Prospectus Delivery; Securities Transactions Settlement

SUMMARY: The Commission is adopting revisions to its rules and forms

and a new rule in order to implement two solutions to prospectus

delivery issues arising in connection with the change to T+3 securities

transaction settlement. These revisions, among other things, include

changes that highlight the location of the risk factor disclosure

within the prospectus. In addition, the Commission is eliminating an

exemption from T+3 settlement for purchases and sales of securities

pursuant to a firm commitment offering, providing a T+4 time frame to

firm commitment offerings under certain conditions, and adopting a

modified procedure whereby participants in firm commitment offerings

may agree to an extended settlement time frame.

EFFECTIVE DATE: The new rule and the revisions to rules and forms are

effective June 7, 1995.

FOR FURTHER INFORMATION CONTACT:

Anita Klein, Joseph Babits or Michael Mitchell (202) 942-2900, Division

of Corporation Finance; and, with regard to questions concerning

revisions to the T+3 settlement rule, Jerry W. Carpenter or Christine

Sibille, (202) 942-4187, Division of Market Regulation; and, with

regard to questions concerning Rule 15c2-8 revisions, Alexander Dill,

(202) 942-4892, Division of Market Regulation; and, with regard to

questions concerning the application to investment companies, Kathleen

Clarke, (202) 942-0721, Division of Investment Mangement, U.S.

Securities and Exchange Commission, Washington, DC. 20549.

SUPPLEMENTARY INFORMATION:

I. Introduction and Background

On October 6, 1993, the Commission adopted Rule 15c6-1\1\ under the

Securities Exchange Act of 1934 (the ``Exchange Act'').\2\ That rule is

scheduled to become effective on June 7, 1995.\3\ Rule 15c6-1 requires

that the standard settlement time frame for most broker-dealer trades

be three business days after the trade (hereinafter ``T + 3''). Rule

15c6-1 provides a limited exemption from T + 3 for the sale or

securities for cash pursuant to a firm commitment offering registered

under the Securities Act of 1933 (the ``Securities Act'').\4\ Resales

of such securities, however, remain within T + 3.

\1\17 CFR 240.15c6-1. See Exchange Act Release No. 33023 (Oct.

6, 1993) (58 FR 52891).

\2\15 U.S.C. 78a et seq.

\3\See Exchange Act Release No. 34952 (Nov. 9, 1994) (59 FR

59137).

\4\15 U.S.C. 77a et seq.

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Since the adoption of Rule 15c6-1, members of the brokerage

community have suggested that the Commission eliminate this exemption

because, among other reasons, the bifurcated settlement cycle created

for initial sales and resales of new issues\5\ would be disruptive to

broker-dealer operations and to the clearance and settlement system.

\5\The term ``new issues'' as used herein refers to both initial

public offerings and offerings of additional securities by

companies.

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According to the brokerage community, the primary reason that

settlement within T + 3 is not feasible for many new issues is the

amount of time it takes to print and deliver prospectuses.\6\

\6\Some of these timing difficulties can be expected to be

alleviated as markets increasingly rely on non-paper delivery media.

In recognition of that development, the staff issued an interpretive

letter to facilitate the use of electronic transmission to satisfy

prospectus delivery requirements. Brown & Wood (Feb. 17, 1995). The

Division of Corporation Finance staff, in addition to issuing the

Brown & Wood letter, is considering generally delivery under the

Securities Act of prospectuses through other non-paper media (e.g.,

audiotapes, videotapes, facsimile, directed electronic mail, and CD

ROMs). The staff anticipates submitting to the Commission in the

near future recommendations intended both to facilitate compliance

with the Securities Act's prospectus delivery requirements and to

encourage continued technological developments of non-paper delivery

media.

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Two proposals to ease prospectus delivery within T + 3 were

submitted for Commission consideration. One was submitted by the

Securities Industry Association (``SIA'') and one was submitted by a

group of four investment firms: CS First Boston Corporation, Goldman,

Sachs & Co., Lehman Brothers Inc. and Morgan Stanley & Co. Incorporated

(the ``Four Firms'').\7\ These proposals recommended markedly different

solutions to accomplishing prospectus delivery within T + 3.

\7\See letter from Robin Shelby, CS First Boston Corporation;

Goldman, Sachs & Co.; Steven Barkenfield, Lehman Brothers Inc.; and

John Ander, Morgan Stanley & Co. Inc. to Anita Klein, Securities and

Exchange Commission, dated Jan. 24, 1995 and letter from Goldman,

Sachs to Anita Klein, Securities and Exchange Commission, dated Feb.

3, 1995. See also letter from Joseph McLaughlin , Brown & Wood, on

behalf of the Securities Industry Association, to Anita Klein,

Securities and Exchange Commission, dated Feb. 1, 1995. Copies of

these proposals are available for inspection and duplication at the

Commission's Public Reference Room, 450 Fifth St. NW., Washington,

DC 20549, File Number S7-7-95.

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On February 21, 1995, the Commission proposed new Rule 434 and

amendments to existing rules and forms based upon these two

proposals.\8\ The Commission sought comment regarding which approach

should be implemented, or whether the Commission should implement both

approaches and thereby allow market participants a choice as to which

to use in any given offering. Twenty-nine comment letters were received

in response to the Proposing Release.\9\ Most commenters addressing the

question of whether to adopt one or both approaches favored the

adoption of both of the Commission's approaches.

\8\See Securities Act Release No. 7141 (Feb. 21, 1995) (60 FR

10724) (hereinafter, the ``Proposing Release'').

\9\These letters of comment and a summary thereof are available

for inspection and duplication at the Commission's Public Reference

Room, 450 Fifth Street NW., Washington, DC 20549, File No. S7-7-95.

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As described in greater detail below, the Commission is adopting

both approaches, largely as proposed, to provide market participants

with the flexibility of selecting between alternative methods to

expedite prospectus delivery under a T + 3 clearance and settlement

system.\10\ Because of the concerns expressed by some commenters with

respect to the potential for investor confusion, however, the

Commission intends to monitor closely disclosure practices that develop

under the new rules and will undertake revisions to the rules if

necessary to address investor problems.

\10\As adopted, the approaches will apply specifically to

certain investment companies registered under the Investment Company

Act of 1940 (15 U.S.C. 80a-1 et seq.) (hereinafter, the ``Investment

Company Act'') (i.e., closed-end investment companies and unit

investment trusts (``UITs'')). See infra Sections II.A.8. and

II.B.3.d.

On February 21, 1995, the Commission also proposed amendments to

Rule 15c6-1 to eliminate the current exemption for firm commitment

offerings except offerings of asset-backed securities and structured

securities, to provide for a T+4 standard settlement period for

offerings priced after the close of the markets (``after-market

pricings''), and to permit the managing underwriter to establish T+3,

T+4, or T+5 as the standard settlement period for an entire offering if

certain conditions were met. In general, commenters favored the

proposed amendments to Rule 15c6-1. Many [[Page 26605]] commenters,

however, objected to the requirements and limitations contained in the

T+3, T+4, or T+5 proposal. As described below, the Commission is

eliminating the blanket exemption from Rule 15c6-1 for firm commitment

offerings, is adopting the T+4 standard for after-market pricings, and

is adopting a revised provision authorizing exceptions from T+3

settlement for certain firm commitment offerings.\11\

\11\With the help of staff of the Commission's Division of

Corporation Finance and Office of General Counsel, the Commission's

Advisory Committee on the Capital Formation and Regulatory Processes

is examining the relative costs and benefits of the Securities Act's

transactional registration scheme, including the prospectus delivery

requirements. See Commission File No. 265-20.

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II. Prospectus Delivery Approaches

A. The Four Firms Approach

The Four Firms proposal was premised on the view that the process

of preparing and delivering prospectuses in new issues could be

accelerated sufficiently to comply with T+3 if six steps were taken by

the Commission to facilitate the printing of a significant portion of

the final prospectus prior to pricing. Those six steps, noted below,

are being adopted substantially as proposed.\12\ Except as otherwise

noted, these steps are applicable to any offering.

\12\For a discussion of the application of the Four Firms

approach to investment companies, see infra Section II.A.8.

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1. Re-ordering of Prospectuses

As was proposed, the Commission is adopting rule revisions enabling

the contents of prospectuses to be re-ordered to expedite the printing

process.\13\ All portions likely to be subject to change at the time of

pricing may be placed together in the beginning of the prospectus after

the front cover page in a ``pricing-related information'' section, or

may be wrapped around the remainder of the prospectus just inside the

front and back cover pages.\14\ While summary and risk factors sections

must remain in the forepart of the prospectus, those sections may

immediately follow the ``pricing-related information'' section rather

than preceding it. To ensure that investors continue to be able to

locate the risk factors section in all offerings with ease, however,

rule revisions also provide that the currently required cross reference

to that section on the cover page of the prospectus now identify with

specificity (e.g. by page number) the location of that section within

the prospectus.\15\ In addition, rule revisions require that the risk

factors section be captioned within the prospectus as ``Risk Factors''

and clarify that the table of contents required on the back cover of

the prospectus must include a reference to the risk factors section and

specify the page number on which it begins.\16\

\13\Certain Commission rules that specify the location of

information in the forepart of the prospectus, or in a specified

order within the prospectus, are being revised to eliminate certain

requirements regarding location. See revisions to Items 503(b) and

503(c) of Regulation S-K, 17 CFR 229.503(b) and 229.503(c); Items

503(b) and 503(c) of Regulation S-B, 17 CFR 228.503(b) and

228.503(c); and Securities Industry Guide 4, 17 CFR 229.801(d).

Consistent with the proposal, no revision has been made to order and

location rules that relate to specific and limited classes of

transactions. See Items 903(a) and 904(a) of Regulation S-K, 17 CFR

229.903(a) and 229.904(a) (summary of a roll-up transaction,

reasonably detailed description of each material risk and effect of

the roll-up transaction); Securities Act Industry Guide 5, 17 CFR

229.801(e), (real estate limited partnerships suitability

standards). In addition, issuers of limited partnership interests

and other real estate investment vehicles must continue to comply

with the disclosure guidance set forth in Securities Act Release No.

6900 (June 17, 1991) (56 FR 28979).

\14\Commenters noted that, if prospectuses are printed in a

folio manner, moving pricing-related information to the front of the

prospectus may not result in earlier printing of the remainder of

the prospectus. Thus, the Commission is providing the flexibility to

``wrap'' the ``pricing-related information'' section. Of course,

whether the price-related information is set forth in the front or

wrapped, the information set forth in the prospectus must be

presented in a clear, concise and understandable fashion, as

required by Rule 421(b) under the Securities Act, 17 CFR 230.421(b).

See also Rule 421(a) under the Securities Act, 17 CFR 230.421(a),

which requires that information in a prospectus be set forth in a

fashion so as not to obscure any of the required information or any

information necessary to keep the required information from being

incomplete or misleading; and Securities Act Release No. 6900 (June

17, 1991) (56 FR 28979).

\15\See revisions to Regulation S-K Item 501(c)(4), 17 CFR

229.501(c)(4), and Regulation S-B Item 501(a)(4), 17 CFR

228.501(a)(4). As revised, the rules also require that the cross

reference be printed in bold-face roman type at least as high as

twelve-point modern type and at least two points leaded.

\16\See revisions to Item 503(c)(1), 17 CFR 229.503(c)(1) and 17

CFR 228.503(c)(1); Item 502(g), 17 CFR 229.502(g); Item 502(f), 17

CFR 228.502(f).

Further, rule revisions provide that specific information currently

required on the prospectus cover pages may be placed under an

appropriate caption elsewhere in the prospectus.\17\ Otherwise, the

prospectus cover pages must continue to contain information currently

specified by Commission rules.\18\

\17\See revisions to Item 502 (a), (b), (c) and (f) of

Regulation S-K, 17 CFR 229.502(a), 229.502(b), 229.502(c) and

229.502(f); revisions to Item 502 (a), (b) and (c) of Regulation S-

B, 17 CFR 228.502(a), 229.502(b) and 228.502(c); and revisions to

the Instruction following Item 502(f) of Regulation S-B, 17 CFR

228.502(f). These revisions relate to disclosure regarding: The

availability of Exchange Act information about the registrant, the

nature of reports to be given to security holders, undertakings with

respect to information incorporated by reference, and the

enforceability of civil liabilities against certain foreign persons.

\18\See Item 501(c) of Regulation S-K, 17 CFR 229.501(c)

(outside front cover page); Item 502 (d), (e) and (g) of Regulation

S-K, 17 CFR 229.502(d), 229.502(e), and 229.502(g) (inside front

cover page and outside back cover page); Item 501 of Regulation S-B,

17 CFR 228.501 (outside front cover page); and Item 502 (d), (e) and

(f) of Regulation S-B, 17 CFR 228.502(d), 228.502(e) and 228.502(f)

(inside front cover page and outside back cover page).

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The ``pricing-related information'' section may include those

portions of a prospectus that may change as a result of pricing, such

as use of proceeds, capitalization, pro forma financial information,

dilution, selling shareholder information and shares eligible for

future sale.\19\ The pricing information portion itself may be included

in the price-related information section. These adopted rule revisions

which allow re-ordering of information within a prospectus for

convenience in printing do not alter existing requirements with respect

to the filing of post-effective amendments or supplements with the

Commission when material changes or additions affect information set

forth in the prospectus contained in an effective registration

statement. However, other rule revisions discussed below do alter

existing requirements.

\19\See Instruction to Item 503(c) of Regulations S-K and S-B,

17 CFR 229.503(c) and 228.503(c).

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2. Changes in Offering Size and Estimated Price Range

To prevent delays in printing prospectuses that arise when the size

of an offering is changed after the effective date of the registration

statement, or the pricing of the securities falls outside the estimated

range, the Commission under specified conditions is eliminating or

streamlining the filings that result. Although originally contemplated

only for Rule 430A offerings, the adopted revisions provide the same

flexibility for all registered offerings.

a. Registration of Classes of Securities

In order to minimize the instances in which an increase in the

offering size would result in the need to file a new registration

statement, rule revisions are being adopted to increase registrants'

flexibility with respect to the amount of securities being registered

in an offering. Under the revised rules, an issuer is permitted to

register securities in an offering by specifying only the title of the

class of securities to be registered and the proposed maximum aggregate

offering price.\20\ Except in the case of [[Page 26606]] the

unallocated shelf procedure available to Form S-3-eligible companies,

the aggregate dollar amount associated with each class of securities

offered must be disclosed in the ``Calculation of Registration Fee''

table. Where issuers register a greater amount of securities than

needed in the offering, such additional securities may be carried

forward to a subsequent registration statement without incurring an

additional registration fee.\21\

\20\See revisions to Rule 457(o) under the Securities Act, 17

CFR 230.457(o). The amount of securities to be registered and the

proposed maximum offering price per unit are no longer required to

be set forth in the ``Calculation of Registration Fee'' table. Of

course, an issuer may continue to specify such information therein

if it so chooses and relies upon Rule 457(a). Regardless of the

method chosen for the ``Calculation of Registration Fee'' table,

however, the registrant continues to be required to specify in the

prospectus the amount of securities being offered and, where the

registrant is not a reporting company, a bona fide estimate of the

range of the maximum offering price. See Rule 501(c)(6) of

Regulation S-K, 17 CFR 229.501(c)(6) and Rule 501(6) of Regulation

S-B, 17 CFR 228.501(6).

