Amendments to Beneficial Ownership Reporting Requirements

SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 240

[Release No. 34-37403; File No. S7-16-96; International Series--1001]

RIN 3235-AG81

Amendments to Beneficial Ownership Reporting Requirements

AGENCY: Securities and Exchange Commission.

ACTION: Reproposed rules.

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SUMMARY: In accordance with a recent recommendation of the Report of

the Task Force on Disclosure Simplification published March 5, 1996,

the Securities and Exchange Commission (``Commission'') today is

publishing for comment a proposal to amend the rules relating to the

reporting of beneficial ownership in publicly-held companies. Similar

amendments were proposed in 1989 but were not acted upon by the

Commission. These reproposals would make Schedule 13G available, in

lieu of Schedule 13D, to all investors beneficially owning less than 20

percent of the outstanding class that have not acquired or held the

securities for the purpose of and do not have the effect of changing or

influencing the control of the issuer of the securities. The purposes

of the reproposals are to improve the effectiveness of the beneficial

ownership reporting scheme and to reduce the reporting obligations of

passive investors.

DATES: Comments should be received on or before September 9, 1996.

ADDRESSES: Comments should be submitted in triplicate to Jonathan G.

Katz, Secretary, U.S. Securities and Exchange Commission, 450 Fifth

Street, N.W., Washington, D.C. 20549. Comments may also be submitted

electronically at the following e-mail address: [email protected].

Comment letters should refer to File No. S7-16-96; this file number

should be

[[Page 36522]]

included on the subject line if e-mail is used. All comments received

will be available for public inspection and copying in the Commission's

public reference room at the same address. Electronically submitted

comments will be posted on the Commission's Internet web site (http://

www.sec.gov).

FOR FURTHER INFORMATION CONTACT: Dennis O. Garris, Special Counsel,

Office of Mergers and Acquisitions, Division of Corporation Finance,

Securities and Exchange Commission at (202) 942-2920, 450 Fifth Street

N.W., Washington, D.C. 20549.

SUPPLEMENTARY INFORMATION: The Commission is reproposing for comment

amendments to Regulation 13D-G 1 and Schedules 13D and 13G.

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\1\ Rules 13d-1, 13d-2, and 13d-7 [17 CFR 240.13d-1, 240.13d-2,

and 240.13d-7].

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I. Background and Overview

A. Current Regulatory Scheme

The beneficial ownership reporting requirements embodied in

Sections 13(d) 2 and 13(g) 3 of the Securities Exchange Act

of 1934 (``Exchange Act'') 4 and the regulations adopted

thereunder 5 are intended to provide investors and the subject

issuer with information about accumulations of securities that may have

the potential to change or influence control of the issuer. The

statutory and regulatory framework also establishes a comprehensive

reporting system for gathering and disseminating information about the

ownership of equity securities.6 These provisions require, subject

to exceptions, that any person who acquires beneficial ownership of

more than five percent of a class of equity securities registered under

Section 12 of the Exchange Act 7 and other specified equity

securities (collectively, ``subject securities'') report such

acquisition on Schedule 13D within 10 calendar days. That report must

be amended promptly to report any material change in the information

provided, including any acquisition or disposition of one percent or

more of the class.8 Persons holding more than five percent of a

class of subject securities at the end of the calendar year, but who

have not made an acquisition subject to Section 13(d) (``Exempt

Investors''),9 are required instead to file and amend a short-form

Schedule 13G within 45 days after the close of the calendar year. The

Schedule 13G and amendments need only report securities that are

beneficially owned as of the last day of the year.

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\2\ 15 U.S.C. 78m(d).

\3\ 15 U.S.C. 78m(g).

\4\ 15 U.S.C. 78a et seq.

\5\ Regulation 13D-G, Rules 13d-1 through 13d-7 [17 CFR 240.13d-

1 through 240.13d-7].

\6\ For a more extensive discussion of Sections 13(d) and 13(g),

and Regulation 13D-G adopted to implement both statutory provisions,

see Securities Exchange Act Release No. 26598 (March 8, 1989) [54 FR

10552] (``Proposing Release'').

\7\ 15 U.S.C. 781.

\8\ Rule 13d-2(a).

\9\ Persons who acquire all their securities prior to the issuer

registering under the Exchange Act are not subject to Section 13(d),

and persons who acquire not more than two percent of a class of

subject securities within a 12-month period are exempted from

Section 13(d) by Section 13(d)(6)(B), but in both cases are subject

to Section 13(g). Section 13(d)(6)(A) exempts acquisitions of

subject securities acquired in a stock-for-stock exchange which is

registered under the Securities Act of 1933.

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Schedule 13G is also available to specified institutional investors

(``Qualified Institutional Investors'') 10 that acquired or hold

the securities in the ordinary course of business and without a purpose

or effect or in connection with a transaction having a purpose or

effect, of changing or influencing control of the issuer. These

Qualified Institutional Investors likewise only report their greater

than five percent positions held as of the close of the year either in

an initial report or amendment in the case of any change in the

information provided, except if they own more than 10 percent as of the

close of any month, in which case a Schedule 13G must be filed or

amended within 10 calendar days reporting the holdings as of the close

of the month.11 These flexible reporting requirements are designed

to minimize the costs of monitoring positions in securities acquired in

the ordinary course of the investor's business.

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\10\ Such specified institutional investors include a broker or

dealer registered under Section 15(b) of the Exchange Act [15 U.S.C.

78o(b)], a bank as defined in Section 3(a)(6) of the Exchange Act

[15 U.S.C. 78c(a)(6)], an insurance company as defined in Section

3(a)(19) of the Exchange Act [15 U.S.C. 78c(a)(19)], an investment

company registered under Section 8 of the Investment Company Act of

1940 [15 U.S.C. 80a-8], an investment adviser registered under

Section 203 of the Investment Advisers Act of 1940 [15 U.S.C. 80b-1

et seq.], an employee benefit plan or pension fund that is subject

to the provisions of the Employee Retirement Income Security Act of

1974 [codified principally in 29 U.S.C. 1001-1461], and related

holding companies and groups (collectively, ``institutional

investors''). Rule 13d-1(b)(1)(ii) [17 CFR 240.13d-1(b)(1)(ii)].

\11\ Rule 13d-1(b)(2).

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B. Proposals for Reform

In 1989, the Commission proposed amendments to Regulation 13D-G to

improve the effectiveness of the reporting scheme and to lessen the

compliance costs to investors that have not acquired or held the

securities with the purpose or effect of changing or influencing the

control of the issuer.12 The 1989 proposed amendments were not

acted upon by the Commission. The amendments proposed today are similar

to the 1989 proposals except, as more fully discussed below, the

Commission is not reproposing a limitation on the amount of securities

that a Qualified Institutional Investor can report on Schedule 13G and

the Commission is proposing that the new class of persons that would be

eligible to use Schedule 13G would have the same amendment requirements

that currently apply to Schedule 13D filings, as opposed to the more

liberal amendment requirements currently applicable to Schedule 13G.

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\12\ Exchange Act Release No. 26598 (March 8, 1989) [54 FR

10552]. The Commission received fifteen comment letters which are

available for public inspection and copying at the Commission's

Public Reference Room in Washington, D.C. (File No. S7-8-89).

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The current reporting scheme requires most persons other than

institutions to file detailed disclosure reports regardless of the

reasons for the acquisition. As a result, the current reporting scheme

may place unnecessary disclosure burdens on persons whose acquisitions

do not implicate the Williams Act's concern with transactions affecting

the control of issuers. To further the Commission's goals of disclosure

simplification and efficiency, as stated in the Report of the Task

Force on Disclosure Simplification published March 5, 1996, the

amendments are being reproposed at this time to improve the

effectiveness of the beneficial ownership reporting scheme and to

reduce the reporting obligations of all investors that acquire or hold

the securities without the purpose or the effect of changing or

influencing control of the issuer by permitting them for the first time

to report on Schedule 13G. Since the Commission first proposed to

exempt investors that do not have a disqualifying purpose or effect

from the Schedule 13D filing requirements, initial Schedule 13D filings

have increased from 2,850 in fiscal 1988 to 3,347 in fiscal 1995, a 17

percent increase. Data provided by the Commission's Office of Economic

Analysis indicates that 76 percent of the Schedules 13D studied by that

office did not disclose a purpose or effect of changing or influencing

control of the issuer and, therefore, would benefit from the amendments

proposed today.13 The reduced number of Schedule 13D filings would

allow the marketplace, as well as the staff of the Commission, to focus

more quickly on acquisitions

[[Page 36523]]

involving the potential to change or influence control.

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\13\ The sample included 110 Schedules 13D filed from November

10, 1994 to December 30, 1994.

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Accordingly, in addition to the two existing categories of Schedule

13G filers (Qualified Institutional Investors and Exempt Investors), a

third category (``Passive Investors'') 14 would be created,

significantly expanding the classes of persons eligible to file on the

short form. Any person who acquires or holds more than five percent of

a class of subject securities and does not have a disqualifying purpose

or effect would be permitted to file a short-form report on Schedule

13G within 10 calendar days after the acquisition, rather than the

long-form report on Schedule 13D.15 A Qualified Institutional

Investor would remain eligible to file a short-form report on Schedule

13G 45 days after the year's end, provided that the requirements of

amended Rule 13d-1(b)(1) are satisfied. Exempt Investors would continue

to file their initial Schedule 13G within 45 calendar days after the

calendar year in which they became subject to Section 13(g) and Rule

13d-1(c).

