 U.S.C.
3053d2, provides the Commission shall publish in the Federal Register any proposed rule, standard, or procedure and provide an opportunity for public comment. However, the Act gives the Commission only a total of 60
days after publication to approve or disapprove a proposed rule or modification once it has been published in the Federal Register. Given that the Commission and the Authority will need time to review comments, the Act functionally provides for a much more limited comment period of approximately 30 days or less. To ensure the public has an adequate opportunity to review and understand
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the Authoritys rules, ask questions, and provide comments, the Commission is encouraging the Authority to make its proposed rules publicly available and solicit public comments in advance of providing any submissions to the Commission. To avoid delays in Commission approval of its rules, the Authority should not wait until its proposed rule is published in the Federal Register to solicit its own public comments.
In a March 21, 2021 letter 2 to the Acting Chairwoman, Rebecca Kelly Slaughter, the Acts sponsors stated the relationship between the Commission and the Authority is closely modeled on the enduring and effective relationship between the Securities and Exchange Commission SEC and Financial Industry Regulatory Authority FINRA, a private selfregulatory organization. As part of its own rulemaking process, the FINRA
Board of Governors may authorize the publication of its own Regulatory Notice soliciting comments on a rule proposal prior to its submission to the SEC.3 If FINRA decides to issue a Regulatory Notice soliciting public comment on a proposal, the comment period typically is open for one to two months.4 All comments become part of FINRAs official record of the rule proposal, and since December 1, 2003, FINRA has posted all comment letters on its website.5 Depending on the comments received in response to the Regulatory Notice and any changes made to the proposal, FINRA staff will either return to the FINRA Board with a revised proposal or will file the rule proposal with the SEC for notice and comment.6
Soliciting comments, as FINRA does, in advance of submitting any proposed rules or modifications to the Commission would benefit both the Authority, the regulated community, and the Commission. It would provide transparency and enable the Authority to resolve any issues with its rules prior to their submission to the Commission.
If public comments are solicited, the Commission is requiring the Authority to attach, as an exhibit to its submission under 1.142, a copy of the comments.
The Commission encourages the Authority to make such comments publicly available on its own website. In 2 See Letter from Senator Mitch McConnell to Acting Chairwoman Rebecca Kelly Slaughter Mar.
23, 2021 on file with the Federal Trade Commission.
3 See FINRA Rulemaking process, https
www.finra.org/rules-guidance/rulemaking-process last visited July 9, 2021.
4 Id.
5 Id.
6 Id.

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