\21\See revisions to Rule 429, 17 CFR 230.429. Under Rule 429,

in a new registration statement filed in the future for another

offering of that class of securities, the registrant would indicate

in a footnote to the ``Calculation of Registration Fee'' table that

part of the registration fee had been paid previously in connection

with an earlier registration statement. The footnote must specify

the exact dollar amount of the fee being carried over and the

related registration statement file number.

b. Increases in Offering Size--Registration of Additional Securities

When the pricing terms of an offering are finalized, it is not

unusual for changes to be made in the offering size through adjustments

to both price and volume.\22\ Where this process requires registration

of additional securities, the revised rules and forms permit the filing

of an abbreviated registration statement to register the additional

amount of securities to be offered and sold.\23\ Such an abbreviated

registration is available to an issuer that is registering additional

securities in an amount and at a price that together represent no more

than a 20% increase in the maximum aggregate offering price set forth

in the ``Calculation of Registration Fee'' table in the earlier

effective registration statement.\24\ Such registration would consist

of: The facing page, a statement incorporating by reference the

contents of the earlier registration statement relating to the

offering, all required consents and opinions, and the signature page.

While not required by the rule, the registrant also may include in the

new registration statement, instead of in a filing under Rule 424, any

price-related information with respect to the offering that was omitted

from the earlier registration statement pursuant to Rule 430A.\25\ The

abbreviated registration statement must be filed prior to the time

sales are made and confirmations are sent or given, and will become

effective automatically upon filing.\26\ As adopted, this abbreviated

registration format is available regardless of whether the earlier

registration statement was prepared in reliance upon Rule 430A.

\22\While participants in a registered distribution may only

offer the amount of securities registered to be offered, it is

possible that indications of interest received in response to such

offers may exceed the amount registered to be offered. Sales of

securities in excess of the volume initially registered will not

result in Section 5 liability if the participants in the

distribution did not solicit indications of interest in an amount in

excess of that registered and the procedures discussed in this

section are followed.

\23\See revisions to General instructions of Forms SB-1, SB-2,

S-1, S-2, S-3, S-11, F-1, F-2 and F-3.

\24\In the context of an offering from a shelf registration

statement, the 20% increase would be measured based upon the amount

of securities on the shelf.

\25\Consistent with offerings where a new registration statement

is not required to be filed as a result of a change of no more than

20% in the size of the offering, information necessary to update

disclosure contained in the earlier registration statement as a

result of the increase may be reflected in a form of prospectus

filed under Rule 424(b), 17 CFR 230.424(b). See infra Section

II.A.2.c.

\26\See Rule 462(b), 17 CFR 230.462(b). The registration

statement is deemed to be a part of the earlier registration

statement relating to the offering. See, e.g., General Instruction

V. to Form S-1.

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In addition to providing an abbreviated registration format for

such increases in offering size, rule revisions allow such registration

statements to be filed promptly even when pricing occurs after the

Commission's business hours.\27\ Such a registration statement may be

filed with the Commission by persons other than mandated electronic

filers by transmitting a single copy of it via facsimile to the

Commission's principal office from 5:30 p.m. to 10 p.m.\28\ Electronic

filers may file such a registration statement from 5:30 p.m. to 10 p.m.

by transmitting it through EDGAR.\29\ Such filings become automatically

effective upon receipt by the Commission of the complete facsimile or

EDGAR copy and payment of the filing fee.

\27\See revisions to Rule 110, 17 CFR 230.110; Rule 402, 17 CFR

230.402; Rule 455, 17 CFR 230.455; and Rule 472, 17 CFR 230.472;

Rule 13, 17 CFR 232.13 and Rule 3a, 17 CFR 202.3a.

\28\Effective June 7, 1995, the telephone number for that

facsimile machine is (202) 942-7333 and the telephone number for the

staff person that can answer questions regarding such facsimiles

between the hours of 5:30 p.m. and 10 p.m. (Eastern Standard Time or

Eastern Daylight Savings Time, whichever is currently in effect) is

(202) 942-8900. Filings (other than electronic filings through

EDGAR) between 5:30 p.m. and 10 p.m. on Forms SB-1 and SB-2 for this

purpose must be sent via this facsimile system to the Commission's

principal office rather than to the regional or district offices of

the Commission.

\29\The new EDGAR form types for purposes of registration

statements under Rule 462 are S-1MEF, S-2MEF, S-3MEF, F-1MEF, F-

2MEF, F-3MEF, SB-1MEF and SB-2MEF. A post-effective amendment to any

of these new form types should be designated as form type POS462B.

With respect to other aspects of the adopted proposals and

electronic filers, see also infra Section IV.

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To accommodate payment of the filing fee after the close of banking

hours, rule revisions provide that payment with respect to such

registration statements may be made by: (i) Instructing a bank or wire

transfer service to transmit a wire transfer to the Commission of the

requisite amount as soon as practicable (but in any event no later than

the close of the next business day following the date the registration

statement is faxed to the Commission); and (ii) providing specific

certifications to the Commission with the abbreviated registration

statement.\30\ Specifically, the registrant must certify to the

Commission that: The registrant (or its agent) has so instructed its

bank or a wire transfer service to pay the Commission; that it will not

revoke such instructions; and that it has sufficient funds in the

relevant account to cover the amount of the filing fee. These

instructions may be transmitted on the day of filing the registration

statement after the close of business of such bank or wire transfer

service, provided that the registrant undertakes to confirm receipt of

such instructions by the bank of wire transfer service the following

business day.

\30\See revisions to Rule 111, 17 CFR 230.111. This payment

certification document accompanying an abbreviated registration

statement should be transmitted by electronic filers under EDGAR

form type CORRESP.

c. Changes in Offering Size; Deviation From Price Range

Currently, a post-effective amendment is not required to be filed

where there is a decrease in volume of securities offered or the actual

offering price is outside the disclosed estimated price range, unless

such decrease or change would change materially the disclosure included

in the registration statement at the time of effectiveness.\31\ Under

the revised rules, a post-effective amendment does not have to be filed

in connection with any registered offering if there is a decrease or

increase in the offering size (if such an increase would not require

additional securities to be registered) and/or the actual price is

outside the estimated price range if, in the aggregate, the new size

and price represent no more than a 20% change in the maximum aggregate

offering price set forth in the ``Calculation of

[[Page 26607]] Registration Fee'' table in the effective registration

statement.\32\

\31\See Securities Act Release No. 6964 (Oct. 22, 1992) (57 FR

48970) for a discussion of the materiality standard as it applies to

these changes.

\32\See revision to Instruction to Paragraph (a) of Rule 430A,

17 CFR 230.430A and revisions to Item 512(a)(1)(ii) of Regulations

S-K and S-B, 17 CFR 229.512(a)(1)(ii) and 228.512(a)(1)(ii). This

revision pertains to changes in offering size that occur at pricing

and does not extend to changes made after that time. While no post-

effective amendment is required to be filed, issuers continue to be

responsible for evaluating the effect of a volume change or price

deviation on the accuracy and completeness of disclosure made to

investors. When there is a change in offering size or deviation from

the price range beyond the 20% threshold, a post-effective amendment

would continue to required only if such change or deviation

materially changes the previous disclosure. Of course, if an

increase beyond the 20% threshold requires registration of

additional securities, a new registration statement updated in all

respects must be filed.

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3. Manual Signatures and Incorporation by Reference of Opinions and

Consents

Under the proposal, rule revisions would have provided that

duplicated or facsimile versions of manual signatures could be included

on the signature page in place of the manual signatures currently

required in a registration statement to increase the size of the

offering. In response to comment, the rule revisions being adopted have

been expanded to permit duplicated or facsimile versions of manual

signatures in any registration statement or post-effective amendment

filed under the Securities Act and any reports filed under the Exchange

Act.\33\ These revisions will provide the same flexibility to all paper

filers that is accorded EDGAR filers. In addition, under the revised

rules, signatures on required opinions and consents in such filings

also may be duplicated or facsimile versions of manual signatures.\34\

In all cases where duplicated or facsimile versions of manual

signatures are used, the registrant must maintain the manually signed

version in its files for five years after the filing of the related

document and provide it to the Commission or the staff upon request.

\33\See revisions to Rule 402, 17 CFR 230.402; Rule 12b-11, 17

CFR 240.12b-11; Rule 14d-1, 17 CFR 240.14d-1; and Rule 16a-3, 17 CFR

240.16a-3.

\34\See revisions to Rule 402, 17 CFR 230.402; Rule 439, 17 CFR

230.439; Rule 12b-11, 17 CFR 240.12b-11; Rule 14d-1, 17 CFR 240.14d-

1; and Rule 16a-3, 17 CFR 2401.6a-3.

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Rule revisions also allow opinions and consents required in

abbreviated registration statements registering an additional 20% to be

incorporated by reference to the extent that the opinions and consents

contained in the earlier effective registration statement were drafted

to apply to any subsequent registration statement filed solely to

increase the offering up to a 20% threshold.\35\ Where opinions and

consents cannot be incorporated, duplicated or facsimile versions of

manual signatures may be included in the new opinion or consent

required to be filed in the abbreviated registration statement.

\35\See Rule 411(c) under the Securities Act, 17 CFR 230.411(c),

new Rule 439(b) under the Securities Act, 17 CFR 230.439(b), and

changes to General Instructions of Forms SB-1, SB-2, S-1, S-2, S-3,

S-11, F-1, F-2 and F-3. In addition, Items 601(b)(24) of Regulations

S-K and S-B, 17 CFR 229.601(b)(24) and 17 CFR 228.601(b)(24), are

revised so that a power of attorney included in the earlier

registration statement relating to the offering also may relate to

the short-form registration statement filed to register the

additional securities.

4. Rule 430A Pricing Period

As was proposed, the Commission is extending the period during

which a prospectus supplement containing pricing and other related

information omitted from a registration statement may be filed pursuant

to Rule 430A under the Securities Act.\36\ The ``pricing'' period is

extended from five to fifteen business days after the effective date of

the registration statement or any post-effective amendment thereto.

Although originally proposed as an extended ten-business-day period,

the adopted fifteen-business-day period should provide additional

flexibility for purposes of complying with T+3, without defeating the

purpose of that limitation.\37\

\36\See revisions to Rule 430A(a)(3), 17 CFR 230.430A(a)(3).

\37\The principal purpose of the original five-day limitation

was to prevent delayed offerings being made under Rule 430A by

persons that do not meet the criteria for use of shelf registration.

See Securities Act Release No. 6714 (May 27, 1987) (52 FR 21252).

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Where a Rule 430A offering is not priced within the fifteen-day

period, a post-effective amendment updated in all respects that either

restarts the pricing period or contains the Rule 430A pricing

information (i.e. similar to a traditional pricing amendment) must be

filed and effective prior to sales. While no changes to this

requirement are being made, other rule revisions are being adopted to

minimize the delay that could result. Such a post-effective amendment,

which must be filed prior to the time sales are made and confirmations

are sent, will become effective upon filing if the prospectus contained

therein contains no material changes from, or additions to, the

prospectus previously filed as part of the effective registration

statement other than the price-related information omitted from the

registration statement in reliance on Rule 430A.\38\ A company filing a

post-effective amendment that reflects other material prospectus

changes or additions (other than the ``20% increase in offering size''

changes) would follow current procedures under which the post-effective

amendment is subject to selective review and is declared effective.

\38\See Rule 462(c), 17 CFR 230.462(c).

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5. Immediate Takedowns From a Shelf Registration

The Four Firms proposal requested that the Commission permit

immediate takedowns after a shelf registration statement becomes

effective. As indicated in the Proposing Release, immediate offerings

from an effective shelf registration statement currently are permitted.

At the time of effectiveness, information in the shelf registration

statement is required to the extent it is known or reasonably available

to the registrant.\39\ Accordingly, if an offering of securities is

certain at the time the shelf registration statement becomes effective,

the relevant information (e.g, description of securities, plan of

distribution and use of proceeds) must be disclosed with respect to the

securities subject to the immediate takedown and the Rule 430A

undertakings should be included (if the issuer wants Rule 430A pricing

flexibility).

\39\See Rule 409, 17 CFR 230.409.

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6. Acceleration of Effectiveness

As was proposed, adopted rule revisions allow requests to

accelerate effectiveness of registration statements to be transmitted

to the Commission by fax transmission. In addition, rule revisions

permit oral requests for acceleration to be made, \40\ provided that

the Commission previously receives a letter indicating that the

registrant and the managing underwriter may make oral requests for

acceleration and that they are aware of their obligations under the

Securities Act.\41\

\40\See Securities Act Rule 461(a), 17 CFR 230.461(a). Both an

authorized representative of the registrant and an authorized

representative of the managing underwriter will be required to make

such request orally. The rule revisions do not adopt a requirement

suggested by some commenters that an oral request be followed by

transmission to the Commission of a written request, nor are

facsimile or duplicate versions required to be followed by

transmission to the Commission of the manually signed versions.

\41\See Securities Act Rule 461(a), 17 CFR 230.461(a). The

liability of persons who sign the registration statement, the

underwriters and others under section 11(a) of the Securities Act,

15 U.S.C. 77k(a), is based upon the registration statement at the

time it becomes effective.

In order to facilitate the ability of the Commission staff,

pursuant to delegated authority, to reach a determination to accelerate

effectiveness based on the public availability of information and

[[Page 26608]] other factors set forth in section 8(a) of the

Securities Act,\42\ persons making oral acceleration requests should be

prepared to provide orally the prospectus dissemination information

that typically is set forth in a written acceleration request. Such

information generally includes: The date of the preliminary prospectus

distributed, the approximate dates of distribution, the number of

prospectus underwriters and dealers to whom the preliminary prospectus

was furnished, the number of prospectuses so distributed, and the

number of prospectuses distributed to others, identifying them in

general terms.\43\ In addition, in the case of non-reporting companies,

an affirmative statement from the managing underwriter may be requested

with regard to whether it has been informed by participating

underwriters and dealers that copies of the preliminary prospectus have

been or are being distributed to all persons to whom it is then

expected to mail confirmations not less than 48 hours prior to the time

it is expected to mail such confirmations.\44\

\42\15 U.S.C. 77h(a).

\43\See Rule 418(a)(7), 17 CFR 230.418(a)(7). See also Rule 460,

17 CFR 230.460.

\44\See Rule 418(a)(7)(vi), 17 CFR 230.418(a)(7)(vi) and

Securities Act Release No. 4968 (Apr. 24, 1969) (34 FR 7235). Of

course, this information is not applicable to delayed shelf

offerings.

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7. T+4 Settlement for Firm Commitment Offerings Priced After the Close

of the Market

As discussed elsewhere in this release, the Commission is

eliminating the current exemption contained in Rule 15c6-1 for firm

commitment offerings, thus bringing those transactions under a T+3

settlement standard. In response to the Four Firms proposal, the

Commission proposed an amendment to Rule 15c6-1 that would establish

four business days after the trade date (``T+4'') as the standard

settlement cycle for firm commitment offerings priced after 4:30 p.m.

The vast majority of commenters who addressed this proposal expressed

support for settlement on a T+4 basis.\45\ Several of these commenters

reasoned that it is difficult to print and deliver the final prospectus

within a T+3 settlement time frame when the securities are priced late

in the day. These commenters also opined that the potential systemic

and market risks associated with the T+4 provision should be limited

because most of the secondary trading in the subject securities will

not begin until the opening of the market on the next business day and,

therefore, the primary issuance of securities will be available to

settle secondary trading in the security.

\45\One commenter argued that a T+4 standard was unnecessary

because the override provision in paragraph (a) of Rule 15c6-1, if

broadly interpreted, would provide sufficient flexibility to after-

market offerings. See letter from John Brandow, Davis Polk &

Wardwell to Jonathan Katz, Securities and Exchange Commission, dated

April 3, 1995. As discussed elsewhere in this release, the

Commission is instead adopting a specific overridge provision for

firm commitment offerings.

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The T+4 provision in the Four Firms proposal was intended to

provide time to deliver prospectuses by settlement. Establishing T+4 as

the standard for this category of offerings also will provide certainty

and reduce confusion as to the appropriate settlement cycle.