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\14\ The term ``Passive Investors'' is used in this release to

refer to shareholders beneficially owning more than five percent of

the class of subject securities and who can certify that the subject

securities were not acquired or held for the purpose of and do not

have the effect of changing or influencing the control of the issuer

of such securities and were not acquired in connection with or as a

participant in any transaction having such purpose or effect. See

proposed Rule 13d-1(b)(2) and revised Item 10 of Schedule 13G.

Shareholders that are unable to certify to this effect are

considered to have, for purposes of this release, a ``disqualifying

purpose or effect''.

\15\ Schedule 13D requires more disclosure than Schedule 13G.

The following are the primary disclosures required by Schedule 13D

that are not required by Schedule 13G: (i) the source and amount of

funds used to purchase the securities; (ii) the purpose of the

acquisition of the securities and any plans or proposals that the

reporting person has involving the issuer including, among other

things, extraordinary transactions and changes of control; (iii) a

description of transactions in the securities reported on in the

sixty days prior to the filing of the schedule; (iv) a description

of any contracts or arrangements involving the securities of the

issuer; and, (v) a requirement to file copies of any written

contracts or arrangements described in the Schedule 13D as exhibits

to the schedule.

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The rule amendments would subject Passive Investors filing Schedule

13G in lieu of Schedule 13D to the same amendment requirements that

currently apply to Schedule 13D. Additionally, Passive Investors would

be subject to a proposed 20 percent limit on the amount of an issuer's

securities that may be reported on Schedule 13G and would be required

to file a Schedule 13D within 10 calendar days of acquiring 20 percent

or more of the securities. Upon acquiring 20 percent or more, the

investor would be prohibited from acquiring additional securities or

from voting or directing the voting of the securities until filing that

schedule (a ``standstill period''). The Commission is not reproposing a

percentage limit to reporting on Schedule 13G for Qualified

Institutional Investors.

Under the proposed amendments, Passive Investors that are no longer

able to certify that they did not acquire or do not hold with a

disqualifying purpose or effect would be required to file a Schedule

13D within 10 calendar days of the change in purpose. An investor

required to file a Schedule 13D because it has changed its investment

purpose would be subject to a waiting period (``cooling-off period'')

from the time of the change in investment purpose until the expiration

of the tenth calendar day from the date of the filing of a Schedule

13D, during which time such person could not vote or direct the voting

of the subject securities, or acquire an additional beneficial

ownership interest in any securities either of the issuer or of any

person controlling the issuer.

In 1992 the Commission revised the proxy rules to exempt certain

communications from the proxy regulation and disclosure requirements.

The 1992 proxy rule amendments were justified in part because Section

13(d) would continue to require disclosure of concerted activities by

and among groups of significant shareholders regarding voting

matters.16 Following the 1992 proxy reform, some commentators have

continued to express the concern that Section 13(d) has a potential

chilling effect on a shareholder's ability to take full advantage of

the proxy rule exemptions, since actions taken pursuant to the proxy

exemptions may be interpreted to be inconsistent with the

certifications necessary for Qualified Institutional Investors to file

on Schedule 13G or such actions may lead to a finding of a ``group''

under Rule 13d-5(b)(1).17 Comment is requested as to whether

Section 13(d) reporting obligations restrict a shareholder's ability to

use the proxy rule exemptions and whether relief, in addition to that

proposed today, from Schedule 13D filing obligations with respect to

soliciting activities is necessary and appropriate.

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\16\ See Exchange Act Release No. 31326, Section I (October 16,

1992) [57 FR 48276]; testimony of Richard C. Breeden, Chairman of

the Securities and Exchange Commission, before the Subcommittee on

Securities of the Committee on Banking, Housing, and Urban Affairs,

United States Senate (October 17, 1991).

\17\ In April 1994, the Council of Institutional Investors

submitted a rulemaking petition to allow institutions that incur a

Schedule 13D filing obligation as a result of exempt soliciting

activities to report their beneficial ownership on a short form

instead. The petition requested relief from Section 13(d) filing

obligations for Schedule 13G eligible shareholders participating in

communications covered by the two principal exemptions from the

proxy rules. Under the petition, persons engaged in exempt

solicitations would only be required to file a new short form

disclosure statement and they would not lose their Schedule 13G

eligibility. The petition is available for inspection and copying at

the Commission's Public Reference Room in Washington, D.C. (File 4-

372).

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Finally, the Commission is proposing amendments to the schedules

and technical amendments to the beneficial ownership rules along with

additional related and clarifying amendments.

II. Proposed Amendments to Regulation 13D-G

A. Expansion of the Class of Investors Eligible to Report on Schedule

13G

The Commission is reproposing that Regulation 13D-G be amended to

permit Passive Investors to use the short-form Schedule 13G.18

Passive Investors would file the Schedule within 10 calendar days after

acquiring beneficially more than five percent of a class of subject

securities. Persons unable or unwilling to certify that they do not

have a disqualifying purpose or effect because, for example, the

possibility exists that they may seek to exercise or influence control,

would be ineligible to file a Schedule 13G and would be required to

file a Schedule 13D. The comment letters on the 1989 proposals

reflected significant consensus supporting the Commission's expansion

of the eligible class of Schedule 13G filers.19

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\18\ Proposed Rule 13d-1(b)(2).

\19\ Of the 15 comment letters received by the Commission on the

proposals, 13 commenters generally supported the expansion and two

commenters opposed the expansion.

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The Commission is reproposing that Passive Investors be allowed to

choose whether to report on Schedule 13G or Schedule 13D.20 The

Commission preliminarily believes that Passive Investors should be

given the flexibility to determine which Schedule is most appropriate

given their circumstances. The fact that an investor can represent

[[Page 36524]]

that it does not have a disqualifying purpose or effect but still

chooses to file on a Schedule 13D may provide important information

concerning the filing person's intent. Accordingly, the Commission is

reproposing that the use of Schedule 13G, in lieu of Schedule 13D,

remain optional for those persons eligible to use Schedule 13G.

However, the Commission requests comment as to the appropriateness of

this approach and whether Schedule 13G eligible persons would choose to

file on Schedule 13D to avoid the cooling-off period upon a change in

investment purpose. Comment is also requested as to whether a mandatory

filing approach would better serve the market by allowing investors to

focus on those acquisitions that presently represent an attempt to

influence or change control of the issuer.

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\20\ In the 1989 Proposing Release the Commission requested

comment upon whether reporting on a Schedule 13G (as opposed to

Schedule 13D) should be permissive or mandatory for investors that

do not have a disqualifying purpose or effect. Commenters opposing a

mandatory filing requirement suggested that the detailed disclosures

contained in a Schedule 13D may be more appropriate in situations

where the investor's purpose or effect may abruptly change to a

disqualifying purpose or effect and, accordingly, the use of the

Schedule 13D, in lieu of the Schedule 13G, should be optional.

Commenters supporting mandatory use of Schedule 13G believed that

such a requirement would enhance the marketplace's ability to focus

on those acquisitions representing a disqualifying purpose or effect

and would deter Schedule 13G eligible filers from filing on Schedule

13D in order to avoid the cooling-off period upon a change in

purpose or effect.

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B. Filing Periods for Passive Investors Filing on Schedule 13G

As reproposed, Passive Investors choosing to file a Schedule 13G

would file the schedule within 10 calendar days of crossing the five

percent threshold. Requiring the filing within 10 days, rather than the

45 days following year end currently applicable to Schedule 13G filers,

would provide more timely notice to the market and shareholders of the

existence of voting blocks that have the potential of affecting control

of the issuer.

Under the proposed rules, however, Passive Investors filing on

Schedule 13G would still be subject to the same amendment requirements

currently applicable to Schedule 13D.21 This approach differs from

the 1989 proposals, which proposed that Passive Investors filing on

Schedule 13G be subject merely to the more liberal amendment

requirements currently applicable to Qualified Institutional Investors

filing on Schedule 13G.22 One commenter on the 1989 proposals

expressed the concern that the 1989 proposals would not have required

timely disclosure of material changes, including increases in ownership

of the issuer's securities. For example, under the 1989 proposals, a

Passive Investor would only have been required to file an amendment to

the Schedule 13G to disclose an acquisition of ownership in excess of

10 percent of such securities within 10 days after the end of the month

in which the person's ownership exceeded 10 percent of the class as of

the end of the month. The Commission preliminarily believes that,

although Passive Investors do not have a disqualifying purpose or

effect, the market may benefit from more timely notice of material

changes in ownership and material changes in the information previously

reported by such persons.

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\21\ Rule 13d-2(a) requires that an amendment to Schedule 13D be

filed promptly upon any material change in the facts set forth in

the schedule, including any material increase or decrease in the

percentage of the class beneficially owned. Acquisitions or

dispositions of one percent or more of the class are deemed to be

``material'' for the purposes of this rule. Acquisitions or

dispositions of less than one percent of the class may be material

depending upon the facts and circumstances.