Accordingly, the Commission is adopting the amendment for settlement of

specific offerings on a T+4 basis with only minor technical

corrections.\46\

\46\See Rule 15c6-1(c), 17 CFR 15c6-1(c). As proposed, this

paragraph provided an exemption for securities sold pursuant to a

firm commitment offering. This language has been amended to clarify

that the exemption applies to contracts for the sale of such

securities and that the exemption only applies to sales from the

issuer to the underwriter and initial sales by broker-dealers

participating in the offering.

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8. Investment Companies

The Commission requested comment on whether the Four Firms proposal

should apply to investment companies. Commenters did not believe that

open-end investment companies would require any special provisions to

facilitate T+3 settlement because they are engaged in the continuous

offerings of securities with pre-printed prospectuses, but endorsed the

application of the Four Firms proposal to closed-end investment

companies and unit investment trusts (``UITs''). The revisions to Rule

430A (the extension of the pricing period and changes to offering size

and price range), to Rule 461(a) (facsimile or oral accelerations of

effective dates), and to Rule 15c6-1 (T+4 settlement for firm

commitment offerings priced after 4:30 p.m.) by their terms apply to

the registration statements of closed-end investment companies and

UITs.\47\ The Investment Company Act permits UITs, but not closed-end

investment companies, to increase the size of an offering by post-

effective amendment.\48\ Therefore, the Commission is adopting rule and

form revisions that will permit closed-end investment companies to take

advantage of the short-form registration statement that permits an

increase in offering size.\49\ Under the rule and form amendments, as

adopted, the Commission is not making any changes to re-order

investment company prospectuses because the current prospectus

requirements appear to provide sufficient flexibility to accommodate

expedited printing of prospectuses.

\47\As noted previously, the revised rules permit duplicated or

facsimile versions of manual signatures in all reports filed under

the Exchange Act, as well as registration statements filed under the

Securities Act. The Commission is adopting similar revisions for

investment companies. See revisions to Rule 8b-11, 17 CFR 270.8b-11.

\48\See Section 24(e)(1) of the Investment Company Act, 15

U.S.C. 80a-24(e)(1); see also Rule 485(b)(1)(i), 17 CFR

270.485(b)(1)(i), which provides for the immediate effectiveness of

a post-effective amendment filed by a UIT for the purpose of

increasing the amount of securities proposed to be offered under

Section 24(e)(1).

\49\Modifications to the registration statement form for closed-

end investment companies, Form N-2 (17 CFR 274.11a), provide for the

registration of additional securities pursuant to new Rule 462(b).

Revisions to (i) paragraph (b) of Rule 483, which sets forth the

exhibit requirements for investment company registration statement

forms, provide that a power of attorney filed for a registration

statement form also relates to a related registration statement form

filed pursuant to Rule 462(b), and (ii) paragraph (c) of Rule 483

provide that a consent may be incorporated by reference into a

registration statement form filed pursuant to Rule 462(b) from a

related registration statement form.

B. The SIA Approach

The second part of the Commission's proposal was based on the

proposal submitted by the SIA. The SIA proposal was predicated on the

premise that prospectus delivery could be accomplished much more

quickly if issuers could convey the Section 10(a) prospectus

information in multiple documents delivered to investors at different

times, rather than in a traditional, integrated final prospectus

prepared through last-minute mass printing, shipping and mailing.

Rule 434 under the Securities Act,\50\ which is based upon the SIA

approach, is being adopted largely as proposed. Rule 434 permits

participants in registered firm commitment underwritten offerings of

securities for cash and specified registered offerings for cash made on

an agency basis (hereinafter, ``eligible offerings'') to convey

prospectus information in more than one document and allows such

documents to be delivered to investors at separate intervals and in

varying manners. Rule 434 does not require that a final, integrated

prospectus be delivered to investors. In the aggregate, however, all

required information will still be disclosed to investors prior to or

at the same time as a confirmation is sent, either through physical

delivery or, in the case of short-form registered offerings,\51\

through physical delivery and delivery by publication.

\50\17 CFR 230.434.

\51\``Short-form'' registration is used herein to refer to

registration on Commission Forms S-3 or F-3. To be eligible to use

short-form registration for a primary offering, an issuer must have

a public float of $75 million and must have been reporting with the

Commission for one year. See General Instructions I.A.3. and I.B.1.

to Form S-3 and General Instructions I.A.1. and I.B.1. to Form F-

3. [[Page 26609]]

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1. Non-Short-Form Registered Offerings

As adopted, in eligible offerings not using short-form

registration, persons may comply with their prospectus delivery

obligations by delivering a preliminary prospectus,\52\ a term sheet,

if necessary,\53\ and a confirmation.\54\ The term sheet is required to

include all information material to investors with respect to the

offering that is not disclosed in the delivered preliminary prospectus

or the confirmation.\55\

\52\``Preliminary prospectus'' is used herein to refer to either

a preliminary prospectus used in reliance on Rule 430, 17 CFR

230.430, or a prospect omitting information in reliance on Rule

430A(a), 17 CFR 230.430A(a).

\53\In order to reflect industry nomenclature, ``term sheet'' is

used in this release to refer to the document called a

``supplementing memorandum'' in the Proposing Release. In addition,

``abbreviated term sheet'' is now used in place of ``abbreviated

supplementing memorandum.'' Regardless of the nomenclature used,

these documents constitute supplements to prospectuses subject to

completion.

\54\The preliminary prospectus, the term sheet and the

confirmation may be delivered together or separately under Rule 434,

provided that the former two are sent or given prior to or with the

confirmation. See Rule 434(b)(1), 17 CFR 230.434(b)(1). See also

Rule 434(c)(1), 17 CFR 230.434(c)(1) with respect to the preliminary

or base prospectus, the abbreviated term sheet and the confirmation.

Note that the prospectus delivery obligations pursuant to Rule 15c2-

8 under the Exchange Act are independent of those discussed in this

section. A term sheet or abbreviated term sheet generally may not be

sent or given prior to the preliminary or base prospectus given the

limitations set by section 5(b)(1) of the Securities Act and the

definition of ``prospectus'' set forth in section 2(10) of the

Securities Act. The Commission will raise no objection where a

preliminary or base prospectus being delivered separately is sent or

given in a manner reasonably calculated to arrive prior to or at the

same time with the term sheet or abbreviated term sheet but the term

sheet or abbreviated term sheet nevertheless precedes the

preliminary or base prospectus.

\55\See Rule 434(b)(3), 17 CFR 230.434(b)(3).

Neither the process of filing registration statements and

amendments thereto, nor the Commission's registration statement review

process, is intended to be altered in connection with the adoption of

Rule 434.\56\ Rule 434 requires that the preliminary prospectus and the

term sheet, taken together, not materially differ from the disclosure

included in the effective registration statement.\57\ The term sheet

must be filed with the Commission within two business days after the

earlier of pricing or first use.\58\ Thus, term sheets generally will

not be reviewed prior to use. Except in the case of delayed shelf

offerings, the term sheet is deemed to be a party of the registration

statement as of the time such registration statement was declared

effective.\59\ In the case of such delayed offerings, the term sheet is

deemed to be a part of the registration statement as of the time the

term sheet is filed with the Commission.\60\

\56\As under current practice, the staff will continue to

consider whether recirculation of a prospectus is needed when there

are material changes in disclosure arising after the prospectus

subject to completion has been given to investors. See Rules 460 and

461(b), 17 CFR 230.460 and 230.461(b).

\57\See Rule 434(b)(2), 17 CFR 230.434(b)(2). The disclosure in

the preliminary prospectus and term sheet would be measured against

the disclosure set forth in the registration statement as of its

effective date, including omitted Rule 430A price-related

information deemed a part thereof by virtue of Rule 430A(b), 17 CFR

230.430A(b).

\58\See Rule 424(b)(7), 17 CFR 230.424(b)(7). Each filed copy of

a term sheet or abbreviated terms sheet, like other filings under

Rule 424, must contain in the upper right corner of its cover page a

reference to the part of Rule 424 under which the filing is made

(i.e. Rule 424(b)(7)) and the file number of the registration

statement to which the prospectus relates. See Rule 424(e), 17 CFR

230.424(e).

\59\See Rule 434(d), 17 CFR 230.434(d).

\60\Id.

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Several commenters on the Proposing Release suggested that the

Commission require that a second preliminary prospectus (either an

updated version or another copy of the version previously circulated)

be circulated to investors either with the term sheet or shortly before

the term sheet is delivered.\61\ Circulation of a second preliminary

prospectus is not required by Rule 434 as adopted, but nothing in the

Rule precludes offering participants from doing so.

\61\See, e.g., letter from John Olson et al., American Bar

Association to Jonathan Katz, Securities and Exchange Commission,

dated April 14, 1995; letter from Edward Adams, Fredrikson & Byron

to Jonathan Katz, Securities and Exchange Commission, dated March

31, 1995; and letter from Steven Machov, Merrill Corporation to

Jonathan Katz, Securities and Exchange Commission, dated April 3,

1995.

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As adopted, Rule 434 is not limited with respect to the amount of

time that could elapse between delivery of the preliminary prospectus

and the term sheet. Further, the rule does not contain any limitation

on the magnitude of changes from the disclosure set forth in the

circulated preliminary prospectus that the term sheet may contain. As

noted above, however, the Rule is not available for non-short-form

registered offerings if the disclosure in the preliminary prospectus

and term sheet materially differ from the disclosure contained in the

prospectus filed as a part of the effective registration statement.

2. Short-Form Registered Offerings

In Rule 434 eligible offerings using short-form registration,

persons may comply with their prospectus delivery obligations by

delivering a preliminary or base prospectus,\62\ an abbreviated term

sheet\63\ and a confirmation. An abbreviated term sheet must contain,

unless previously disclosed in the circulated preliminary or base

prospectus or in the registrant's Exchange Act filings incorporated by

reference into the prospectus: (i) The description of securities

required by Item 202 of Regulation S-K, or a fair and accurate summary

thereof;\64\ and (ii) information regarding material changes required

by Item 11 of Form S-3or Form F-3.\65\ Under new Rule 434, certain

offering-specific disclosure included in a traditional final

prospectus\66\ will be required only in the prospectus supplement filed

with the Commission.\67\ This information could include, for example,

use of proceeds and syndicate and specific plan of distribution

information.

\62\``Base propectus'' is used herein to refer to a prospectus

contained in a registration statement at the time of effectiveness

(or as subsequently revised) that omits information that is not yet

known concerning an offering pursuant to Rule 415, 17 CFR 230.415.

\63\The abbreviated term sheet is filed with the Commission in

accordance with Rule 424(b)(7), 17 CFR 230.424(b)(7). See Rule

434(d), 17 CFR 230.434(d), with respect to abbreviated term sheets

being deemed a part of the registration statement.

\64\17 CFR 229.202.

\65\See Rule 434(c)(3), 17 CFR 230.434(c)(3).

\66\Offering-specific information required to be filed but

permitted not to be delivered physically under Rule 434 short-form

registered offerings is set forth in Items 501-510 of Regulation S-

K, 17 CFR 229.502.229.510. In addition, a summarized version of the

description of securities set forth in Item 202 of Regulation S-K,

17 CFR 229.202, may be delivered physically rather than the full

description filed with the Commission.

\67\See Rule 434(c)(2), 17 CFR 230.434(c)(2). For example, the

final prospectus traditionally delivered to investors in shelf

offerings has included information set forth in both the base

prospectus and a prospectus supplement. In shelf offerings relying

on Rule 434, information in the prospectus supplement will not be

delivered physically to investors, except to the extent it is

disclosed pursuant to the abbreviated term sheet. The prospectus

supplement in such offerings, however, must be filed with the

Commission by the time any confirmation is sent or given to

investors. See Rule 434(c)(2)(ii), 17 CFR 230.434(c)(2)(ii).

Registrants will be required to indicate on the cover page of their

registration statement, by checking a box, that reliance on Rule 434

for prospectus delivery is intended. Persons checking the box, however,

would not be required to rely on Rule 434 if they later determined to

deliver prospectus information otherwise in connection with the

offering.

Any term sheet or abbreviated term sheet sent or given in reliance

upon Rule 434 must state on the top center of the front cover page that

it is a supplement to a prospectus and identify [[Page 26610]] that

prospectus by issuer name and date. The term sheet or abbreviated term

sheet also, in that location, must clearly identify that it is a term

sheet or abbreviated term sheet used in reliance on Rule 434, must

clearly identify the documents that, when taken together, constitute

the section 10(a) prospectus, and must be dated as of the approximate

date of its first use.\68\

\68\See Rule 434(e), 17 CFR 230.434(e).

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3. Scope of the Proposed Rule

a. Underwritten Offerings for Cash

Rule 434, as adopted, extends only to offerings where the sole

consideration given in exchange for securities is cash. Offerings such

as exchange offers and business combinations are not included. As noted

in the Proposing Release, in those offerings, the final prospectus is

traditionally used to begin the process of soliciting votes or consents

to a transaction. Thus, the logistical difficulties of prospectus

delivery are not associated with those offerings.

The adopted Rule also does not extend to offerings that are made

other than on a firm commitment basis with underwriters, except for

offerings of investment grade debt made in connection with a medium-

term note (``MTN'') program registered with the Commission on either a

continuous or delayed shelf basis.\69\ Concern has been expressed that

exclusion of these MTN securities from the Rule would unnecessarily

push such transactions out of the T+3 settlement cycle.\70\ Further,

while these MTN securities typically are sold through an underwriter on

an agency rather than a firm commitment basis, assurance has been given

that, once an agreement has been reached between the investor and the

MTN program agent, the preparation and delivery of a prospectus occurs

in a manner identical to that in a principal transaction.\71\

\69\See Rule 434(a), 17 CFR 230.434(a). These MTN offerings rely

on Rule 415(a)(1) (ix) or (x), respectively.

\70\See letter from Kevin Moynihan, Merrill Lynch to Jonathan

Katz, Securities and Exchange Commission, dated April 7, 1995.

\71\Id.

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b. Offerings of Asset-Backed Securities

As adopted, Rule 434 excludes offerings of asset-backed securities

(``ABS'').\72\ Settlement in connection with ABS offerings currently

takes place outside of the T+3 time frame, on approximately a T+10

cycle, and is likely to continue to do so. As noted in the Proposing

Release, the existing settlement schedule is the result primarily of

factors unique to these offerings, which are the same factors that

result in such offerings not lending themselves to use of incremental

disclosure. Those factors include: (i) The distinctive structuring

process for most ABS offerings, which typically extends almost to the

time when the security is priced, whereby a variety of structures may

be considered as the sponsor attempts to meet investors' needs' (ii)

the time needed for identification of the specific pool of collateral

which will support the ABS; and (iii) the necessity of creating shortly

before sale of the ABS a prospectus supplement of significant length

and complexity that details the characteristics of specific pool assets

and the transaction's structure, the summarization of which would not

serve as an adequate substitute for the complete description in the

prospectus supplement.

\72\``Asset-backed security'' is defined for purposes of Rule

434 the same way it is defined in General Instruction I.B.5. of Form

S-3: a security that is primarily serviced by the cashflows of a

discrete pool of receivables or other financial assets, either fixed

or revolving, that by their terms convert into cash within a finite

time period plus any rights or other assets designed to assure the

servicing or timely distribution of proceeds to the securityholders.

See Rule 434(f), 17 CFR 230.434(f).

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c. Offerings of Structured Securities

As adopted, Rule 434 also excludes offerings of structured

securities.\73\ ``Structured securities,'' for purposes of Rule 434,

are defined to mean securities whose cash flow characteristics depend

upon one or more indices or that have imbedded forwards or options or

securities where an investor's investment return and the issuer's

payment obligations are contingent on, or highly sensitive to, changes

in the value of underlying assets, indices, interest rates or cash

flows.\74\ This definition was proposed to be included in Rule 15c6-1

but is set forth in Rule 434 instead Rule 15c6-1 as adopted makes no

reference to such securities. As noted in the Proposing Release, these

securities usually have terms that are highly complex, with many

employing one or more indices as a basis for determining the issuer's

payment obligations (e.g., coupon, principal, redemption payments). A

structured security's value is derived not only from the

creditworthiness of its issuer, but also from any underlying assets,

indices, interest rates or cash flow upon which the security is

predicated. Because of the complexities associated with these

securities, investors may not fully understand the investment risks

when purchasing structured securities, especially those with

complicated structures. A complete description of offering-specific

information therefore is of particular importance to investors in

making an investment decision, given the market risks resulting from

the structure of these securities. Otherwise, as noted in the Proposing

Release, the incremental distribution of information under the Rule,

when combined with the complex nature of these securities, could result

in material disclosure not being readily accessible to investors.

\73\See Rule 434(a), 17 CFR 230.434(a).

\74\See Rule 434(h), 17 CFR 230.434(h).

d. Investment Companies

As proposed, Rule 434 would have provided that it would not apply

to the offering of any security of any company registered under the

Investment Company Act. The Commission requested comment on whether the

prospectus delivery modifications in the SIA proposal also should apply

to closed-end investment companies and UITs. Commenters endorsed the

proposed prospectus delivery method for closed-end investment companies

and UITs, and the Commission is adopting revisions that apply new Rule

434 to these investment companies.\75\

\75\See revisions to Rule 497, 17 CFR 230.497, which sets forth

fund prospectus filing requirements with the Commission, that

require, parallel to the changes to the general prospectus filing

requirements in Rule 424, 17 CFR 230.424(b), the filing of

prospectuses allowed under Rule 434 on or prior to the date a

confirmation is sent or given to an investor.

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4. Conforming Amendments to Rule 14c2-8

a. Rule 15c2-8 Amendments

The Commission is adopting the amendments to Rule 15c2-8\76\ as

proposed. The amendments expand the use of the terms ``preliminary

prospectus'' and ``final prospectus,'' as currently used in the Rule,

to include the terms ``prospectus subject to completion'' and ``Section

10(a) prospectus,'' respectively, the reflect the terminology of Rule

434. Additionally, the term ``sending'' is substituted for the term

``mailing'' to accommodate prospectus delivery by means other than

traditional mailing.

\76\17 CFR 240.15c2-8.

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Six commenters addressed Rule 15c2-8. None of these commenters

objected to the proposed changes, although several of them raised other

issues regarding Rule 15c2-8, which are discussed below. The Commission

may propose further amendments to Rule 15c2-8 based on its experience

with Rule 434, or more generally, to reflect market developments and

staff interpretations [[Page 26611]] that have occurred since the Rule

was last amended.\77\

\77\Rule 15c2-8(d) was last amended in Exchange Act Release No.

25546 (Apr. 4, 1988) (53 FR 11841).

b. Rule 15c2-8 Issues Raised by Commenters

In the case of an offering of securities of an issuer that

previously has not been required to file reports under section 13(a)

and 15(d) of the Exchange Act, Rule 15c2-8(b)\78\ requires that a

preliminary prospectus be delivered to any person who is expected to

receive a confirmation of sale at least 48 hours prior to sending such

confirmation.\79\ Two commenters noted that because preliminary

prospectuses generally are not used in offerings of asset-backed

securities, some broker-dealers have adopted the practice of delivering

the final prospectus to purchasers at least 48 hours prior to mailing

the confirmation of an asset-backed security. These commenters urged

the Commission either to modify Rule 15c2-8 to acknowledge this

industry practice or to except asset-backed securities from Rule 15c2-

8(b). In the Commission's view, delivery of the final prospect is at

least 48 hours prior to sending the confirmation will satisfy the

requirement of Rule 15c2-8(b) in the case of offerings of asset-backed

securities where no preliminary prospectus is used.\80\

\78\17 CFR 240.15c2-8(b).

\79\This requirement is satisfied by delivering a preliminary

prospectus that is current at the time of its delivery.

\80\This interpretation of paragraph (b) is consistent with the

longstanding staff position that delivery of a final prospectus at

least 48 hours prior to sending the confirmation is required in

cases where no preliminary prospectus is circulated and the offering

is sold solely on the basis of a final prospectus.

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With respect to the obligations of a managing underwriter to

provide copies of the prospectus to participating broker-dealers, two

commenters sought interpretive guidance with respect to the terms

``sufficient copies'' and ``reasonable quantities,'' as used in Rule

15c2-8 (g) and (h),\81\ respectively, in light of the recently issued

Brown & Wood letter,\82\ which permits electronic delivery of

prospectuses in certain circumstances.\83\ The Brown & Wood letter was

not intended to modify any obligation that a managing underwriter

currently has pursuant to paragraphs (g) or (g) of Rule 15c2-8 to

produce, reproduce, or deliver, in such quantities as requested, a

preliminary, amended, or final prospectus to broker-dealers

participating in the offering. Accordingly, a managing underwriter may

discharge its obligations pursuant to Rule 15c2-8 (g) or (h) by

delivering a prospectus (or any portion thereof) electronically to a

participating broker-dealer, if the recipient broker-dealer expressly

consents to delivery in such form.

\81\17 CFR 240. 15c2-8 (g) and (h). Paragraph (g) requires a

managing underwriter to take reasonable steps to ensure that all

broker-dealers participating in an offering are promptly furnished

with ``sufficient copies, as requested by them'' of each

preliminary, amended, or final prospectus to enable such

participating brokers-dealers to comply with their obligations under

Rule 15c2-8 (b), (c), (d), and (e). Similarly, paragraph (h)

requires a managing underwriter to take reasonable steps to ensure

that any broker-dealer participating in an offering or trading in

the registered security is furnished ``reasonable quantities of the

final prospectus * * * as requested by him'' in order to enable to

broker-dealer to comply with sections 5(b) (1) and (2) of the

Securities Act.

\82\See supra footnote 6.

\83\These commenters inquired whether Rule 15c2-8 (g) and (h)

would permit a managing underwriter to deliver the pre-printed

portion of the prospectus by traditional methods, followed by the

remainder (or ``wrap'' portion), containing only the pricing and

other ``last minute'' disclosure, by electronic transmission. These

commenters advised that the recipient broker-dealers would be

expected to duplicate the remainder (or ``wrap'' portion) and

assemble the two parts for delivery to investors.

One commenter suggested revising Rule 15c2-8(b) to require delivery

of the preliminary prospectus at least 48 hours, but not more than 60

days, prior to sending the confirmation. Another commenter suggested

that the Commission require the managing underwriter to deliver the

final prospectus to offering participants by the close of business on

T+2, so that such participants may send the prospectus to investors no

later than T+3. Consistent with the adoption of both the SIA proposal

and the Four Firms proposal, the Commission believes that offering

participants should have as much flexibility as possible to determine

how to comply with their prospectus delivery obligations within T+3,

without the burden of additional restrictions, and therefore has

determined not to amend the Rule as suggested at this time. As noted,

however, the Commission may propose additional amendments to Rule 15c2-

8 based on its experience with Rule 434.

III. Revision of the Rule 15c6-1 Exemption

In the Proposing Release, the Commission proposed to establish A+3

as the presumptive settlement date for firm commitment offerings by

eliminating the exemption from T+3 settlement for sales for cash in

connection with firm commitment offerings.\84\ However the Commission

proposed to allow managing underwriters flexibility to choose T+3, T+4,

or T+5 settlement under specific conditions, including written notice

to prospective purchasers and the exchanges prior to pricing.\85\ The

Commission also proposed exemptions from T+3 settlement for firm

commitment offerings of asset-backed and structured securities. These

amendments were proposed to reduce the confusion caused by different

settlement cycles for new issue and secondary market trades, while also

providing flexibility to settle certain firm commitment offerings

beyond T+3 when the standard settlement cycle cannot be met.

\84\See 17 CFR 240.15c6-1(b)(2).

\85\Rule 15c6-1(a) contains a general override provision that

permits the parties to a contract to specify an alternate settlement

cycle if the agreement is made at the time of the trade. Complying

with this provision in the context of a firm commitment offering may

be difficult because of the need to obtain the express agreement of

all parties participating in the offering.

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Most commenters supported elimination of the general exclusion for

firm commitment offerings. As one commenter noted, establishing a T+3

settlement standard for these transactions will reduce risk, provide

certainty in the form of a written standard, and avoid bifurcation of

the settlement cycle.\86\ Several commenters cited specific categories

of securities requiring settlement cycles longer than T+3.\87\ Most

commenters, however, preferred to resolve difficulties in settling

offerings through a general override provision rather than specific

exemptions of classes of securities.

\86\See letter from Brent Taylor, J.P. Morgan Securities, Inc.

to Jonathan Katz, Securities and Exchange Commission , dated March

20, 1995.

\87\In addition to asset-backed securities and structured

securities, commenters raised settlement concerns in connection with

medium term note programs registered under short-form shelf

registration, capital market debt transactions, securities exempt

from registration under section 3(a)(4) or 3(a)(11) of the

Securities Act, and certain transactions involving swaps.

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

The majority of comments that addressed the merits of the proposed

override provisions expressed support for a specific override provision

for firm commitment offerings but objected to the terms of Rule 15c6-

1(e) as proposed. Several commenters asserted that the T+5 maximum

settlement period did not provide adequate flexibility for settlement

of certain firm commitment offerings. Furthermore, many of the

commenters argued that the requirement of written notice to all

perspective purchasers on or before pricing was burdensome and should

be eliminated.\88\ Commenters disagreed [[Page 26612]] over the manner

in which an alternate settlement date should be established, though

most commenters concurred that such authority should not be granted

solely to the managing underwriter.

\88\Specifically, several commenters asserted that the

settlement period may not be known sufficiently in advance of

pricing to provide written notice and that such notice is

duplicative of the information provided orally and in the

confirmation.

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

To address the various issues raised by the commenters in

connection with the proposed modifications of the exemption for firm

commitment offerings, the Commission is amending Rule 15c6-1 to

eliminate the exemption for firm commitment offerings and to include a

specific override provision\89\ which will permit the establishment of

an alternate settlement date for the sale of all securities subject to

a firm commitment offering upon agreement by the managing underwriter

and the issuer of the securities. This override provision does not

contain the notice requirements in the proposed override position and

does not limit the settlement period to a maximum of T+5. The

Commission has decided not to adopt a provision exempting offerings of

particular classes of securities. Instead, the Commission believes that

an alternate settlement cycle can be established for these offerings

through the override provision for firm commitment offerings.

\89\See Rule 15c6-1(d), 17 CFR 15c6-1(d). This specific override

provision would not extend to offerings of investigation grade debt

made in connection with a medium-term note program sold through an

underwriter on an agency basis. Such transportation may, however, be

accomplished in accordance with the general override provision set

forth in Rule 15c6-1(a), 17 CFR 240.15c6-1(a).

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

In adopting the proposed amendments to Rule 15c6-1, the Commission

seeks to provide flexibility for settlement beyond T+3 for certain firm

commitment offerings that require such treatment in light of the

special characteristics of the subject securities. The Commission is

mindful of the concert that lack of certainty in settlement standards

may create confusion in the marketplace. Accordingly, the Commission

stresses that the override position is not intended to dilute the

presumption in favor of application of the T+3 settlement cycle in

connection with firm commitment offerings. Instead, the override

provision is intended to be used only in those circumstances when T+3

settlement is not feasible.

Furthermore, the Commission recognizes that it is important that

the registered clearing agencies, through which settlement of firm

commitment offerings and secondary market trades will occur, receive

notice of non-standard settlement dates. The Commission encourages

issuers and underwriters to notify promptly the registered clearing

agencies of the settlement period of an offering. It may be appropriate

for the clearing agencies as self-regulatory organizations under the

Exchange Act to modify their rules to require such notice at such times

and in such manners as the clearing agencies need to make provision for

non-standard settlement cycles. The Commission will monitor the use of

the override provision on an ongoing basis.

IV. EDGAR Usage

After the effective date of these proposals and until the necessary

form types are available through the EDGAR system, registrants that are

mandated electronic filers should file in paper format those documents

relating to the proposals being adopted other than the abbreviated

registration form filed pursuant to Rule 462(b).\90\ All other

documents unrelated to the proposals being adopted must continue to be

filed electronically by mandated electronic filers. The necessary form

types are expected to be available with the release of a new version of

the EDGARLink software in Autumn 1995. Notice will be provided in the

SEC Digest, the Federal Register and on the EDGAR Bulletin Board when

the new EDGAR form types are available.

\90\Only those documents that are filed pursuant to Rule

424(b)(7), Rule 462(c) and Rule 497(h)(2) may be filed in paper

format. See supra footnotes 29 and 30 and accompanying text.

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

V. Cost-Benefit Analysis

Five commenters responded to the Commission's request for comments

regarding the costs and benefits of the proposed rules. Four of the

five commenters expected the cost of printing and shipping of

prospectuses to decline as a result of the proposed rules.\91\ The

other commenter stated that the increased administrative burdens and

costs that may be imposed on dealers as a result of multiple or

duplicate mailings of various documents could negate the intended

benefit of the SIA approach.\92\ One commenter, a financial printer,

provided empirical data on the proposals. The printer concluded that,

in three basic scenarios regarding the printing and delivery of a Form

S-1, a reduction in costs ranging from 8% to 88% would be obtainable as

a result of the new delivery alternatives available under the proposed.

rules.\93\ The Commission believes the new rule and amendments provide

market participants with additional flexibility that should result in

lower transaction costs, while not diminishing investor protection.

\91\See letter from Karl Barnickol, American Society of

Corporate Secretaries to Jonathan Katz, Securities and Exchange

Commission, dated April 10, 1995; Joel Brenner, Storch & Brenner (on

behalf of R.R. Donnelley Financial), to Jonathan G. Katz, Secretary,

Securities and Exchange Commission, dated March 31, 1995; W. Scott

Jardine, Nike Securities L.P., to Jonathan Katz, Securities and

Exchange Commission, dated March 31, 1995; Larry W. Martin, John

Nuveen & Co. Incorporated, to Jonathan Katz, Securities and Exchange

Commission, dated March 30, 1995.

\92\See Letter from George Miller, Public Securities Association

to Jonathan Katz, Securities and Exchange Commission, dated April

10, 1995.

\93\See letter from Joel Brenner, Storch & Brenner (on behalf of

R.R. Donnelley Financial), to Jonathan G. Katz, Secretary,

Securities and Exchange Commission, dated March 31, 1995.

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

VI. Summary of Final Regulatory Flexibility Analysis

The Commission has prepared a Final Regulatory Flexibility Analysis

(``FRFA''), pursuant to the requirements of the Regulatory Flexibility

Act,\94\ regarding the rule and amendments to existing regulations

being adopted. The FRFA notes that the new rule and amendments will

provide entities with greater flexibility and efficiency with respect

to the timing of printing and delivery of prospectus information,

thereby facilitating compliance with Rule 15c6-1 under the Exchange Act

and access to the public securities markets. As discussed more fully in

the analysis, the new rule and amendments to Securities Act regulations

should decrease costs associated with fulfilling entities' prospectus

delivery obligations under the Securities Act. The amendments to

Exchange Act rules and forms are not anticipated to have any

significant economic impact on entities. The new rule may impose

minimal additional reporting, recordkeeping or compliance requirements,

while the amendments do not impose any new reporting, recordkeeping or

compliance requirements on any entities. No alternatives to the new

rule and amendments consistent with their objectives and the

Commission's statutory mandate were found.

\94\5 U.S.C. 604 (1988).

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

The overall effect of the new rule and amendments is to provide

entities increased efficiency in raising capital from the public

securities markets. The aspects that provide for the incremental

delivery of prospectus information will apply to any entity engaged in

a public distribution with respect to an eligible offering. The

amendments to Securities Act regulations should streamline the

registration process and thereby facilitate compliance with prospectus

delivery within T+3. The new rule and amendments to Securities Act

regulations also will apply to certain [[Page 26613]] investment

companies registered under the investment Company Act, i.e. closed-end

investment companies and unit investment trusts. The amendments to

regulations under section 15(c) of the Exchange Act will reflect the

availability of expedited delivery of prospectus information provided

by the new rule and amendments to the Securities act regulations.