\22\ Under Rule 13d-2(b) an amendment to the Schedule 13G would

be due 45 calendar days after the close of the year to report only

any change that occurred in the information previously reported on

Schedule 13G as of the last day of the year. However, under Rule

13d-1(b)(2) if their beneficial ownership exceeds 10 percent of the

class at the end of any month, an amendment would be required to be

filed within 10 days after the end of that month, as well as within

10 days after the end of any month in which their ownership

increases or decreases by more than five percent of such class.

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In addition, by providing that the market will receive notice of

material changes in the amount beneficially owned by persons filing

under this new category of ``Passive Investors'', there is less of an

incentive for those who may ultimately have a control intent to use

Schedule 13G for the purpose of being able to acquire, for example, up

to 9.9 percent of an issuer's stock without ever triggering any

reporting requirement or disclosure to the market other than, perhaps,

a prior filing of a five percent ownership interest. Likewise, without

this amendment requirement a Passive Investor could increase a

securities holding from just over 10 percent to just under 20 percent

without any reporting or disclosure to the market until 10 days after

the end of the month in which the 15 percent threshold was crossed. In

the past, stock accumulation programs have taken advantage of the

current statutory ``window'' in the Section 13(d) reporting regime.

Comment is requested as to whether providing for current Schedule 13G

amendment procedures as opposed to the more stringent Schedule 13D

amendment procedures, for persons who qualify as Passive Investors,

would exacerbate that problem, thereby decreasing investor protection

and the availability of timely information provided to the market.

Comment is requested as to whether it is necessary to require that

Passive Investors filing on Schedule 13G be subject to the more

stringent amendment requirements currently applicable to Schedule 13D.

Would more frequent amendments by Passive Investors provide

sufficiently useful information to investors, the market and issuers to

justify the filing burden on Passive Investors? Would the proposed

standstill 23 and cooling-off 24 provisions provide

sufficient protection from the abuse noted if the more lenient

amendment requirements were adopted? If so, please explain.

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\23\ Under the proposed rules, Passive Investors would be

required to file a Schedule 13D within 10 days of the date their

beneficial ownership equals or exceeds 20 percent of the class and

would, upon such acquisition, be subject to a standstill period

during which they could not vote their shares or acquire additional

shares of the class until the Schedule 13D is filed. See Section

II.D. infra.

\24\ Under the proposed rules, if a Passive Investor develops a

disqualifying purpose or effect, the investor would be subject to a

cooling-off period until 10 days after the filing of a Schedule 13D

during which period they could not vote their shares or acquire

additional securities. See Section II.C. infra.

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Alternatively, would it be more appropriate to require Passive

Investors to file an annual amendment for any material change in the

information previously reported (like a Qualified Institutional

Investor) but also file an amendment promptly upon acquiring 10 percent

or more? Thereafter, the Passive Investor would promptly report any

change in position of five percent or more (rather than, as with

Qualified Institutional Investors, only five percent changes in

position as of the last day of the month and amending within 10 days

thereafter).25 Should crossing each of these thresholds trigger a

requirement that the Passive Investor cease voting and acquiring

additional securities until the amendment is filed? Would that have any

deterrent effect to the use of Schedule 13G where substantial

acquisitions are planned? Conversely, does the proposed requirement to

report promptly any material changes in position render the proposed 20

percent limitation on the use of Schedule 13G by Passive Investors and

accompanying standstill period unnecessary? The Commission is

considering for adoption each of these combinations of amendment

requirements, cooling-off periods, and standstill periods.

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\25\ One commenter on the 1989 proposals suggested requiring an

amendment at two percent intervals.

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The rules would continue to permit Qualified Institutional

Investors to file the Schedule 13G within 45 days after calendar year

end and without being subject to a 20 percent limitation on their

holdings. Qualified Institutional Investors would continue to be

required to certify that the subject securities were acquired in the

ordinary course of business and not with the purpose nor with the

effect of changing or influencing the control of the issuer.26

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Even where an institutional investor is unable to make the ``ordinary

course of business'' certification 27 it would still be permitted

to file on Schedule 13G under the Passive Investor provision so long as

it does not have a disqualifying purpose or effect. The Passive

Investor provision, however, would require both types of investors,

institutional and non-institutional, to file the Schedule 13G within 10

calendar days of the acquisition. Furthermore, such institutions would

be required to file an amendment to their Schedule 13G within 10

calendar days of that change in status to disclose the change.28

Comment is requested as to whether such institutional investors should

be subject to a standstill period until the filing of the Schedule 13G

amendment. Likewise, an institution unable to make the ``ordinary

course of business'' certification would also be subject to the 20

percent limitation.

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\26\ The Commission proposes to revise the certification on the

Schedule 13G for Qualified Institutional Investors to provide that

such investors certify that the securities were acquired and held in

the ordinary course of business and were not acquired or held for

the purpose of and do not have the effect of changing or influencing

the control of the issuer of such securities and were not acquired

or held in connection with or as a participant in any transaction

having such purpose or effect (emphasis added). This proposed

amendment to the certification is to conform the language of the

certification to proposed Rule 13d-1(b)(4)(i)(A).

\27\ In 1989, the Commission requested comment on the

appropriateness of continuing to require the ordinary course of

business certification. The sole commenter expressing a view on this

matter stated that the ordinary course of business requirement is

unnecessary when institutional investors acquire subject securities

for passive purposes.

Congress recognized that the Section 13(d) statutory framework

could have a significant impact on the reporting obligations of

certain institutional investors and professionals in the securities

business. Because such persons often acquire securities in the

ordinary course of business and not with a view toward influencing

control, in 1970 Congress specifically provided in Section 13(d)(5)

that the Commission could permit the filing of a short form

acquisition notice upon the determination that the securities were

acquired in the ordinary course of business. Although the Commission

proposes to eliminate that requirement for Passive Investors relying

on proposed Rule 13d-1(b)(2), the certification in its present form

will be retained with respect to institutions relying on the more

liberal filing requirement under Rule 13d-1(b)(1). As a result,

institutions would only have to report beneficial ownership of

equity securities acquired and held in the ordinary course of

business to the extent they owned more than five percent of the

class at year end (or more than 10 percent at the end of any month).

Proposed Rules 13d-1(b)(1) and (3).

\28\ Proposed Rule 13d-1(b)(6)(ii).

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In addition, as reproposed, all Exempt Investors would continue to

be able to file Schedule 13G within 45 days after the close of the

calendar year, and would not be subject to the 20 percent

limitation.29 The exempt holdings do not appear to present a

potential for affecting control of the issuer that should require

earlier notice to the market and shareholders.

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\29\ Proposed Rule 13d-1(c).

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C. 13D Filing Requirement and Cooling-Off Period for Changes in

Investment Purpose or Effect

As reproposed, Qualified Institutional Investors and Passive

Investors that can no longer certify that they do not hold with a

disqualifying purpose or effect must file a Schedule 13D no later than

10 calendar days after the change in investment purpose.30 A

``cooling-off'' period would commence at the time the reporting person

determines that it holds the subject securities with a disqualifying

purpose or effect until the expiration of the tenth calendar day from

the date of the filing of a Schedule 13D. This ``cooling-off'' period

differs from the period currently required for Qualified Institutional

Investors.31 That period does not commence until the date of the

filing of the Schedule 13D and creates a potential window between the

time of the change in the purpose or effect and the ``prompt'' filing

of a Schedule 13D during which the reporting person could acquire

additional shares. As reproposed, the new rule would prohibit any such

purchases from the moment of the change until the expiration of the

tenth calendar day from the date of the filing of the Schedule 13D.

During the cooling-off period, the rule would prohibit a person from

voting or directing the voting of the subject securities or acquiring

beneficial ownership of any equity securities of the issuer or any

person controlling the issuer.32

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\30\ Proposed Rule 13d-1(b)(4)(i).

\31\ See Rule 13d-1(b)(3)(ii).

\32\ In connection with the 1989 proposals, the Commission

requested comment on the necessity of a cooling-off period and

whether 10 calendar days was the appropriate period. Seven

commenters addressed this issue, and all seven generally supported

the concept of a cooling-off period. Four fully supported the 10 day

time frame while two suggested a five day period, and a third

advocated a 20 day period. The Commission also requested comment on

whether the provision would discourage improper Schedule 13G filings

by persons seeking to influence control. Four commenters generally

believed that such a timing requirement would have such an effect;

two other commenters did not agree, in part because of a concern

that investor ``raiders'' may initially characterize themselves as

``passive investors'' and subsequently delay acknowledging their

control intent.

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The Commission preliminarily believes that the reproposed cooling-

off period is necessary and appropriate when the beneficial owner

determines that it now holds the securities with a disqualifying

purpose or effect and may seek to influence control. The earlier

commencement of the cooling-off period would encourage the prompt

filing of a Schedule 13D.33 The cooling-off period would prevent

further acquisitions or the voting of the subject securities until the

market and investors have been given time to react to the information

in the Schedule 13D filing.

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\33\ The sooner the Schedule 13D filing is made, the sooner the

cooling-off period will end since the cooling-off period ends 10

calendar days from the date the Schedule 13D is filed.