A copy of the FRFA may be obtained from Michael Mitchell, Division

of Corporation Finance, Securities and Exchange Commission, 450 Fifth

Street, NW., Mail Stop 3-3, Washington, DC 20549, (202) 942-2900.

VII. Effective Date

The new rule and the revisions to rules and forms are effective

June 7, 1995, in accordance with the Administrative Procedures Act,

which allows for effectiveness in less than 30 days after publication,

inter alia, for ``a substantive rule which grants or recognizes an

exemption or relieves a restriction'' and ``as provided by the agency

for good cause found and published with the rule.'' 5 U.S.C. 553 (d)(1)

and (d)(3). The adopted rule and revisions primarily lessen

restrictions of existing rules in that they either provide a more

efficient way for offering participants to accomplish prospectus

delivery or they streamline the registration and prospectus preparation

and printing processes. In addition, the Commission finds there is good

cause for the adopted rule and revisions to become effective on June 7,

1995 since they are designed to allow market participants to accomplish

prospectus delivery in eligible offerings in a T+3 settlement cycle.

Since the T+3 settlement cycle will become effective on June 7, 1995,

the adoption of the rule and revisions on that date will ensure that

potential market disruption relating to prospectus delivery prior to

settlement of such offerings would be avoided. The exemption from Rule

15c6-1 for certain firm commitment offerings also is being eliminated

in this time frame because of its potential for market disruption if

allowed to go into effect. Any possible negative effect of eliminating

that exemption is offset by the adoption of an expanded provision

allowing such offerings to settle outside of the Rule 15c6-1 mandated

time frame if the participants in the offering so elect.

VIII. Statutory Bases

The new rule and the amendments to the Commission's rules and forms

under the Securities Act and amendments to the Commission's rules under

the Exchange Act are being adopted pursuant to sections 6, 7, 8, 10 and

19(a) of the Securities Act and sections 3, 4, 10, 12, 13, 14, 15, 16

and 23 of the Exchange Act. The revisions to the Commission's rules and

forms under the Investment Company Act are being adopted pursuant to

sections 8(b) and 38(a) under the Investment Company Act, as amended.

List of Subjects in 17 CFR Parts 202, 228, 229, 230, 232, 239, 240, 270

and 274

Administrative practice and procedure, Brokers, Investment

companies, Reporting and recordkeeping requirements, Securities, Small

businesses.

Text of Amendments

In accordance with the foregoing, Title 17, chapter II of the Code

of Federal Regulations is amended as follows:

PART 202--[AMENDED]

1. The authority citation for part 202 continues to read in part as

follows:

Authority: 15 U.S.C. 77s, 77t, 78d-1, 78u, 78w, 78II(d), 79r,

79t, 77sss, 77uuu, 80a-37, 80a-41, 80b-9, and 80b-11, unless

otherwise noted.

* * * * *

2. By revising the seventh sentence of the introductory text of

Sec. 202.3a to read as follows:

Sec. 202.3a Instructions for filing fees.

* * * Filing fees paid pursuant to Section 6(b) of the Securities

Act of 1933 or pursuant to Section 307(b) of the Trust Indenture Act of

1939 should be designated as ``restricted,'' except that filing fees

paid with respect to registration statements filed pursuant to Rule

462(b) (Sec. 230.462(b) of this chapter) should be designated as

``unrestricted.'' * * *

PART 228--INTEGRATED DISCLOSURE SYSTEM FOR SMALL BUSINESS ISSUERS

3. The authority citation for Part 228 continues to read as

follows:

Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s,

77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77jjj, 77nnn, 77sss,

78l, 78m, 78n, 78o, 78w, 78ll, 80a-8, 80a-29, 80a-30, 80a-37, 80b-

11, unless otherwise noted.

4. By revising paragraph (a)(4) of Sec. 228.501 to read as follows:

Sec. 228.501 (Item 501) Front of registration statement and outside

front cover of prospectus.

* * * * *

(a) * * *

(4) Cross reference to, and identify the location within the

prospectus of (e.g., by page number or other specific location), the

risk factors section of the prospectus, printed in bold-face roman type

at least as high as twelve-point modern type and at least two points

leaded;

* * * * *

5. By amending Sec. 228.502 by revising the introductory text,

removing the heading from paragraph (a)(1) and replacing the ``.'' at

the end of paragraph (a)(1) with a ``;'', adding a heading and

introductory text to paragraph (a), adding a sentence at the end of

paragraph (b), adding a sentence at the end of paragraph (c), revising

paragraph (f) and including the introduction paragraph to read as

follows:

Sec. 228.502 (Item 502) Inside front and outside back cover pages of

prospectus.

On the inside front cover page of the prospectus, except as

otherwise specified and except that the outside back cover page may be

used for paragraphs (e) and (f), disclose the following:

(a) Available information. On the inside front cover page of the

prospectus or under an appropriate caption elsewhere in the prospectus:

* * * * *

(b) * * * Such disclosure need not be included on the inside front

cover page of the prospectus if it is included under an appropriate

caption elsewhere in the prospectus.

(c) * * * Such disclosure need not be included on the inside front

cover page of the prospectus if it is included under an appropriate

caption elsewhere in the prospectus.

* * * * *

(f) Table of contents. Include a detailed table of contents showing

the various sections or subdivisions of the prospectus, including any

risk factors section set forth in the prospectus pursuant to Item

503(c) (Sec. 228.503(c)), and the page number on which each such

section or subdivision begins.

Instruction to Item 502

Canadian issuers should, in addition to the disclosure required

by this Item, provide the information required by Item 502(f) of

Regulation S-K. Such disclosure need not be included on the inside

front cover page of the prospectus if it is included under an

appropriate caption elsewhere in the prospectus.

6. By revising paragraph (b) and paragraph (c) of Sec. 228.503 to

read as follows:

Sec. 228.503 (Item 503) Summary information and risk factors.

* * * * *

(b) Address and telephone number. Include in the prospectus the

complete [[Page 26614]] mailing address and telephone number of the

small business issuer's principal executive offices.

(c) Risk factors. (1) Discuss under the caption ``Risk Factors''

any factors that make the offering speculative or risky. These factors

may include no operating history, no recent profit from operations,

poor financial position, the kind of business in which the small

business issuer is engaged or proposes to engage, or no market for the

small business issuer's securities.

(2) The risk factor discussion should immediately follow the

summary section. If no summary section is necessary, the risk factor

discussion should immediately follow the cover page of the prospectus

or, if included, a pricing information section that immediately follows

the cover page.

Instruction to Item 503(c). ``Pricing information'' as used in

paragraph (c) of this section shall mean price and price-related

information of the type that may be omitted from the prospectus in

an effective registration statement in reliance on Rule 430A(a)

(Sec. 230.430A(a) of this chapter) and information disclosed in a

prospectus but subject to change as a result of pricing.

7. By adding one sentence to the end of paragraph (a)(1)(ii) of

Sec. 228.512 to read as follows:

Sec. 228.512 (Item 512) Undertakings.

* * * * *

(a) * * *

(1) * * *

(ii) * * * Notwithstanding the foregoing, any increase or decrease

in volume of securities offered (if the total dollar value of

securities offered would not exceed that which was registered) and any

deviation from the low or high end of the estimated maximum offering

range may be reflected in the form of prospectus filed with the

Commission pursuant to Rule 424(b) (Sec. 230.424(b) of this chapter)

if, in the aggregate, the changes in volume and price represent no more

than a 20% change in the maximum aggregate offering price set forth in

the ``Calculation of Registration Fee'' table in the effective

registration statement.

* * * * *

8. By amending Sec. 228.601 to revise the third sentence of

paragraph (b)(24) to read as follows:

Sec. 228.601 (Item 601) Exhibits.

* * * * *

(b) * * *

(24) Power of attorney. * * * A power of attorney that is filed

with the Commission must relate to a specific filing or an amendment,

provided, however, that a power of attorney relating to a registration

statement under the Securities Act or an amendment thereto also may

relate to any registration statement for the same offering that is to

be effective upon filing pursuant to Rule 462(b) under the Securities

Act (Sec. 230.462(b) of this chapter.* * *

PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES

ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND

CONSERVATION ACT OF 1975--REGULATION S-K

9. The authority citation for part 229 continues to read in part as

follows:

Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77i, 77k, 77s,

77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn,

77sss, 78c, 78i, 78j, 78l, 78m, 78n, 78o, 78w, 78ll(d), 79e, 79n,

79t, 80a-8, 80a-29, 80a-30, 80a-37, 80b-11, unless otherwise noted.

* * * * *

10. The authority citation following Sec. 229.503 is removed.

11. By revising paragraph (c)(4) of Sec. 229.501 to read as

follows:

Sec. 229.501 (Item 501) Forepart of registration statement and outside

front cover page of prospectus.

* * * * *

(c) * * *

(4) Cross reference to and identify the location within the

prospectus of (e.g., by page number or other specific location), where

applicable, the discussion in the prospectus prescribed by Item 503 of

Regulation S-K (Sec. 229.503) of material risks in connection with the

purchase of the securities, printed in bold-face roman type at least as

high as twelve-point modern type and at least two points leaded;

* * * * *

12. By amending Sec. 229.502 by revising the introductory text,

revising the introductory text of paragraph (a), adding a sentence at

the end of paragraph (b), adding a sentence at the end of paragraph

(c), revising the last sentence of the introductory text of paragraph

(f), and revising paragraph (g) to read as follows:

Sec. 229.502 (Item 502) Inside front and outside back cover pages of

prospectus.

The following information, to the extent applicable, shall appear

on the inside front cover page of the prospectus, except as otherwise

specified and except that the information required by paragraphs (e)

and (g) of this Item may be set forth on the outside back cover page.

(a) Available information. Registrants subject to the reporting

requirements of section 13(a) or 15(d) of the Exchange Act immediately

prior to the filing of the registration statement shall, on the inside

front cover page of the prospectus or under an appropriate caption

elsewhere in the prospectus:

* * * * *

(b) * * * Such disclosure need not be included on the inside front

cover page of the prospectus if it is included under an appropriate

caption elsewhere in the prospectus.

(c) * * * Such disclosure need not be included on the inside front

cover page of the prospectus if it is included under an appropriate

caption elsewhere in the prospectus.

* * * * *

(f) * * * Such disclosure need not be included on the inside front

cover page of the prospectus if it is included under an appropriate

caption elsewhere in the prospectus.

* * * * *

(g) Table of contents. Include a reasonably detailed table of

contents showing the subject matter of the various sections or

subdivisions of the prospectus, including any risk factors section set

forth in the prospectus pursuant to Item 503(c) (Sec. 229.503(c)), and

the page number on which each such section or subdivision begins.

13. By revising paragraph (b) and paragraph (c) of Sec. 229.503 to

read as follows:

Sec. 229.503 (Item 503) Summary information, risk factors and ratio of

earnings to fixed charges.

* * * * *

(b) Address and telephone number. Registrants shall include in the

prospectus the complete mailing address, including zip code, and the

telephone number, including area code, of their principal executive

offices.

(c) Risk factors. (1) Registrants, where appropriate, shall set

forth under the caption ``Risk Factors'' a discussion of the principal

factors that make the offering speculative or one of high risk; these

factors may be due, among other things, to such matters as an absence

of an operating history of the registrant, an absence of profitable

operations in recent periods, the financial position of the registrant,

the nature of the business in which the registrant is engaged or

proposes to engage, or, if common equity or securities convertible into

or exercisable for common equity are being offered, the absence of a

previous market for the registrant's common equity.

(2) The risk factor discussion should immediately follow the

summary section. If no summary section is [[Page 26615]] necessary, the

risk factor discussion should immediately follow the cover page of the

prospectus or, if included a pricing information section that

immediately follows the cover page.

Instruction to Item 503(c). ``Pricing information'' as used in

paragraph (c) of this section shall mean price and price-related

information of the type that may be omitted from the prospectus in

an effective registration statement in reliance on Rule 430A(a)

(Sec. 230.430A(a) of this chapter) and information disclosed in a

prospectus but subject to change as a result of pricing.

* * * * *

14. By revising paragraph (a)(1)(ii) of Sec. 229.512 to read as

follows:

Sec. 229.512 (Item 512) Undertakings.

* * * * *

(a) * * *

(1) * * *

(ii) To reflect in the prospectus any facts or events arising after

the effective date of the registration statement (or the most recent

post-effective amendment thereof) which, individually or in the

aggregate, represent a fundamental change in the information set forth

in the registration statement. Notwithstanding the foregoing, any

increase or decrease in volume of securities offered (if the total

dollar value of securities offered would not exceed that which was

registered) and any deviation from the low or high end of the estimated

maximum offering range may be reflected in the form of prospectus filed

with the Commission pursuant to Rule 424(b) (Sec. 230.424(b) of this

chapter) if, in the aggregate, the changes in volume and price

represent no more than 20% change in the maximum aggregate offering

price set forth in the ``Calculation of Registration Fee'' table in the

effective registration statement.

* * * * *

15. By amending Sec. 229.601 to revise the fourth sentence of

paragraph (b)(24) to read as follows:

Sec. 229.601 (Item 601) Exhibits.

* * * * *

(b) * * *

(24) Power of attorney. * * * A power of attorney that is filed

with the Commission shall relate to a specific filing or an amendment

thereto, provided, however, that a power of attorney relating to a

registration statement under the Securities Act or an amendment thereto

also may relate to any registration statement for the same offering

that is to be effective upon filing pursuant to Rule 462(b) under the

Securities Act (Sec. 230.462(b) of this chapter). * * *

* * * * *

16. Guide 4 (referenced in Sec. 229.801(d)) is amended by removing

the first sentence of the Guide.

Note: The text of Guide 4 does not and the amendments will not

appear in the Code of Federal Regulations.

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

17. The authority citation for part 230 is revised to read in part

as follows:

Authority: 15 U.S.C. 77b, 77f, 77g, 77h, 77j, 77s, 77sss, 78c,

78d, 78l, 78m, 78n, 78o, 78w, 78ll(d), 78t, 80a-8, 80a-29, 80a-30,

and 80a-37, unless otherwise noted.

* * * * *

18. The authority citations following Secs. 230.429, 230.439 and

230.461 are removed.

19. By amending paragraph (a) of Sec. 230.110 by revising the

phrase ``paragraphs (b) and (c)'' to read ``paragraphs (b), (c) and

(d)'' and adding paragraph (d) to read as follows:

Sec. 230.110 Business hours of the Commission.

* * * * *

(d) Filings by facsimile. Registration statements and post-

effective amendments thereto filed by facsimile transmission pursuant

to Rule 462(b) (Sec. 230.462(b)) and Rule 455 (Sec. 230.455) may be

filed with the Commission each day, except Saturdays, Sundays and

federal holidays, from 5:30 p.m. to 10 p.m., Eastern Standard Time or

Eastern Daylight Savings Time, whichever is currently in effect.

20. By amending Sec. 230.111 by designating the existing text as

paragraph (a) and adding paragraph (b) to read as follows:

Sec. 230.111 Payment of fees.

* * * * *

(b) Notwithstanding paragraph (a) of this section, for registration

statements filed pursuant to Rule 462(b) (Sec. 230.462(b)) and Rule

110(d) (Sec. 230.110(d)), payment of filing fees for the purposes of

this section may be made by:

(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 Commission's account at Mellon Bank as soon as

practicable but no later than the close of the next business day

following the filing of the registration statement; and

(2) The registrant submitting with the registration statement at

the time of filing a certification that:

(i) The registrant or its agent has so instructed its bank or a

wire transfer service;

(ii) The registrant or its agent will not revoke such instructions;

and

(iii) The registrant or its agent has sufficient funds in such

account to cover the amount of such filing fee.

Note to paragraph (b): Such 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.

21. By amending Sec. 230.402 to add paragraphs (d) and (e) to read

as follows:

Sec. 230.402 Number of copies; binding; signatures.

* * * * *

(d) Notwithstanding any other provision of this section, if a

registration statement is filed pursuant to Rule 462(b)

(Sec. 230.462(b)) and Rule 110(d) (Sec. 230.110(d)), one copy of the

complete registration statement, including exhibits and all other

papers and documents filed as a part thereof shall be filed with the

Commission. Such copy should not be bound and may contain facsimile

versions of manual signatures in accordance with paragraph (e) of this

section.

(e) Duplicated or facsimile versions of manual signatures of

persons required to sign any document filed or submitted to the

Commission under the Act, shall be considered manual signatures for

purposes of the Act and rules and regulations thereunder, provided

that, the original manually signed document is retained by the filer

for a period of five years and upon request the filer furnishes to the

Commission or the staff the original manually signed document.

22. By amending Sec. 230.424 by adding paragraph (b)(7) before the

Instruction, by revising the heading ``Instruction:'' to read

``Instruction 1:'', and adding Instruction 2 to read as follows:

Sec. 230.424 Filing of prospectuses; number of copies.

* * * * *

(b) * * *

(7) Ten copies of a term sheet or abbreviated term sheet sent or

given in reliance upon Rule 434 under the Act (Sec. 230.434) shall be

filed with the Commission pursuant to this paragraph no later than the

second business day following the earlier of the date of determination

of the offering price, or the date it is first used after effectiveness

in connection with a [[Page 26616]] public offering or sales, or

transmitted by a means reasonably calculated to result in filing with

the Commission by that date. In addition to the information required by

paragraph (e) of this section, each copy of such term sheet or

abbreviated term sheet shall include the information required by Rule

434(e) (Sec. 230.434(e)).

Instruction 1: * * *

Instruction 2: Notwithstanding paragraphs (b)(1), (b)(2), (b)(4)

and (b)(5) of this section, a form of prospectus sent or given in

reliance on Rule 434(c) (Sec. 230.434(c)) with respect to securities

registered on Form S-3 or Form F-3 (Sec. 239.13 or Sec. 239.33 of

this chapter), other than an abbreviated term sheet filed pursuant

to paragraph (b)(7) of this section, shall be filed with the

Commission on or prior to the date on which a confirmation is sent

or given.

* * * * *

23. By adding a sentence at the end of paragraph (b) to

Sec. 230.429 to read as follows:

Sec. 230.429 Prospectus relating to several registration statements.

* * * * *

(b) * * * Where a combined prospectus is being used pursuant to

paragraph (a) of this section, a note should be added to the

``Calculation of Registration Fee'' table in the latest registration

statement or any amendment thereto, stating the number or amount of

securities being carried forward and the amount of the filing fee

associated with such securities that was previously paid with the

earlier registration statement(s).

24. By amending Sec. 230.430A by removing the word ``five'' and

adding, in each place it appears, the word ``fifteen'' in paragraph

(a)(3) and by adding a sentence at the end of Instruction to paragraph

(a) to read as follows:

Sec. 230.430A Prospectus in a registration statement at the time of

effectiveness.

* * * * *

Instruction to paragraph (a): * * * Notwithstanding the

foregoing, any increase or decrease in volume (if the total dollar

value of securities offered would not exceed that which was

registered) and any deviation from the low or high end of the range

may be reflected in the form of prospectus filed with the Commission

pursuant to Rule 424(b)(1) (Sec. 230.424(b)(1)) or Rule 497(h)

(Sec. 230.497(h)) if, in the aggregate, the changes in volume and

price represent no more than a 20% change in the maximum aggregate

offering price set forth in the ``Calculation of Registration Fee''

table in the effective registration statement.

* * * * *

25. By adding Sec. 230.434 to read as follows:

Sec. 230.434 Prospectus delivery requirements in firm commitment

underwritten offerings of securities for cash.

(a) Where securities are offered for cash in a firm commitment

underwritten offering or investment grade debt securities are offered

for cash on an agency basis under a medium term note program, and such

securities are neither asset-backed securities nor structured

securities, and the conditions described in paragraph (b) or paragraph

(c) of this section are satisfied, then:

(1) The prospectus subject to completion and the term sheet

described in paragraph (b) of this section, taken together, and the

prospectus subject to completion and the abbreviated term sheet

described in paragraph (c) of this section, taken together, shall

constitute prospectuses that meet the requirements of section 10(a) of

the Act (15 U.S.C. 77j(a)) for purposes of section 5(b)(2) of the Act

(15 U.S.C. 77e(b)(2)) and section 2(10(a) of the Act (15 U.S.C.

77b(10)(a)); and

(2) The section 10(a) prospectus described in paragraph (a)(1) of

this section shall have:

(i) Been sent or given prior to or at the same time that a

confirmation is sent or given for purposes of section 2(10)(a) of the

Act; and

(ii) Accompanied or preceded the transmission of the securities for

purpose of sale or for delivery after sale for purposes of Section

5(b)(2) of the Act.

(b) With respect to offerings of securities that are registered on

a form other than Form S-3 or Form F-3 (Sec. 239.13 or Sec. 239.33 of

this chapter), and with respect to offerings of securities by only

those investment companies registered under the Investment Company Act

of 1940 (15 U.S.C. 80a-1 et seq.) that register their securities on

Form N-2 (Sec. 274.11a-1 of this chapter) or Form S-6 (Sec. 239.16 of

this chapter), the following conditions are satisfied:

(1) A prospectus subject to completion and any term sheet described

in paragraph (b)(3) of this section, together or separately, are sent

or given prior to or at the same time with the confirmation;

(2) Such prospectus subject to completion and term sheet, together,

are not materially different from the prospectus in the registration

statement at the time of its effectiveness or an effective post-

effective amendment thereto (including, in both, instances, information

deemed to be a part of the registration statement at the time of

effectiveness pursuant to Rule 430A(b) (Sec. 230.430A(b)); and

(3) A term sheet under this paragraph (b) shall set forth all

information material to investors with respect to the offering that is

not disclosed in the prospectus subject to completion or the

confirmation.

(c) With respect to offerings of securities registered on Form S-3

or Form F-3 (Sec. 239.13 or Sec. 239.33 of this chapter), the following

conditions are satisfied.

(1) A prospectus subject to completion and the abbreviated term

sheet described in paragraph (c)(3) of this section, together or

separately, are sent or given prior to or at the same time with the

confirmation;

(2) A form of prospectus that:

(i) Discloses information previously omitted from the prospectus

filed as part of an effective registration statement in reliance upon

Rule 430A (Sec. 230.430A), to the extend not set forth in the

abbreviated term sheet (as described in paragraph (c)(3) of this

section), shall be filed pursuant to Rule 424(b) (Sec. 230.424(b)) on

or prior to the date on which a confirmation is sent or given; or

(ii) Discloses the public offering price, description of

securities, to the extent not set forth in the abbreviated term sheet

(as described in paragraph (c)(3) of this section), and specific method

of distribution or similar matters shall be filed pursuant to Rule

424(b) (Sec. 230.424(b)) on or prior to the date on which a

conformation is sent or given; and

(3) The abbreviated term sheet under this paragraph (c) shall set

forth, if not previously disclosed in the prospectus subject to

completion or the registrant's Exchange Act filings incorporated by

reference into the prospectus:

(i) The description of securities required by Item 202 of

Regulation S-K (Sec. 229.202 of this chapter), or a fair and accurate

summary thereof; and

(ii) All material changes to the registrant's affairs required to

be disclosed pursuant to Item 11 of Form S-3 or Form F-3 (Sec. 239.13

or Sec. 239.33 of this chapter), as applicable.

(d) Except in the case of offerings pursuant to Rule 415(a)(1)(x),

(Sec. 230.415(a)(1)(x), the information contained in any term sheet or

abbreviated term sheet described under this section shall be deemed to

be a part of the registration statement as of the time such

registration statement was declared effective. In the case of offerings

pursuant to Rule 415(a)(1)(x) (Sec. 230.415(a)(1)(x)), the information

contained in any term sheet or abbreviated term sheet described under

this section shall be deemed to be a part of the registration statement

as of the [[Page 26617]] time such information is filed with the

Commission.

Instruction: With respect to the obligation to file any form of

prospectus, term sheet, or abbreviated term sheet used in reliance

on this section, see Rule 424(b) (Sec. 230.424(b)) or Rule 497(h)

(Sec. 230.497(h)).

(e) Any term sheet or abbreviated term sheet described under this

section shall, in the top center of the cover page thereof, state that

such document is a supplement to a prospectus and identify that

prospectus by issuer name and date; clearly identify that such document

is a term sheet or abbreviated term sheet used in reliance on Rule 434;

set forth the approximate date of first use of such document; and

clearly identify the documents that, when taken together, constitute

the Section 10(a) prospectus.

(f) For purposes of this section, asset-backed securities shall

mean asset-backed securities as defined in General Instruction 1.B.5.

of Form S-3 (Sec. 239.13 of this chapter).

(g) For purposes of this section, prospectus subject to completion

shall mean any prospectus that is either a preliminary prospectus used

in reliance on Rule 430 (Sec. 230.430), a prospectus omitting

information in reliance upon Rule 430A (Sec. 230.430A), or a prospectus

omitting information that is not yet known concerning a delayed

offering pursuant to Rule 415(a)(i)(x) (Sec. 230.415(a)(1)(x)) that is

contained in a registration statement at the time of effectiveness or

as subsequently revised.

(h) For purposes of this section, structured securities shall mean

securities whose cash flow characteristics depend upon one or more

indices or that have embedded forwards or options or securities where

an investor's investment return and the issuer's payment obligations

are contingent on, or highly sensitive to, changes in the value of

underlying assets, indices, interest rates or cash flows.

(i) For purposes of this section, investment grade securities shall

mean investment grade securities as defined in General Instruction

I.B.2. of Form S-3 or Form F-3 (Sec. 239.13 or Sec. 239.33 of this

chapter).

(j) For the purposes of this section, a firm commitment

underwritten offering shall include a firm commitment underwritten

offering of securities by a closed-end company or by a unit investment

trust registered under the Investment Company Act of 1940.

26. By designating the existing text as paragraph (a) and adding

paragraph (b) to Sec. 230.439 to read as follows:

Sec. 230.439 Consent to use of material incorporated by reference.

(a) * * *

(b) Notwithstanding paragraph (a) of this section, any required

consent may be incorporated by reference into a registration statement

filed pursuant to Rule 462(b) under the Act (Sec. 230.462(b)) from a

previously filed registration statement relating to that offering,

provided that, the consent contained in the previously filed

registration statement expressly provides for such incorporation.

27. By revising the second and third sentences of Sec. 230.455 to

read as follows:

Sec. 230.455 Place of filing.

* * * Registration statements on Form SB-1 or SB-2 may be filed

with the Commission either at its principal office or at the

Commission's regional or district offices as specified in General

Instruction A to each of those forms, except that registration

statements and post-effective amendments thereto on such forms that are

filed pursuant to Rule 462(b) (Sec. 230.462(b)) and Rule 110(d)

(Sec. 230.110(d)) shall be filed at the Commission's principal office.

Such material may be filed by delivery to the Commission through the

mails or otherwise; provided, however, that only registration

statements and post-effective amendments thereto filed pursuant to Rule

462(b) (Sec. 230.462(b)) and Rule 110(d) (Sec. 230.110(d)) may be filed

by means of facsimile transmission.

28. By amending Sec. 230.457 to revise paragraph (o) read as

follows:

Sec. 230.457 Computation of fee.

* * * * *

(o) Where an issuer is offering securities, the registration fee

may be calculated on the basis of the maximum aggregate offering price

of all the securities listed in the ``Calculation of Registration Fee''

Table. The number of shares or units of securities need not be included

in the ``Calculation of Registration Fee'' Table. If the maximum

aggregate offering price increases prior to the effective date of the

registration statement, a pre-effective amendment must be filed to

increase the maximum dollar value being registered and the additional

filing fee shall be paid.

29. By revising the first sentence of paragraph (a) and adding two

new sentences immediately after the first sentence of paragraph (a) to

Sec. 230.461 to read as follows:

Sec. 230.461 Acceleration of effective date.

(a) Requests for acceleration of the effective date of a

registration statement shall be made by the registrant and the managing

underwriters of the proposed issue, or, if there are no managing

underwriters, by the principal underwriters of the proposed issue, and

shall state the date upon which it is desired that the registration

statement shall become effective. Such requests may be made in writing

or orally, provided that, if an oral request is to be made, a letter

indicating that fact and stating that the registrant and the managing

or principal underwriters are aware of their obligations under the Act

must accompany the registration statement for a pre-effective amendment

thereto) at the time of filing with the Commission. Written requests

may be sent to the Commission by facsimile transmission. * * *

* * * * *

30. By revising the section heading, designating the existing text

as paragraph (a), and adding paragraphs (b) and (c) to Sec. 230.462 to

read as follows:

Sec. 230.462 Immediate effectiveness of certain registration

statements and post-effective amendments.

(a) * * *

(b) A registration statement and any post-effective amendment

thereto shall become effective upon filing with the Commission if:

(1) The registration statement is for registering additional

securities of the same class(es) as were included in an earlier

registration statement for the same offering and declared effective by

the Commission;

(2) The new registration statement is filed prior to the time

confirmations are sent or given; and

(3) The new registration statement registers additional securities

in an amount and at a price that together represent no more than 20% of

the maximum aggregate offering price set forth for each class of

securities in the ``Calculation of Registration Fee'' table contained

in such earlier registration statement.

(c) If the prospectus contained in a post-effective amendment filed

prior to the time confirmations are sent or given contains no

substantive changes from or additions to the prospectus previously

filed as part of the effective registration statement, other than

price-related information omitted from the registration statement in

reliance on Rule 430A of the Act (Sec. 230.430A), such post-effective

amendment shall become effective upon filing with the Commission.

31. By amending Sec. 230.472 to add paragraph (e) to read as

follows: [[Page 26618]]

Sec. 230.472 Filing of amendments; number of copies.

* * * * *

(e) Notwithstanding any other provision of this section, if a post-

effective amendment is filed pursuant to Rule 462(b) (Sec. 230.462(b))

and Rule 110(d) (Sec. 230.110(d)), one copy of the complete post-

effective amendment, including exhibits and all other papers and

documents filed as a part thereof shall be filed with the Commission.

Such copy should not be bound and may contain facsimile versions of

manual signatures in accordance with Rule 402(e) (Sec. 230.402)e)).

32. By amending Sec. 230.483 to add a sentence at the end of

paragraph (b) and to designate the existing text of paragraph (c) as

paragraph (c)(1) and adding paragraph (c)(2) to read as follows:

Sec. 230.483 Exhibits for certain registration statements, financial

data schedule.

* * * * *

(b) * * * A power of attorney that is filed with the Commission

shall relate to a specific filing, an amendment thereto, or a related

registration statement that is to be effective upon filing pursuant to

Rule 462(b) (Sec. 230.462(b)) under the Act.

(c)(1) * * *

(2) In a registration statement filed pursuant to Rule 462(b)

(Sec. 230.462(b)) by a closed-end company, any required consent may be

incorporated by reference into the registration statement from a

previously filed registration statement related to the offering,

provided that the consent contained in the previously filed

registration statement expressly provides for such incorporation. Any

consent filed in a Rule 462(b) (Sec. 230.462(b)) registration statement

may contain duplicated or facsimile versions of required signatures,

and such signatures shall be considered manually filed for the purposes

of the Act and the rules thereunder.