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Comment is again requested on the necessity of the 10 calendar day

cooling-off period. Is the dissemination of information concerning

these filings, even for smaller companies, so rapid and widespread in

the media that such period could be shortened (e.g., to 3 or 5 days)?

One commenter on the 1989 proposals suggested a longer cooling-off

period. Should such period be lengthened (e.g., 15 or 20 days)? Comment

is requested as to the time at which the cooling-off period should

begin--upon the change in purpose or effect, or upon the filing of the

Schedule 13D. If the cooling-off period begins upon the change in

purpose or effect, should it end upon the filing of the Schedule 13D?

D. Twenty-Percent Limit on Ownership Interest Reportable on Schedule

13G and Related Standstill Period

As originally proposed, the amendments to Regulation 13D-G would

have restricted the use of Schedule 13G for all 13G eligible filers

(other than Exempt Investors) by limiting the aggregate amount of

securities that an investor could report on that Schedule to less than

20 percent. An investor would have been required to report on Schedule

13D within 10 calendar days after reaching the 20 percent threshold.

The proposed amendments would have subjected the investor to a

standstill period commencing at the time the threshold was reached and

continuing until the filing of the Schedule 13D.

The original proposals reflected the Commission's concern regarding

the need for prompt disclosure of sizeable blocks of securities because

of inherent control implications corresponding to such ownership

positions.34 In this regard, the Commission specifically requested

comment on the appropriateness of the 20 percent threshold level and

the appropriateness and length of the standstill period.35

[[Page 36526]]

Most of the commenters strongly opposed subjecting institutional

investors to the 20 percent threshold and the corresponding standstill

period. Although recognizing the Commission's concerns regarding the

need for prompt disclosure of sizeable blocks of securities, these

commenters questioned the usefulness of an expedited Schedule 13D

reporting obligation based solely upon reaching the 20 percent

threshold level. The commenters stressed that the increased disclosure

requirements of Schedule 13D are unwarranted where securities are

purchased by otherwise eligible institutions in the ordinary course of

business and that such a provision would impose too many costs with

little, if any, benefit to the market.

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\34\ As stated in the Proposing Release, the Commission does not

intend these proposed rules to create a presumption that beneficial

ownership of 20 percent or more of subject securities indicates

control or a control purpose.

\35\ Three commenters favored a threshold limiting the

availability of Schedule 13G to those filers whose securities

holdings fall below a certain level and also favored the proposed

standstill period. All three, however, believed that a 20 percent

level is too high. One believed that a 10 percent threshold is the

correct level because of the increasingly important role large

institutional investors play in contested voting situations. Another

suggested a 15 percent limit for non-institutional investors because

of the possibility of abuse by those investors and suggested that

such a requirement would not impose undue burdens on institutional

investors.

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In particular, one commenter asserted that (1) where sizeable

blocks are held by institutional investors, such disclosure is already

fulfilled pursuant to the current requirement that a Schedule 13G

filing be made within 10 days after the end of the month where either

an excess of 10 percent ownership or an increase or decrease of more

than five percent ownership occurs, computed as of the last of the

month 36 and (2) institutions cross the 20 percent level most

often because the institutional investor holds convertible stock.

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

\36\ Rule 13d-1(b)(2) [17 CFR 240.13d-1(b)(2)].

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

Certain commenters strongly opposed the 20 percent threshold level

as it would apply to registered broker-dealers. One noted that a

marketmaker's function is to provide the issuer with an efficient

pricing mechanism and to provide purchasers and sellers with liquidity

thereby enabling them to dispose of or acquire securities.

The Commission is proposing today that the 20 percent limit would

apply only with respect to Passive Investors reporting on Schedule 13G

pursuant to new Rule 13d-1(b)(2). Consistent with the current

regulatory scheme, Qualified Institutional Investors would not be

subject to the 20 percent limitation. The Commission recognizes that

institutions that purchase securities in the ordinary course of

business may be burdened by a limitation on the amount of securities

that can be reported on the short-form Schedule 13G. Further, the

Commission preliminarily believes that Schedule 13G strikes an

appropriate balance between furnishing disclosure to the market and the

burdens placed on such institutions.

Upon reaching the 20 percent level, Passive Investors would be

required to report the acquisition within 10 calendar days on Schedule

13D, and would be subject to a standstill period during which time such

investor would not be permitted to vote or direct the voting of the

securities or acquire an additional beneficial ownership interest in

any equity securities of the issuer until the investor files the

Schedule 13D.37 Comment is requested on the appropriateness of

adopting a 20 percent limit on reporting on Schedule 13G and a

standstill period with respect to Passive Investors and with respect to

institutional investors who acquire securities other than in the

ordinary course of business that remain eligible to file on Schedule

13G as Passive Investors. Comment is also requested on whether a higher

or lower threshold should be adopted (e.g., 10 or 15 percent, or 25 or

30 percent.). Is a cap on ownership reported on Schedule 13G by Passive

Investors or the proposed standstill period necessary if the Commission

applies, as proposed, the current Schedule 13D amendment requirements

to Passive Investors? Would a lower threshold, for example 10 percent,

be more appropriate in the event the Commission instead decides to

permit Passive Investors to take advantage of the more liberal Schedule

13G amendment requirements?

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\37\ As proposed, the acquisition that causes the reporting

person to hold 20 percent or more and therefore triggers the

Schedule 13D filing obligation, may also trigger an amendment

requirement for such person's Schedule 13G (e.g., an acquisition of

one percent or more of the class). The Schedule 13G amendment would

be required to be filed promptly upon such acquisition and the

Schedule 13D would be required to be filed within 10 days of the

acquisition. The reporting person may forego filing the amendment to

the Schedule 13G if the Schedule 13D is filed promptly.

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E. Re-establishing Schedule 13G Eligibility

The Commission is proposing to amend Regulation 13D-G to allow

persons who have lost their eligibility to file on Schedule 13G to re-

establish their Schedule 13G-eligibility and file on Schedule

13G.38 Specifically, a Qualified Institutional Investor who has

lost its Schedule 13G eligibility because it is no longer a qualified

entity under Rule 13d-1(b)(1)(ii) or cannot certify that it acquired or

holds the securities in the ordinary course of business and not with

the purpose or effect of changing or influencing control would be

allowed to switch back to Schedule 13G pursuant to the Qualified

Institutional Investor provision 39 once it re-establishes its

status under Rule 13d-1(b)(1)(ii) or can again make the necessary

certifications. Similarly, a Passive Investor that has lost its

Schedule 13G-eligibility under proposed Rule 13d-1(b)(2) because it can

no longer certify that it does not have a disqualifying purpose or

effect or because it exceeded the 20 percent threshold, would be able

to switch back to Schedule 13G when it is once again able to make the

certification or when its beneficial ownership falls below 20 percent.

The Commission preliminarily believes that investors and the market

would be better informed if reporting persons were able to switch back

to Schedule 13G after re-establishing their eligibility, since the

filing of a Schedule 13D would be a clearer indicator of an investor

that currently has a disqualifying purpose or effect or an investor

that holds 20 percent or more of the class. Comment is requested on

whether the proposal would provide better information or whether it

would lead to abuse by filing persons.

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\38\ Proposed Rule 13d-1(b)(7).

\39\ Rule 13d-1(b)(1).

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F. Expansion of the Class of Qualified Institutional Investors

As reproposed, the use of the short-form Schedule 13G pursuant to

the Qualified Institutional Investor provisions of Rule 13d-1(b)(1)

would continue to be limited essentially to institutions such as

brokers, dealers, investment companies, and investment advisers

registered with the Commission, or regulated banks or insurance

companies. Use of the Schedule 13G by similar non-domestic institutions

has been limited in the past to those institutions that have obtained

an exemptive order from the Commission 40 or, under the current

practice, a no-action position from the Division of Corporation Finance

based on the requester's undertaking to grant the Commission access to

information that would otherwise be disclosed in a Schedule 13D and the

comparability of the foreign regulatory scheme applicable to the

particular category of institutional investor.

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

\40\ See Exchange Act Release No. 14692 (April 21, 1978) [43 FR

18484].

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

Since the Passive Investor provisions of proposed Rule 13d-1(b)(2)

would make Schedule 13G available to all investors that do not have a

disqualifying purpose or effect, including foreign investors, it is

unclear whether foreign institutions would still seek relief to file on

Schedule 13G under the Qualified Institutional

[[Page 36527]]

Investor provisions of Rule 13d-1(b)(1). The use of Schedule 13G

pursuant to the Passive Investor provisions would require the schedule

to be filed within 10 calendar days of the acquisition as opposed to

within 45 days after the calendar year in which the institution holds

more than five percent at year end under the Qualified Institutional

Investor provision, and could not be used to report beneficial

ownership of 20 percent or more. Similarly, a prompt amendment

requirement may make reliance on the Passive Investor provision less

useful for foreign institutions than the Qualified Institutional

Investor provision. Comment is requested as to whether the accelerated

filing and amendment requirement, and the 20 percent limit under

proposed Rule 13d-1(b)(2) would discourage foreign investors from using

that provision and cause those foreign institutional investors to

continue to seek relief to file pursuant to Rule 13d-1(b)(1).