33. By amending Sec. 230.497 to designate the existing text of

paragraph (h) as paragraph (h)(1) and adding paragraph (h)(2) to read

as follows:

230.497 Filing of investment company prospectuses--number of copies.

(h) * * *

(2) Ten copies of each term sheet or abbreviated term sheet sent or

given in reliance upon Rule 434 (Sec. 230.434) shall be filed with the

Commission no later than the second business day following the earlier

of the date of determination of the offering price, or the date it is

first used after effectiveness in connection with a public offering or

sales, or transmitted by a means reasonably calculated to result in

filing with the Commission by that date.

* * * * *

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

ELECTRONIC FILERS

34. The authority citation for Part 232 continues to read as

follows:

Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 77sss(a),

78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll(d), 79t(a), 80a-8, 80a-

29, 80a-30 and 80a-37.

35. By adding paragraph (a)(3) before the Note to Sec. 232.13 to

read as follows:

Sec. 232.13 Date of filing; adjustment of filing date.

(a) * * *

(3) Notwithstanding paragraph (a)(2) of this section, any

registration statement or any post-effective amendment thereto filed

pursuant to Rule 462(b) (Sec. 230.462(b) of this chapter) by direct

transmission commending on or before 10 p.m. Eastern Standard Time or

Eastern Daylight Savings Time, whichever is currently in effect, shall

be deemed filed on the same business day.

* * * * *

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

36. The authority citation for part 239 continues to read in part

as follows:

Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77sss, 78c, 78l,

78m, 78n, 78o(d), 78w(a), 78ll(d), 79e, 79f, 79g, 79j, 79, 79m, 79n,

79q, 79t, 80a-8, 80a-29, 80a-30 and 80a-37, unless otherwise noted.

Sec. 239.9 [Amended]

* * * * *

37. By amending Form SB-1 (referenced in Sec. 239.9) by adding

three check boxes to the cover page immediately before ``Calculation of

Registration Fee,'' by adding a Note to appear immediately after the

Calculation of Registration Fee table, and by adding paragraph H to

General Instructions to read as follows:

Note: The text of Form SB-1 does not and the amendments will not

appear in the Code of Federal Regulations.

Form SB-1-Registration Statement Under the Securities Act of 1933

* * * * *

If this Form is filed to register additional securities for an

offering pursuant to Rule 462(b) under the Securities Act, check the

following box and list the Securities Act registration statement

number of the earlier effective registration statement for the same

offering.[ ]

If this Form is a post-effective amendment filed pursuant to

Rule 462(c) under the Securities Act, check the following box and

list the Securities Act registration statement number of the earlier

effective registration statement for the same offering.[ ]

If delivery of the prospectus is expected to be made pursuant to

Rule 434, please check the following box.[ ]

* * * * *

Calculation of Registration Fee

Note: If the filing fee is calculated pursuant to Rule 457(o)

under the Securities Act, only the title of the class of securities

to be registered, the proposed maximum aggregate offering price for

that class of securities and the amount of registration fee need to

appear in the Calculation of Registration Fee table. Any difference

between the dollar amount of securities registered for such

offerings and the dollar amount of securities sold may be carried

forward on a future registration statement pursuant to Rule 429

under the Securities Act.

* * * * *

General Instructions

* * * * *

H. Registration of additional securities. With respect to the

registration of additional securities for an offering pursuant to

Rule 462(b) under the Securities Act, the registrant may file a

registration statement consisting only of the following: The facing

page; a statement that the contents of the earlier registration

statement, identified by file number, are incorporated by reference;

required opinions and consents; the signature page; and any price-

related information omitted from the earlier registration statement

in reliance on Rule 430A that the registrant chooses to include in

the new registration statement. The information contained in such a

Rule 462(b) registration statement shall be deemed to be a part of

the earlier registration statement as of the date of effectiveness

of the Rule 462(b) registration statement. Any opinion or consent

required in the Rule 462(b) registration statement may be

incorporated by reference from the earlier registration statement

with respect to the offering, if: (i) Such opinion or consent

expressly provides for such incorporation; and (ii) such opinion

relates the securities registered pursuant to Rule 462(b). See Rule

411(c) and Rule 439(b) under the Securities Act.

* * * * *

Sec. 239.10 [Amended]

38. By amending Form SB-2 (referenced in Sec. 239.10) by adding

three check boxes to the cover page immediately before ``Calculation of

Registration Fee,'' by adding two sentences to the end of the Note

following the Calculation of Registration Fee table, and by adding

paragraph C to General Instructions to read as follows:

Note: The text of Form SB-2 does not and the amendments will not

appear in the Code of Federal Regulations.

Form SB-2--Registration Statement Under the Securities Act of 1933

* * * * * [[Page 26619]]

If this Form is filed to register additional securities for an

offering pursuant to Rule 462(b) under the Securities Act, please

check the following box and list the Securities Act registration

statement number of the earlier effective registration statement for

the same offering.[ ]

If this Form is a post-effective amendment filed pursuant to

Rule 462(c) under the Securities Act, check the following box and

list the Securities Act registration statement number of the earlier

effective registration statement for the same offering.[ ]

If delivery of the prospectus is expected to be made pursuant to

Rule 434, please check the following box [ ]

* * * * *

Calculation of Registration Fee

* * * * *

Note: * * * If the filing fee is calculated pursuant to Rule

457(o) under the Securities Act, only the title of the class of

securities to be registered, the proposed maximum aggregate offering

price for that class of securities and the amount of registration

fee need to appear in the Calculation of Registration Fee table. Any

difference between the dollar amount of securities registered for

such offerings and the dollar amount of securities sold may be

carried forward on a future registration statement pursuant to Rule

429 under the Securities Act.

* * * * *

General Instructions

* * * * *

C. Registration of additional securities. With respect to the

registration of additional securities for an offering pursuant to

Rule 462(b) under the Securities Act, the registrant may file a

registration statement consisting only of the following: The facing

page; a statement that the contents of the earlier registration

statement, identified by file number, are incorporated by reference;

required opinions and consents; the signature page; and any price-

related information omitted from the earlier registration statement

in reliance on Rule 430A that the registrant chooses to include the

new registration statement. The information contained in such a Rule

462(b) registration statement shall be deemed to be a part of the

earlier registration statement as of the date of effectiveness of

the Rule 462(b) registration statement. Any opinion or consent

required in the Rule 462(b) registration statement may be

incorporated by reference from the earlier registration statement

with respect to the offering, if: (i) Such opinion or consent

expressly provides for such incorporation; and (ii) such opinion

relates to the securities registered pursuant to Rule 462(b). See

Rule 411(c) and Rule 439(b) under the Securities Act.

Sec. 239.11 [Amended]

39. By amending Form S-1 (referenced in Sec. 239.11) by adding

three check boxes to the cover page immediately before ``Calculation of

Registration Fee,'' and by adding two sentences to the end of the Note

following the Calculation of Registration Fee table, and by adding

paragraph V. to General Instructions to read as follows:

Note: The text of Form S-1 does not and the amendments will not

appear in the Code of Federal Regulations.

Form S-1--Registration Statement Under the Securities Act of 1933

* * * * *

If this Form is filed to register additional securities for an

offering pursuant to Rule 462(b) under the Securities Act, please

check the following box and list the Securities Act registration

statement number of the earlier effective registration statement for

the same offering.[ ] ____________

If this Form is a post-effective amendment filed pursuant to

Rule 462(c) under the Securities Act, check the following box and

list the Securities Act registration statement number of the earlier

effective registration statement for the same offering. [ ]

____________

If delivery of the prospectus is expected to be made pursuant to

rule 434, please check the following box. [ ]

* * * * *

Calculation of Registration Fee

* * * * *

Note: * * * If the filing fee is calculated pursuant to Rule

457(o) under the Securities Act, only the title of the class of

securities to be registered, the proposed maximum aggregate offering

price for that class of securities and the amount of registration

fee need to appear in the Calculation of Registration Fee table. Any

difference between the dollar amount of securities registered for

such offerings and the dollar amount of securities sold may be

carried forward on a future registration statement pursuant to Rule

429 under the Securities Act.

General Instructions

* * * * *

V. Registration of Additional Securities

With respect to the registration of additional securities for an

offering pursuant to Rule 462(b) under the Securities Act, the

registrant may file a registration statement consisting only of the

following: The facing page; a statement that the contents of the

earlier registration statement, identified by file number, are

incorporated by reference; required opinions and consents; the

signature page; and any price-related information ommitted from the

earlier registration statement in reliance on Rule 430A that the

registrant chooses to include in the new registration statement. The

information contained in such a Rule 462(b) registration statement

shall be deemed to be a part of the earlier registration statement

as of the date of effectiveness of the rule 462(b) registration

statement. Any opinion or consent required in the Rule 462(b)

registration statement may be incorporated by reference from the

earlier registration statement with respect to the offering, if: (i)

Such opinion or consent expressly provides for such incorporation;

and (ii) such opinion relates to the securities registered pursuant

to rule 462(b). See Rule 411(c) and rule 439(b) under the Securities

Act.

* * * * *

Sec. 239.12 [Amended]

40. By amending Form S-2 (referenced in Sec. 239.12) by adding

three check boxes to the cover page immediately before ``Calculation of

Registration Fee,'' by adding two sentences to the end of the Note

following the Calculation of Registration Fee table, and by adding

paragraph III. to General Instructions to read as follows:

Note: The text of Form S-2 does not and the amendments will not

appear in the Code of Federal Regulations.

Form S-2--Registration Statement under the Securities Act of 1933

* * * * *

If this Form is filed to register additional securities for an

offering pursuant to Rule 462(b) under the Securities Act, please

check the following box and list the Securities Act registration

statement number of the earlier effective registration statement for

the same offering.[ ]

____________

If this Form is a post-effective amendment filed pursuant to

Rule 462(c) under the Securities Act, check the following box and

list the Securities Act registration statement number of the earlier

effective registration statement for the same offering. [ ]

____________

If delivery of the prospectus is expected to be made pursuant to

rule 434, please check the following box. [ ]

* * * * *

Calculation of Registration Fee

* * * * *

Note: * * * If the filing fee is calculated pursuant to Rule

457(o) under the Securities Act, only the title of the class of

securities to be registered, the proposed maximum aggregate offering

price for that class of securities and the amount of registration

fee need to appear in the Calculation of Registration Fee table. Any

difference between the dollar amount of securities registered for

such offering and the dollar amount of securities sold may be

carried forward on a future registration statement pursuant to Rule

429 under the Securities Act.

General Instructions

* * * * *

III. Registration of Additional Securities. With respect to the

registration of additional securities for an offering pursuant to

Rule 462(b) under the Securities Act, the registrant may file a

registration statement consisting only of the following: the facing

page; a statement that the contents of the earlier registration

statement, identified by file number, are incorporated by reference;

required opinions and consents; the signature page; and any price-

related information [[Page 26620]] ommitted from the earlier

registration statement in reliance on Rule 430A that the registrant

chooses to include in the new registration statement. The

information contained in such a Rule 462(b) registration statement

shall be deemed to be a part of the earlier registration statement

as of the date of effectiveness of the Rule 462(b) registration

statement. Any opinion or consent required in the Rule 462(b)

registration statement may be incorporated by reference from the

earlier registration statement with respect to the offering, if: (i)

such opinion or consent expressly provides for such incorporation;

and (ii) such opinion relates to the securities registered pursuant

to Rule 462(b). See Rule 411(c) and Rule 439(b) under the Securities

Act.

* * * * *

Sec. 239.13 [Amended]

41. By amending Form S-3 (referenced in Sec. 239.13) by adding

three check boxes to the cover page immediately before ``Calculation of

Registration Fee,'' by adding three sentences to the end of the Note

following the Calculation of Registration Fee table, and by adding

paragraph IV. to General Instructions to read as follows:

Note: The text of Form S-3 does not and the amendments will not

appear in the Code of Federal Regulations.

Form S-3--Registration Statement Under the Securities Act of 1933

If this Form is filed to register additional securities for an

offering pursuant to Rule 462(b) under the Securities Act, please

check the following box and list the Securities Act registration

statement number of the earlier effective registration statement for

the same offering.[ ]____________

If this Form is a post-effective amendment filed pursuant to

Rule 462(c) under the Securities Act, check the following box and

list the Securities Act registration statement number of the earlier

effective registration statement for the same offering.[ ]

____________

If delivery of the prospectus is expected to be made pursuant to

Rule 434, please check the following box.[ ]

Calculation of Registration Fee

* * * * *

Note: * * * If the filing fee is calculated pursuant to Rule

457(o) under the Securities Act, only the title of the class of

securities to be registered, the proposed maximum aggregate offering

price for that class of securities and the amount of registration

fee need to appear in the ``Calculation of Registration FEE'' Table

(``Fee Table''). Where two or more classes of securities are being

registered pursuant to General Instruction II.D, however, the Fee

Table need only specify the maximum aggregate offering price for all

classes; the Fee Table need not specify by each class the proposed

maximum aggregate offering price (See General Instruction II.D). Any

difference between the dollar amount of securities registered for

such offerings and the dollar amount of securities sold may be

carried forward on a future registration statement pursuant to Rule

429 under the Securities Act.

General Instructions

* * * * *

IV. Registration of additional securities. With respect to the

registration of additional securities for an offering pursuant to

Rule 462(b) under the Securities Act, the registrant may file a

registration statement consisting only of the following: The facing

page; a statement that the contents of the earlier registration

statement, identified by file number, are incorporated by reference;

required opinions and consents; the signature page; and any price-

related information omitted from the earlier registration statement

in reliance on Rule 430A that the registrant chooses to include in

the new registration statement. The information contained in such a

Rule 462(b) registration statement shall be deemed to be a part of

the earlier registration statement as of the date of effectiveness

of the Rule 462(b) registration statement. Any opinion or consent

required in the Rule 462(b) registration statement may be

incorporated by reference from the earlier registration statement

with respect to the offering, if: (i) Such opinion or consent

expressly provides for such incorporation; and (ii) such opinion

relates to the securities registered pursuant to Rule 462(b). See

Rule 411(c) and Rule 439(b) under the Securities Act.

* * * * *

Sec. 239.18 [Amended]

42. By amending Form S-11 (referenced in Sec. 239.18) by adding

paragraph G. to General Instructions, by adding three check boxes to

the cover page immediately before ``Calculation of Registration Fee''

and by adding two sentences to the end of the Note following the

Calculation of Registration Fee table to read as follows:

Note: The text of Form S-11 does not and the amendments will not

appear in the Code of Federal Regulations.

Form S-11--For Registration Under the Securities Act of 1933 of

Securities of Certain Real Estate Companies

General Instructions

* * * * *

G. Registration of additional securities. With respect to the

registration of additional securities for an offering pursuant to

Rule 462(b) under the Securities Act, the registrant may file a

registration statement consisting only of the following: The facing

page; a statement that the contents of the earlier registration

statement, identified by file number, are incorporated by reference;

required opinions and consents; the signature page; and any price-

related information omitted from the earlier registration statement

in reliance on Rule 430A that the registrant chooses to include in

the new registration statement. The information contained in such a

Rule 462(b) registration statement shall be deemed to be a part of

the earlier registration statement as of the date of effectiveness

of the Rule 462(b) registration statement. Any opinion or consent

required in the rule 462(b) registration statement may be

incorporated by reference from the earlier registration statement

with respect to the offering, if: (i) Such opinion or consent

expressly provides for such incorporation; and (ii) such opinion

relates to the securities registered pursuant to Rule 462(b). See

Rule 411(c) and rule 439(b) under the Securities Act.