The Commission continues to believe that a non-U.S. institution

seeking relief to file pursuant to Rule 13d-1(b)(1) should be subject

to a regulatory scheme in its country comparable to the U.S. regulatory

scheme for the particular category of institution and that such

institutions should undertake to grant the Commission access to

information that would otherwise be disclosed on Schedule 13D.41

Accordingly, no change to current practice is proposed. However,

comment is requested as to whether Rule 13d-1(b)(1) should be amended

expressly to allow foreign institutional investors that are the

functional equivalent of the domestic institutions enumerated in Rule

13d-1(b)(1)(ii) (A)-(G) to file on Schedule 13G pursuant to that

provision without having to obtain individual relief from the

Commission. In this regard, should the foreign institution be required

to certify on the Schedule 13G that it is subject to a regulatory

scheme comparable to the U.S. for the particular category of

institution? Additionally, should filing on Schedule 13G under either

provision only be available to non-U.S. persons who consent on the

Schedule 13G to furnish the Commission with information, at its

request, that would otherwise be disclosed in a Schedule 13D?

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\41\ Under the Qualified Institutional Investor provision, the

initial Schedule 13G is filed based upon the amount beneficially

owned as of the last day of the calendar year unless the beneficial

ownership exceeded 10 percent of the outstanding securities at any

time during the year. Consequently, issuers and the market are not

informed during the year that such an investor holds more than five

percent of the issuer's securities. The Commission preliminarily

believes that since the Qualified Institutional Investor provision

do not require disclosure of such initial acquisitions or the

existence of such investors until the end of the year, these more

lenient filing requirements should be limited to regulated

institutions as enumerated in Rule 13d-1(b)(1)(ii).

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

Additionally, the Commission is proposing that control persons of

Qualified Institutional Investors be allowed to report indirect

beneficial ownership through the controlled entity on Schedule 13G so

long as the control person does not own directly, or indirectly through

an ineligible entity or affiliate, more than one percent of the subject

company's stock and is not seeking to change or influence control of

the subject company.42 Control persons filing on Schedule 13G

pursuant to this provision would not be subject to the 20 percent

limitation as they would if they filed on Schedule 13G pursuant to the

Passive Investor provision.43 The Commission is also proposing to

make a conforming change under Section 16 of the Exchange Act.44

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\42\ Proposed Rule 13d-1(b)(1)(ii)(G). This proposed amendment

codifies the no-action position set forth in Warren E. Buffet &

Berkshire Hathaway, Inc., (available December 5, 1986). Under the

original proposals, the no-action position would have continued to

be necessary because of the timing difference (45-day versus 10-day)

in the filing of the Schedule 13G by eligible institutions and

individuals. However, the current proposal would allow the

qualifying control person to file its Schedule 13G within the same

filing period as the qualifying institution it controls.

\43\ Proposed Rule 13d-1(b)(2).

\44\ The Commission proposes to amend Rule 16a-1(a)(1)(vii) to

include control persons of institutions in the list of persons that

are not deemed to be beneficial owners of securities held for the

benefit of third parties or in customer or fiduciary accounts in the

ordinary course of business as long as the shares are acquired

without the purpose or effect of changing or influencing control of

the issuer or engaging in any arrangement subject to Rule 13d-3(b).

This proposed amendment codifies the interpretive position set forth

in Edward C. Johnson 3d., (available August 20, 1991).

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Finally, under the current requirements, only pension funds that

are subject to the Employee Retirement Income Security Act of 1974

(``ERISA'') are eligible to use Schedule 13G.45 The Commission

limited the category of pension funds eligible to use Schedule 13G to

pension funds subject to ERISA because such funds are subject to

uniform regulatory controls.46 The staff has granted no-action

relief to a state pension fund to use Schedule 13G based upon a showing

that the fund's fiduciaries were subject to similar regulatory

standards as those imposed by ERISA.47 The Commission

preliminarily believes that employee benefit plans maintained primarily

for the benefit of state or local government employees are now

generally subject to fiduciary obligations and standards for investment

that are substantially similar to those imposed by ERISA. Therefore,

the Commission proposes to amend Rule 13d-1(b)(1)(ii)(F) to allow

employee benefit plans maintained primarily for the benefit of

employees of a state or local government or instrumentality to report

beneficial ownership on Schedule 13G for securities acquired or held in

the ordinary course of business and not with the purpose or effect of

influencing the control of the issuer. Comment is requested as to

whether such proposal is necessary or appropriate. The Commission is

proposing to revise the current language in Rule 13d-1(b)(1)(ii)(F) to

clarify that employee benefit plans and pension funds must both be

subject to ERISA. The language will also be modified to eliminate a

redundancy. The Commission is proposing to eliminate the phrase

``pension fund'' because such entities are included in the definition

of employee benefit plan in Section 3(3) of ERISA. The Commission is

also proposing to make a conforming change under Section 16 to amend

Rule 16a-1(a)(1)(vi) to include state and local government employee

benefit plans in the list of persons that are not deemed to be the

beneficial owners of securities held for the benefit of third parties.

Comment is requested on the appropriateness of conforming the list of

institutional investors in Rule 16a-1(a)(1) (i)-(viii) to reflect the

changes made to the list of Qualified Institutional Investors in Rule

13d-1(b)(1)(ii) (A)-(H).

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

\45\ See Rule 13d-1(b)(1)(ii)(F).

\46\ See Exchange Act Release No. 14692, Section II(A)(1)(b)

(April 21, 1978) [43 FR 18484].

\47\ See State of Wisconsin Investment Board and Wisconsin

Retirement System, (available December 8, 1992); see also, Ontario

Teachers' Pension Plan Board, (available May 6, 1992).

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

G. Related and Clarifying Amendments

The Commission is also proposing amendments to clarify the

beneficial ownership reporting requirements. Amendments are proposed to

eliminate the redundancies that currently exist in Regulation 13D-G

regarding the filing and dissemination requirements by setting forth

such requirements in one rule, proposed Rule 13d-7(b). Amendments are

also proposed to revise the dissemination requirements of Schedule 13G.

Since the Commission believes that a majority of investors will file

Schedule 13G in lieu of Schedule 13D as a result of the proposed

amendments to Regulation 13D-G, Schedule 13G will become the primary

reporting document for beneficial ownership. Therefore, amended Rule

13d-7(b) would require that the original and amendments to Schedules

13G be provided to each exchange where the

[[Page 36528]]

security is traded as is currently required for Schedules 13D. Comment

is requested as to whether it is necessary or appropriate to require

that copies of Schedules 13G be provided to each exchange since such

filings are required to be filed electronically on the Commission's

Electronic Data Gathering and Retrieval System and therefore available

in the electronic media, such as the Commission's World Wide Web site.

Additionally, Schedules 13G for exempt acquisitions would continue to

be sent only to the issuer at its principal executive offices and be

filed with the Commission. Amendments to Schedule 13G relating to

exempt acquisitions would no longer be required to be sent to an

exchange.

The Commission is also reproposing that a copy of a Schedule 13D,

Schedule 13G or amendment filed to report ownership of a class of

securities quoted on the National Association of Securities Dealers

Automated Quotation System be provided to the National Association of

Securities Dealers (``NASD'') to parallel the requirements for

exchange-traded securities.48 Comment is requested as to whether

it is necessary or appropriate to require that copies of the schedules

be provided to the NASD.

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

\48\ Proposed Rule 13d-7(b).

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

Amendments to Regulation 13D-G are proposed to clarify the number

of copies required to be filed. Additionally, Rule 13d-7 would be

revised to clarify that a Schedule 13D filed with respect to holdings

reported until then on Schedule 13G, and vice versa, does not require

an additional fee, if beneficial ownership had not fallen below five

percent.49 Finally, technical amendments to Schedules 13D and 13G

are being reproposed to conform the schedules to the proposed rules and

to amend the filing deadlines and the number of copies in the

instruction.

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\49\ The Commission has proposed eliminating the filing fee

required for Schedules 13D and 13G. See Exchange Act Release No.

37220 (May 16, 1996) [61 FR 25601]. If such fee is eliminated, Rule

13d-7 will be revised accordingly.

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H. Effects of Proposed Amendments to Regulation 13D-G

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

Proposed schedule

Issue Current schedule 13D 13D Current schedule 13G Proposed schedule 13G

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

Person Filing.... Any person acquiring No change.......... Qualified Institutional Qualified Institutional

more than 5% of an Investors--Eligible Investors--Expanded to

equity security. institutions acquiring include control persons

Rule 13d-1(a). more than 5% of an of qualified

equity security. Rule institutions and state

13d-1(b). and local employee

benefit plans.

Exempt Investors-- Exempt Investors--No

Persons holding more change.

than 5% of an equity

security who are not

subject to, or whose

acquisitions are exempt

from Section 13(d).

Rule 13d-1(c).

Passive Investors--Any

person holding more

than 5% but less than

20% of an equity

security and did not

acquire such securities

with a purpose or

effect of changing or

influencing control of

the issuer or in a

transaction having such

effect. Proposed Rule

13d-1(b)(2).

Initial Filing... Within 10 days after No change.......... Qualified Institutional Qualified Institutional

the acquisition. Investors--45 days Investors--No change.

Rule 13d-1(a). after calendar year in

which the person

becomes obligated to

file, Rule 13d-1(b)(1),

or within 10 days after

the end of the first

month in which such

person's beneficial

ownership exceeds 10%

of the class of equity

securities. Rule 13d-

1(b)(2).

Exempt Investors--45 Exempt Investors--No

days after calendar change. Passive

year in which the Investors--Within 10

person becomes days after the

obligated to file. Rule acquisition. Proposed

13d-1(c). Rule 13d-1(b)(2).

Amendment........ Filed promptly to No change.......... All Filers--45 days

reflect any after the end of the

material change calendar year to report

including a change any change in the

in investment information. Rule 13d-

intent. An 2(b).

acquisition or

disposition of

beneficial

ownership of

securities equal to

1% or more of the

class is deemed a

material change.

Rule 13d-2(a).

[[Page 36529]]

Qualified Institutional Qualified Institutional

Investors only--In Investors--No Change.

addition to the

requirement stated

above, within 10 days

after the end of the

first month in which

such person's

beneficial ownership

exceeds 10% of the

class of equity

securities, and

thereafter within 10

days of the end of any

month in which such

person's beneficial

ownership increases or

decreases more than 5%,

computed as of the end

of the month. Rule 13d-

1(b)(2).

Exempt Investors--No

change.

Passive Investors--Same

as requirement for

persons filing Schedule

13D. Proposed Rule 13d-

2(a).

Purpose of Disclose purpose of No change.......... Qualified Institutional Qualified Institutional

Acquisition. the transaction. Investors--Requires Investors--No change

Schedule 13D, Item certification that the except for a technical

4. securities were change to the

acquired in the certification.

ordinary course of

business, were not

acquired for the

purpose of and not have

the effect of changing

or influencing control

of the issuer, and were

not acquired in a

transaction having such

an effect. Schedule

13G, Item 10. Rule 13d-

1(b).

Exempt Investors--No Exempt Investors--No

certification required. change.

Passive Investors--Same

certification as

Qualified Institutional

Investors except that

acquisitions need not

occur in the ordinary

course of business.

Schedule 13G, proposed

Item 10(b). Proposed

Rule 13d-1(b)(2).

Initial Schedule Qualified Qualified Note: Ability to refile

13D following Institutional Institutional on Schedule 13G once

filing on Investors--Promptly Investors--No disqualification has

Schedule 13G. , but no later than change. Proposed lapsed clarified.

10 days after such Rules 13d-1(b)(4)

person ceases to be and (b)(6).

an eligible

institution or

determines that it

no longer holds

such securities in

the ordinary course

of business or not

with the purpose or

effect of changing

or influencing the

control of the

issuer. Rule 13d-

1(b)(3).

Exempt Investors-- Exempt Investors--

Within 10 days upon No change.

making an

acquisition subject

to, or not exempt

from Section 13(d).

Passive Investors--

Within 10 days of:

(1) acquiring or

holding the

securities with

the purpose or

effect of changing

or influencing

control of the

issuer or in a

transaction having

such effect.

Proposed Rule 13d-

1(b)(4), or.

[[Page 36530]]

(2) the person's

beneficial

ownership equals

or exceeds 20% of

the class of

equity securities.

Proposed Rule 13d-

1(b)(5).

Cooling-Off Qualified Qualified

Period. Institutional Institutional

Investors--10 day Investors--From

period after the the time the

filing of a person no longer

Schedule 13D holds the

because the person securities without

no longer holds the purpose or

such securities in effect of changing

the ordinary course or influencing

of business or not control of the

with the purpose or issuer until the

effect of changing tenth day from the

or influencing the date the Schedule

control of the 13D is filed.

issuer. Rule 13d- Proposed Rule 13d-

1(b)(3). 1(b) (4)(ii).

Passive Investors--

Same as Qualified

Institutional

Investors.

Proposed Rule 13d-

1(b) (4)(ii).

Standstill Period Passive Investors--

From the time the

person's

beneficial

ownership equals

or exceeds 20% of

the class of

equity securities

until the filing

of the Schedule

13D. Proposed Rule

13d-1(b)(5).

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

III. Initial Regulatory Flexibility Analysis

An Initial Regulatory Flexibility Analysis has been prepared in

accordance with 5 U.S.C. 603 concerning the proposed amendments to the

beneficial ownership rules and related Schedules 13D and 13G and the

proposed amendments to Rules 16a-1(a)(1)(vi) and (vii). The analysis

notes that the principal effect of the revisions to Regulation 13D-G

will be to reduce the disclosure obligations and associated costs to a

majority of persons, including small entities, required to report

beneficial ownership under Sections 13(d) and 13(g) of the Exchange Act

and would eliminate the reporting obligations under Section 16 of the

Exchange Act of certain state and local government employee benefit

plans and certain control persons of Qualified Institutional Investors.

The analysis also indicates that there are no current federal rules

that duplicate, overlap or conflict with the rules and forms to be

amended.

As stated in the analysis, alternatives to the proposed amendments

were considered, including, among other things, changing or simplifying

the compliance or reporting requirements for small entities or

exempting small entities from all requirements to file the schedules

under Regulation 13D-G. As discussed in the analysis, there is no less

restrictive alternative to the proposed rule amendments that would

serve the purposes of the beneficial ownership provisions of the

Exchange Act.

Written comments are encouraged with respect to any aspect of the

analysis. Such comments will be considered in the preparation of the

Final Regulatory Flexibility Analysis if the proposed revisions are

adopted. A copy of the Initial Regulatory Flexibility Analysis may be

obtained by contacting Dennis O. Garris in the Office of Mergers and

Acquisitions, Division of Corporation Finance, Securities and Exchange

Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.

IV. Paperwork Reduction Act

Certain provisions of Regulation 13D-G contain ``collection of

information'' requirements within the meaning of the Paperwork

Reduction Act of 1995 (44 U.S.C. 3501 et seq.), and the Commission has

submitted proposed revisions to Regulation 13D-G to the Office of

Management and Budget (``OMB'') for review in accordance with 44 U.S.C.

3507(d) and 5 C.F.R. Sec. 1320.11. The titles for the collections of

information are ``Schedule 13D'' and ``Schedule 13G''.

The beneficial ownership reporting requirements are intended to

provide investors and the subject issuer with information about

accumulations of securities that may have the ability to change or

influence control of the issuer. Regulation 13D-G currently requires

that most persons file a detailed disclosure statement on Schedule 13D

upon acquiring more than five percent of the subject securities.

Certain qualified institutions (Qualified Institutional Investors) and

persons who

[[Page 36531]]

have not made an acquisition subject to Section 13(d) (Exempt

Investors) may file the short-form disclosure statement Schedule 13G

which requires less detailed disclosure than Schedule 13D.50

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\50\ See fn. 13 supra for a comparison of the primary

differences between the disclosure required by Schedules 13D and

13G.

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

The Commission anticipates that the proposal to make Schedule 13G

available, in lieu of Schedule 13D, to all Passive Investors

beneficially owning less than 20 percent would reduce the existing

information collection requirements associated with Regulation 13D-G

and Schedules 13D and 13G. The proposed amendments will allow more

individuals and non-institutional investors to file the short-form

Schedule 13G. It is estimated that 803 Schedules 13D would be filed

each year if the proposals were adopted.51 Each Schedule 13D would

impose an estimated burden of 14.75 hours for a total annual burden of

11,844.25 hours.52 It is estimated that 9,065 Schedules 13G would

be filed each year if the proposals were adopted.53 Each Schedule

13G would impose an estimated burden of 10 hours for a total annual

burden of 90,650 hours.

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\51\ This estimated number of respondents is based upon the

number of Schedules 13D filed in fiscal year 1995 and assumes no

increase each year. This represents an estimated 76 percent

reduction from the 3,347 Schedules 13D filed in fiscal year 1995.

The estimated 76 percent reduction in Schedule 13D filings is based

upon the sample data provided by the Office of Economic Analysis.

\52\ Total annual burden hours are determined by multiplying the

estimated average burden hours for completing the particular

schedule by the estimated number of respondents that file that

schedule.

\53\ This number of respondents is based upon the number of

Schedules 13G filed in fiscal year 1995 (6,521) plus the additional

2,544 respondents that are expected to file on Schedule 13G under

the proposed rules and assumes no increase each year.

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Providing the information required by Schedules 13D and 13G is

mandatory under Sections 13(d) and 13(g) and Regulation 13D-G of the

Exchange Act. The information will not be kept confidential. Unless a

currently valid OMB control number is displayed on the Schedules 13D

and 13G, the Commission may not sponsor or conduct or require response

to an information collection.

Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits

comments to: (i) evaluate whether the proposed collection of

information is necessary for the proper performance of the functions of

the agency, including whether the information will have practical

utility; (ii) evaluate the accuracy of the Commission's estimate of the

burden of the proposed collection of information; (iii) enhance the

quality, utility, and clarity of the information to be collected; and,

(iv) minimize the burden of collection of information on those who are

to respond, including through the use of automated collection

techniques or other forms of information technology.