* * * * *

Form S-11--Registration Statement under the Securities Act of 1933

* * * * *

If this Form is filed to register additional securities for an

offering pursuant to Rule 462(b) under the Securities Act, please

check the following box and list the Securities Act registration

statement number of the earlier effective registration statement for

the same offering. [ ] ____________

If this Form is a post-effective amendment filed pursuant to

Rule 462(c) under the Securities Act, check the following box and

list the Securities Act registration statement number of the earlier

effective registration statement for the same offering. [ ]

____________

If delivery of the prospectus is expected to be made pursuant to

Rule 434, please check the following box. [ ]

* * * * *

Calculation of Registration Fee

* * * * *

Note: * * * If the filing fee is calculated pursuant to Rule

457(o) under the Securities Act, only the title of the class of

securities to be registered, the proposed maximum aggregate offering

price for that class of securities and the amount of registration

fee needed to appear in the Calculation of Registration Fee table.

Any difference between the dollar amount of securities registered

for such offerings and the dollar amount of securities sold may be

carried forward on a future registration statement pursuant to Rule

429 under the Securities Act.

* * * * *

Sec. 239.31 [Amended]

43. By amending Form F-1 (referenced in Sec. 239.31) by adding

three check boxes to the cover page immediately before ``Calculation of

Registration Fee,'' by adding two sentences to the end of the Note

following the Calculation of Registration Fee table, and by adding

paragraph V. to General Instructions to read as follows:

Note: The text of Form F-1 does not and the amendments will not

appear in the Code of Federal Regulations

Form F-1--Registration Statement under the Securities Act of 1933

* * * * *

If this Form is filed to register additional securities for an

offering pursuant to Rule 462(b) under the Securities Act, please

check [[Page 26621]] the following box and list the Securities Act

registration statement number of the earlier effective registration

statement for the same offering. [ ] ____________

If this Form is a post-effective amendment filed pursuant to

rule 462(c) under the Securities Act, check the following box and

list the Securities Act registration statement number of the earlier

effective registration statement for the same offering. [ ]

____________

If delivery of the prospectus is expected to be made pursuant to

Rule 434, please check the following box. [ ]

* * * * *

Calculation of Registration Fee

* * * * *

Note: * * * If the filing fee is calculated pursuant to Rule

457(o) under the Securities Act, only the title of the class of

securities to be registered, the proposed maximum aggregate offering

price for that class of securities and the amount of registration

fee need to appear in the Calculation of Registration Fee table. Any

difference between the dollar amount of securities registered for

such offerings and the dollar amount of securities sold may be

carried forward on a future registration statement pursuant to Rule

429 under the Securities Act.

General Instructions

* * * * *

V. Registration of additional securities. With respect to the

registration of additional securities for an offering pursuant to

Rule 462(b) under the Securities Act, the registrant may file a

registration statement consisting only of the following: The facing

page; a statement that the contents of the earlier registration

statement, identified by file number, are incorporated by reference;

required opinions and consents; the signature page; and any price-

related information omitted from the earlier registration statement

in reliance on Rule 430A that the registrant chooses to include in

the new registration statement. The information contained in such a

Rule 462(b) registration statement shall be deemed to be a part of

the earlier registration statement as of the date of effectiveness

of the Rule 462(b) registration statement. Any opinion or consent

required in the rule 462(b) registration statement may be

incorporated by reference from the earlier registration statement

with respect to the offering, if: (i) such opinion or consent

expressly provides for such incorporation; and (ii) such opinion

relates to the securities registered pursuant to Rule 462(b). See

Rule 411(c) and Rule 439(b) under the Securities Act.

* * * * *

44. By amending Form F-2 (referenced in Sec. 239.32) by adding

three check boxes to the cover page immediately before ``Calculation of

Registration Fee,'' by adding two sentences to the end of the Note

following the Calculation of Registration Fee table, and by adding

paragraph IV. to General Instructions to read as follows:

Note: The text of Form F-2 does not and the amendments will not

appear in the Code of Federal Regulations.

Form F-2--Registration Statement under the Securities Act of 1933

* * * * *

If this Form is filed to register additional securities for an

offering pursuant to Rule 462(b) under the Securities Act, please

check the following box and list the Securities Act registration

statement number of the earlier effective registration statement for

the same offering. [ ] ____________

If this Form is a post-effective amendment filed pursuant to

Rule 462(c) under the Securities Act, check the following box and

list the Securities Act registration statement number of the earlier

effective registration statement for the same offering. [ ]

____________

If delivery of the prospectus is expected to be made pursuant to

Rule 434, please check the following box. [ ]

* * * * *

Calculation of Registration Fee

* * * * *

Note: * * * If the filing fee is calculated pursuant to Rule

457(o) under the Securities Act, only the title of the class of

securities to be registered, the proposed maximum aggregate offering

price for that class of securities and the amount of registration

fee need to appear in the Calculation of Registration Fee table. Any

difference between the dollar amount of securities registered for

such offerings and the dollar amount of securities sold may be

carried forward on a future registration statement pursuant to Rule

429 under the Securities Act.

General Instructions

* * * * *

IV. Registration of additional securities. With respect to the

registration of additional securities for an offering pursuant to

Rule 462(b) under the Securities Act, the registrant may file a

registration statement consisting only of the following: The facing

page; a statement that the contents of the earlier registration

statement, identified by file number, are incorporated by reference;

required opinions and consents; the signature page; and any price-

related information omitted from the earlier registration statement

in reliance on Rule 430A that the registrant chooses to include in

the new registration statement. The information contained in such a

Rule 462(b) registration statement shall be deemed to be a part of

the earlier registration statement as of the date of effectiveness

of the Rule 462(b) registration statement. Any opinion or consent

required in the Rule 462(b) registration statement may be

incorporated by reference from the earlier registration statement

with respect to the offering, if: (i) Such opinion or consent

expressly provides for such incorporation; and (ii) such opinion

relates to the securities registered pursuant to Rule 462(b). See

Rule 411(c) and Rule 439(b) under the Securities Act.

* * * * *

45. By amending Form F-3 (referenced in Sec. 239.33) by adding

three check boxes to the cover page immediately before ``Calculation of

Registration Fee,'' by adding three sentences to the end of the Note

following the Calculation of Registration Fee table, and by adding

paragraph IV. to General Instructions to read as follows:

Note: The text of Form F-3 does not and the amendments will not

appear in the Code of Federal Regulations.

Form F-3--Registration Statement Under the Securities Act of 1933

* * * * *

if this Form is filed to register additional securities for an

offering pursuant to Rule 462(b) under the Securities Act, please

check the following box and list the Securities Act registration

statement number of the earlier effective registration statement for

the same offering. [ ] ____________

If this Form is a post-effective amendment filed pursuant to

Rule 462(c) under the Securities Act, check the following box and

list the Securities Act registration statement number of the earlier

effective registration statement for the same offering.[ ]

______________

If delivery of the prospectus is expected to be made pursuant to

Rule 434, please check the following box. [ ]

* * * * *

Calculation of Registration Fee

* * * * *

Note: * * * If the filing fee is calculated pursuant to Rule

457(o) under the Securities Act, only the title of the class of

securities to be registered, the proposed maximum aggregate offering

price for that class of securities and the amount of registration

fee need to appear in the ``Calculation of Registration Fee'' table

(``Fee Table''). Where two or more classes of securities are being

registered pursuant to General Instruction II.C, however, the Fee

Table need only specify the maximum aggregate offering price for all

classes; the Fee Table need not specify by each class the proposed

maximum aggregate offering price (See General Instruction II.C). Any

difference between the dollar amount of securities registered for

such offerings and the dollar amount of securities sold may be

carried forward on a future registration statement pursuant to Rule

429 under the Securities Act.

General Instructions

* * * * *

IV. Registration of additional securities. With respect to the

registration of additional securities for an offering pursuant to

Rule 462(b) under the Securities Act, the registrant may file a

registration statement consisting only of the following: The facing

page; a statement that the contents of the earlier registration

statement, identified by file number, are incorporated by reference;

required opinions and consents; the signature page; and any price-

related information omitted from the earlier registration statement

in reliance on Rule 430A that the [[Page 26622]] registrant chooses

to include in the new registration statement. The information

contained in such a Rule 462(b) registration statement shall be

deemed to be a part of the earlier registration statement as of the

date of effectiveness of the Rule 462(b) registration statement. Any

opinion or consent required in the Rule 462(b) registration

statement may be incorporated by reference from the earlier

registration statement with respect to the offering, if: (i) Such

opinion or consent expressly provides for such incorporation; and

(ii) such opinion relates to the securities registered pursuant to

Rule 462(b). See Rule 411(c) and Rule 439(b) under the Securities

Act.

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

1934

46. The authority citation for Part 240 continues to read in part

as follows:

Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77eee, 77ggg,

77nnn, 77sss, 777ttt, 78c, 78d, 78i, 78j, 78l, 78m, 78n, 78o, 78p,

78q, 78s, 78w, 78x, 78ll(d), 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-

37, 80b-3, 80b-4 and 80b-11, unless otherwise noted.

* * * * *

47. The authority citation following Sec. 15c2-8 is removed.

48. By amending Sec. 240.12b-11 to add paragraph (d) to read as

follows:

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

* * * * *

(d) Duplicated or facsimile versions of manual signatures of

persons required to sign any registration statement pursuant to

sections 12(b) and 12(g) of the Act (15 U.S.C. 78l(b) and 78l(g)), any

report or schedule filed pursuant to sections 13 and 15(d) of the Act

(15 U.S.C. 78m and 78o(d)), or any amendment or exhibit to such

registration statement, report or schedule, that are filed or submitted

to the Commission under the Act, shall be considered manual signatures

for purposes of the Act and rules and regulations thereunder; provided

that, the original signed document is retained by the filer for a

period of five years and, upon request, the filer furnishes to the

Commission or the staff the original manually signed document.

49. By amending Sec. 240.14d-1 to add paragraph (d) to read as

follows:

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

and 14E.

* * * * *

(d) Duplicated or facsimile versions of manual signatures of

persons required to sign any document pursuant to Regulation 14D and

Regulation 14E that is filed or submitted to the Commission under the

Act shall be considered manual signatures for purposes of the Act and

rules and regulations thereunder; provided that, the original signed

document is retained by the filer for a period of five years and, upon

request, the filer furnishes to the Commission or the staff the

original manually signed document.

50. Section 240.15c2-8(b) is amended by revising the word

``mailing'' to read ``sending''.

51 Section 240.15c2-8(c) is amended by revising the word ``mail''

to read ``send''.

52. Section 240.15c2-8(d) is amended by revising the word ``mail''

to read ``send''.

53. Section 240.15c2-8 is amended by adding paragraph (j) to read

as follows:

Sec. 240.15c2-8 Delivery of Prospectus

* * * * *

(j) For purposes of this section, the term preliminary prospectus

shall include the term prospectus subject to completion as used in 17

CFR 230.434(a), and the term final prospectus shall include the term

Section 10(a) prospectus as used in 17 CFR 230.434(a).

54. Amend Sec. 240.15c6-1 by revising the phrase ``paragraph (b)''

in paragraph (a) to read ``paragraphs (b), (c), and (d)''; by revising

the phrase ``Paragraph (a)'' in paragraph (b) to read ``Paragraphs (a)

and (c)''; by removing paragraph (b)(2); by redesignating paragraph

(b)(3) as paragraph (b)(2); and by adding paragraphs (c) and (d) to

read as follows:

Sec. 240.15c6-1 Settlement cycle.

* * * * *

(c) Paragraph (a) of this section shall not apply to contracts for

the sale for cash of securities that are priced after 4:30 p.m. Eastern

time on the date such securities are priced and that are sold by an

issuer to an underwriter pursuant to a firm commitment underwritten

offering registered under the Securities Act of 1933 or sold to an

initial purchaser by a broker-dealer participating in such offering

provided that a broker or dealer shall not effect or enter into a

contract for the purchase or sale of such securities that provides for

payment of funds and delivery of securities later than the fourth

business day after the date of the contract unless otherwise expressly

agreed to by the parties at the time of the transaction.

(d) For purposes of paragraphs (a) and (c) of this section, the

parties to a contract shall be deemed to have expressly agreed to an

alternate date for payment of funds and delivery of securities at the

time of the transaction for a contract for the sale for cash of

securities pursuant to a firm commitment offering if the managing

underwriter and the issuer have agreed to such date for all securities

sold pursuant to such offering and the parties to the contract have not

expressly agreed to another date for payment of funds and delivery of

securities at the time of the transaction.

55. By amending Sec. 240.16a-3 to add paragraph (i) to read as

follows:

Sec. 240.16a-3 Reporting transactions and holdings.

* * * * *

(i) Duplicated or facsimile versions of manual signatures of

persons required to sign any document pursuant to Section 16 of the Act

(15 U.S.C. 78p) that is filed or submitted to the Commission under the

Act shall be considered manual signatures for purposes of the Act and

rules and regulations thereunder; provided that, the original signed

document is retained by the filer for a period of five years and, upon

request, the filer furnishes to the Commission or the staff the

original manually signed document.

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

1940

56. The authority citation for Part 270 continues to read, in part

as follows:

Authority: 15 U.S.C. 80a-1 et seq., 80a-37, 80a-39 unless

otherwise noted.

* * * * *

57. By amending Sec. 270.8b-11 to add paragraph (e) to read as

follows:

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

* * * * *

(e) Duplicated or facsimile versions of manual signatures of

persons required to sign any registration statement or report,

including all amendments and exhibits to such statements or reports,

that are filed or submitted to the Commission under the Act, shall be

considered manual signatures for the purposes of the Act and the rules

and regulations thereunder; provided that, the original signed document

is retained by the filer for a period of five years and, upon request,

the filer furnishes to the Commission or the staff the original

manually signed document.

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

PART 274--FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 1940

58. The authority citation for part 274 continues to read as

follows:

[[Page 26623]] Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s,

78c(b), 78l, 78m, 78n, 78o(d), 80a-8, 80a-24, and 80a-29, unless

otherwise noted.

Secs. 239.14 and 274.11a-1 [Amended]

59. By amending Form N-2 (referenced in Secs. 239.14 and 274.11a-1)

by adding one check box to the cover page immediately before

``Calculation of Registration Fee Under the Securities Act of 1933,''

and by adding two sentences to the end of the first Instruction

following the Calculation of Registration Fee Under the Securities Act

of 1933 table and by adding paragraph J. to the General Instructions to

read as follows:

Note: The text of Form N-2 does not and these amendments will

not appear in the Code of Federal Regulations.

Form N-2--Registration Statement Under the Securities Act of 1933

* * * * *

[ ] This Form is filed to register additional securities for an

offering pursuant to Rule 462(b) under the Securities Act and the

Securities Act registration statement number of the earlier

effective registration statement for the same offering is

____________ .

Calculation of Registration Fee Under the Securities Act of 1933

* * * * *

Instructions

* * * For offerings made pursuant to Rule 430A under the

Securities Act, only the title of the class of securities to be

registered, the proposed maximum aggregate offering price for that

class of securities and the amount of registration fee need to

appear in the Calculation of Registration Fee table. Any difference

between the dollar amount of securities registered for such

offerings and the dollar amount of securities sold may be carried

forward on a future registration statement pursuant to Rule 429

under the Securities Act.

General Instructions

* * * * *

J. Registration additional securities. With respect to the

registration of additional securities for an offering pursuant to

Rule 462(b) under the Securities Act, the registrant may file a

registration statement consisting only of the following: The facing

page; a statement that the contents of the earlier registration

statement, identified by file number, are incorporated by reference;

required opinions and consents; the signature page; and any price-

related information omitted from the earlier registration statement

in reliance on Rule 430A that the registrant chooses to include in

the new registration statement. Any opinion or consent required in

such a registration statement may be incorporated by reference from

the earlier registration statement with respect to the offering, if:

(i) Such opinion or consent expressly provides for such

incorporation; and (ii) such opinion relates to the securities

registered pursuant to Rule 462(b). See Rule 411(c) and Rule 483(c)

under the Securities Act.

* * * * *

Dated: May 11, 1995.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95-12007 Filed 5-16-95; 8:45 am]

BILLING CODE 8010-01-M