Persons desiring to submit comments on the collection of

information requirements should direct the comments to the Office of

Management and Budget, Attention: Desk Officer for the Securities and

Exchange Commission, Office of Information and Regulatory Affairs,

Washington, D.C. 20503, and should send a copy to Jonathan G. Katz,

Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W.,

Washington, D.C. 20549, with reference to File No. S7-16-96. The Office

of Management and Budget is required to make a decision concerning the

collection of information between 30 and 60 days after publication of

this release. Consequently, a comment to OMB is best assured of having

its full effect if OMB receives it within 30 days of publication.

V. Cost-Benefit Analysis

No specific data was provided in response to the Commission's

original request regarding the costs and benefits associated with

amending the filing requirements under Regulation 13D-G.54 It

appears that making Schedule 13G available to all Passive Investors

holding less than 20 percent of subject securities should significantly

reduce the reporting costs incurred by those investors. Regulation 13D-

G applies to any person that acquires more than five percent of a class

of equity securities. Although it is difficult to determine reasonably

the number of small entities and the costs to small entities of

complying with the proposed amendments, the Commission believes that

the proposed amendments would not result in a substantial economic

impact to a significant number of small entities but rather should

result in a substantial savings to entities (both small and large) that

qualify to file Schedule 13G in lieu of Schedule 13D. The proposed

amendments would decrease the disclosure obligations of a significant

number of persons currently required to file the long-form Schedule

13D. Based upon data provided by the Commission's Office of Economic

Analysis, 76 percent of Schedules 13D studied by that office did not

disclose a purpose or effect for changing or influencing control of the

issuer and, therefore, would benefit from the amendments proposed

today.55

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\54\ However, eight commenters expressed general views as to the

costs and benefits associated with the amendments, without

attempting to quantify either the costs or benefits. Five commenters

stated that the proposed amendments would reduce passive filers'

reporting burdens and associated costs. Seven commenters expressed

concern that the proposed 20 percent limitation upon the

availability of Schedule 13G to passive institutional investors

would impose increased compliance burdens and costs without

providing any useful information to the public. Finally, three

commenters believed that requiring Schedule 13G filers to provide

each exchange upon which the security is traded a copy of the

Schedule would be overly burdensome because such information is not

readily available.

\55\ See Section I.B. supra.

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In response to comments in connection with the potential increased

costs that institutional investors could incur if subject to the 20

percent threshold level, the Commission is not reproposing the

amendment with respect to Qualified Institutional Investors.

The Commission again requests commenters to provide views and data

as to the costs and benefits associated with amending the filing

requirements for beneficial ownership statements.

VI. Request for Comment

Any interested persons wishing to submit written comments on the

proposals, to suggest additional changes, or to submit comments on

other matters that might have an impact on the proposals, are requested

to do so. In addition to the specific inquiries made throughout this

release, the Commission solicits comments on the usefulness of the

proposed revisions to the Regulation 13D-G reporting scheme and the

conforming changes under Section 16 to reporting persons, registrants,

and the marketplace at large.

The Commission also requests comment on whether the proposed rules,

if adopted, would have an adverse effect on competition or would impose

a burden on competition that is neither necessary nor appropriate in

furthering the purposes of the Exchange Act. Comments on this inquiry

will be considered by the Commission in complying with its

responsibilities under Section 23(a)(2) of the Exchange Act.56

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

\56\ 15 U.S.C. 78w(a)(2).

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The Commission also encourages the submission of written comments

with respect to any aspect of the initial regulatory flexibility

analysis. Such written comments will be considered in the preparation

of the final regulatory flexibility analysis if the proposed rules are

adopted.

Persons wishing to submit written comments should file three copies

thereof with Jonathan G. Katz, Secretary,

[[Page 36532]]

Securities and Exchange Commission, 450 Fifth Street, N.W., Washington,

D.C. 20549. Comments may also be submitted electronically at the

following e-mail address: [email protected]. Comment letters should

refer to File No. S7-16-96; this file number should be included on the

subject line if e-mail is used. All comments received will be available

for public inspection and copying in the Commission's public reference

room at the same address. Electronically submitted comments will be

posted on the Commission's Internet web site (http://www.sec.gov).

VII. Statutory Basis and Text of Amendments

The amendments to Rules 13d-1, 13d-2 and 13d-7 and Schedules 13D

and 13G and Rule 16a-1 are being proposed pursuant to the authority set

forth in Sections 3(b), 13, 16 and 23 of the Securities Exchange Act of

1934.

Lists of Subjects in 17 CFR Part 240

Reporting and recordkeeping requirements, Securities.

Text of Proposed Amendments

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

of Federal Regulations is proposed to be amended as follows:

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

1934

1. 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, 77ttt, 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.

* * * * *

2. By amending Sec. 240.13d-1 to revise paragraph (a), the

introductory text of paragraph (b)(1), paragraphs (b)(1)(ii)(F) and

(G), and paragraphs (b)(2), (b)(3), (b)(4), and (c) and to add

paragraphs (b)(5), (b)(6) and (b)(7) to read as follows:

Sec. 240.13d-1 Filing of Schedules 13D and 13G.

(a) Any person who, after acquiring directly or indirectly the

beneficial ownership of any equity security of a class which is

specified in paragraph (d) of this section, is directly or indirectly

the beneficial owner of more than five percent of such class shall,

within 10 days after such acquisition, file with the Commission, a

statement containing the information required by Schedule 13D

(Sec. 240.13d-101).

(b)(1) A person who would otherwise be obligated under paragraph

(a) of this section to file a statement on Schedule 13D (Sec. 240.13d-

101) may, in lieu thereof, file with the Commission, within 45 days

after the end of the calendar year in which such person became so

obligated, a short-form statement on Schedule 13G (Sec. 240.13d-102):

Provided, That it shall not be necessary to file a Schedule 13G unless

the percentage of the class of equity security specified in paragraph

(d) of this section beneficially owned as of the end of the calendar

year is more than five percent: And provided further, That:

* * * * *

(ii) * * *

(F) An employee benefit plan as defined in Section 3(3) of the

Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C.

1001 et seq. (``ERISA'') which is subject to the provisions of ERISA,

or any such plan that is not subject to ERISA that is maintained

primarily for the benefit of the employees of a state or local

government or instrumentality, or an endowment fund;

(G) A parent holding company or control person, provided the

aggregate amount held directly by the parent or control person, and

directly and indirectly by their subsidiaries or affiliates that are

not persons specified in Sec. 240.13d-1(b)(1)(ii) (A) through (F), does

not exceed one percent of the securities of the subject class;

* * * * *

(2) A person who would otherwise be obligated under paragraph (a)

of this section to file a statement on Schedule 13D (Sec. 240.13d-101)

may, in lieu thereof, file with the Commission, within 10 days after an

acquisition described in paragraph (a) of this section, a short-form

statement on Schedule 13G (Sec. 240.13d-102): Provided, That such

person:

(i) Has not acquired such securities with any purpose, or with the

effect of, changing or influencing the control of the issuer, or in

connection with or as a participant in any transaction having such

purpose or effect, including any transaction subject to Sec. 240.13d-

3(b);

(ii) Is not a person reporting pursuant to paragraph (b)(1) of this

section; and

(iii) Is not directly or indirectly the beneficial owner of 20

percent or more of such class.

(3) Any person relying on Sec. 240.13d-1(b)(1) or Sec. 240.13d-2(b)

shall, in addition to filing any statements thereunder, file a

statement on Schedule 13G (Sec. 240.13d-101), or amendment thereto,

within 10 days after the end of the first month in which such person's

direct or indirect beneficial ownership exceeds 10 percent of a class

of equity securities specified in Sec. 240.13d-1(d), computed as of the

last day of the month, and thereafter within 10 days after the end of

any month in which such person's beneficial ownership of securities of

such class, computed as of the last day of the month, increases or

decreases by more than five percent of such class of equity securities.

Once an amendment has been filed reflecting beneficial ownership of

five percent or less of the class of securities, no additional filings

are required by this paragraph (b)(3) unless the person thereafter

becomes the beneficial owner of more than 10 percent of the class,

computed as of the last day of the month.

(4)(i) Notwithstanding paragraphs (b)(1), (b)(2) and (b)(3) of this

section and Sec. 240.13d-2(b), a person that has reported that it is

the beneficial owner of more than five percent of a class of equity

securities in a statement on Schedule 13G (Sec. 240.13d-102) pursuant

to paragraph (b)(1), (b)(2) or (b)(3) of this section, or is required

to report such acquisition but has not yet filed the schedule, shall

immediately become subject to Secs. 240.13d-1(a) and 240.13d-2(a) and

shall file a statement on Schedule 13D (Sec. 240.13d-101) within 10

days if, and shall remain subject to such requirements for so long as,

such person:

(A) Has acquired or holds such securities with a purpose or effect

of changing or influencing control of the issuer, or in connection with

or as a participant in any transaction having such purpose or effect,

including any transaction subject to Sec. 240.13d-3(b); and

(B) Is at that time the beneficial owner of more than five percent

of a class of equity securities described in Sec. 240.13d-1(d).

(ii) From the time such person has acquired or holds such

securities with a purpose or effect of changing or influencing control

of the issuer, or in connection with or as a participant in any

transaction having such purpose or effect until the expiration of the

tenth day from the date of the filing of a Schedule 13D (Sec. 240.13d-

101) pursuant to this section, such person shall not:

(A) Vote or direct the voting of the securities described therein;

or

(B) Acquire an additional beneficial ownership interest in any

equity securities of the issuer of such securities, nor of any person

controlling such issuer.

(5) Notwithstanding paragraph (b)(2) of this section and

Sec. 240.13d-2(b),

[[Page 36533]]

persons reporting on Schedule 13G (Sec. 240.13d-102) pursuant to

paragraph (b)(2) of this section shall immediately become subject to

Secs. 240.13d-1(a) and 240.13d-2(a) and shall remain subject to such

requirements for so long as, and shall file a statement on Schedule 13D

(Sec. 240.13d-101) within 10 days of the date on which, such person's

beneficial ownership equals or exceeds 20 percent of the class of

equity securities. Until the filing of a statement on Schedule 13D

pursuant to this paragraph, such person shall not:

(i) Vote or direct the voting of the securities described therein,

or

(ii) Acquire an additional beneficial ownership interest in any

equity securities of the issuer of such securities, nor of any person

controlling such issuer.

(6)(i) Any person who has reported an acquisition of securities in

a statement on Schedule 13G (Sec. 240.13d-102) pursuant to paragraph

(b)(1) or (b)(3) of this section and thereafter ceases to be a person

specified in paragraph (b)(1)(ii) of this section shall immediately

become subject to Sec. 240.13d-1(a) or Sec. 240.13d-1(b)(2) (if such

person satisfies the requirements specified in Sec. 240.13d-1(b)(2)),

and Secs. 240.13d-2 (a) or (b) and shall remain subject to such

requirements for so long as, and shall file, within 10 days thereafter,

a statement on Schedule 13D (Sec. 240.13d-101) or amendment to Schedule

13G, as applicable, if such person is a beneficial owner at that time

of more than five percent of the class of equity securities.

(ii) Any person that has reported beneficial ownership on Schedule

13G (Sec. 240.13d-102) pursuant to Sec. 240.13d-1(b)(1) shall file an

amendment on Schedule 13G within 10 days of the date that such person

determines that it no longer has acquired or holds such securities in

the ordinary course of business, Provided That such person may continue

to file on Schedule 13G pursuant to Sec. 240.13d-1(b)(2).

(7) Any person who has filed a Schedule 13D (Sec. 240.13d-101)

pursuant to paragraph (b)(4), (b)(5) or (b)(6) of this section may

again report its beneficial ownership on Schedule 13G (Sec. 240.13d-

102) pursuant to paragraphs (b)(1), (b)(2) or (b)(3) of this section

provided such person qualifies thereunder, as applicable, by filing a

Schedule 13G (Sec. 240.13d-102) once the person determines that the

provisions of paragraph (b)(4), (b)(5) or (b)(6) of this section no

longer apply.

(c) Any person who is or becomes directly or indirectly the

beneficial owner of more than five percent of any equity security of a

class specified in paragraph (d) of this section and who is not

required to file a statement under paragraph (a) of this section by

virtue of the exemption provided by Section 13(d)(6) (A) or (B) of the

Act (15 U.S.C. 78m(d)(6)(A) or 78m(d)(6)(B)), or because such

beneficial ownership was acquired prior to December 22, 1970, or

because such person otherwise (except for the exemption provided by

Section 13(d)(6)(C) of the Act (15 U.S.C. 78m(d)(6)(C))) is not

required to file such a statement, shall file with the Commission,

within 45 days after the end of the calendar year in which such person

became obligated to report under this paragraph (c), a statement

containing the information required by Schedule 13G (Sec. 240.13d-102).

* * * * *

3. By amending Sec. 240.13d-2 by revising paragraphs (a), (b), and

the note following paragraph (c) to read as follows:

Sec. 240.13d-2 Filing of amendments to Schedules 13D or 13G.

(a) If any material change occurs in the facts set forth in the

Schedule 13D (Sec. 240.13d-101) required by Sec. 240.13d-1(a) or the

Schedule 13G (Sec. 240.13d-102) filed pursuant to Sec. 240.13d-1(b)(2),

including, but not limited to, any material increase or decrease in the

percentage of the class beneficially owned, the person or persons who

were required to file such statement shall promptly file or cause to be

filed with the Commission an amendment disclosing such change. An

acquisition or disposition of beneficial ownership of securities in an

amount equal to one percent or more of the class of securities shall be

deemed ``material'' for purposes of this section; acquisitions or

dispositions of less than such amounts may be material, depending upon

the facts and circumstances.

(b) Notwithstanding paragraph (a) of this section, and provided

that the person filing a Schedule 13G (Sec. 240.13d-102) pursuant to

Sec. 240.13d-1(b)(1) continues to meet the requirements set forth

therein, any person who has filed a Schedule 13G pursuant to

Sec. 240.13d-1(b)(1) or Sec. 240.13d-1(c) shall amend such statement

within forty-five days after the end of each calendar year if, as of

the end of such calendar year, there are any changes in the information

reported in the previous filing on that Schedule; Provided, however,

That such amendment need not be filed with respect to a change in the

percent of class outstanding previously reported if such change results

solely from a change in the aggregate number of securities outstanding.

Once an amendment has been filed reflecting beneficial ownership of

five percent or less of the class of securities, no additional filings

are required unless the person thereafter becomes the beneficial owner

of more than five percent of the class and is required to file pursuant

to Sec. 240.13d-1.

(c) * * *

Note to Sec. 240.13d-2: For persons filing a short-form

statement pursuant to Rule 13d-1(b) (1) or (2), see also Rules 13d-

1(b) (3), (4), (5), and (6).

4. By amending Sec. 240.13d-7 by revising the section heading,

designating the current text as paragraph (a), revising the last

sentence of newly designated paragraph (a) and adding paragraph (b) to

read as follows:

Sec. 240.13d-7 Fees for filing Schedules 13D or 13G; Number of Copies;

Dissemination.

(a) * * * No fees shall be required with respect to the filing of

any amended Schedule 13D (Sec. 240.13d-101) or amended Schedule 13G

(Sec. 240.13d-102), and no fees shall be required with respect to an

initial Schedule 13D or initial Schedule 13G if the filing person

previously has filed a Schedule 13D or Schedule 13G reporting

beneficial ownership of more than five percent of such class of equity

securities and has not subsequently filed an amendment reporting

beneficial ownership of five percent or less of such class; Provided,

however, That once an amendment has been filed reflecting beneficial

ownership of five percent or less of such class, an additional fee of

$100 shall be paid with the next filing of that person that reflects

ownership of more than five percent.

(b) Schedules filed with the Commission pursuant to Secs. 240.13d-1

and 240.13d-2 in paper format shall include a signed original and five

copies of the schedule, including all exhibits. One copy of the

Schedule filed pursuant to Secs. 240.13d-1 and 240.13d-2 shall be sent

to the issuer of the security at its principal executive office, by

registered or certified mail, and (except with respect to persons

filing pursuant to Sec. 240.13d-1(c)) to each national securities

exchange or the securities association that operates the automated

inter-dealer quotation system where the security is traded or

authorized to be quoted.

5. By amending Sec. 240.13d-101 by revising the language preceding

the first box on the cover page, and revising the note on the cover

page to read as follows:

[[Page 36534]]

Sec. 240.13d-101 Schedule 13D--Information to be included in

statements filed pursuant to Sec. 240.13d-1(a) and amendments thereto

filed pursuant to Sec. 240.13d-2(a).

* * * * *

If the filing person has previously filed a statement on Schedule

13G to report the acquisition that is the subject of this Schedule 13D,

and is filing this schedule because of Secs. 240.13d-1(b)(4), 240.13d-

1(b)(5) or 240.13d-1(b)(6), check the following box.

* * * * *

Note: Schedules filed in paper format shall include a signed

original and five copies of the schedule, including all exhibits.

See Sec. 240.13d-7(b) for other parties to whom copies are to be

sent.

* * * * *

6. By amending Sec. 240.13d-102 by revising the section heading,

adding a line for the date of the reportable event following the line

for CUSIP Number, revising Instruction A, revising Items 3, 4, and 10,

and revising the note at the end of the schedule, to read as follows:

Sec. 240.13d-102 Schedule 13G--Information to be included in

statements filed pursuant to Sec. 240.13d-1 (b) and (c) and amendments

thereto filed pursuant to Sec. 240.13d-1(b)(3) or Sec. 240.13d-2.

* * * * *

(Date of Event Which Requires Filing of this Statement)

* * * * *

Instructions. A. Statements filed pursuant to Sec. 240.13d-1(b)(1)

containing the information required by this schedule shall be filed not

later than February 14 following the calendar year in which the person

became obligated to report or within the time specified in

Sec. 240.13d-1(b)(3), if applicable. Statements filed pursuant to

Sec. 240.13d-1(b)(2) shall be filed not later than 10 days after the

event requiring the filing.

* * * * *

Item 3. If this statement is filed pursuant to Secs. 240.13d-

1(b)(1) or 240.13d-2(b), check whether the person filing is a:

(a) [ ] Broker or dealer registered under section 15 of the Act.

(b) [ ] Bank as defined in section 3(a)(6) of the Act.

(c) [ ] Insurance company as defined in section 3(a)(19) of the

Act.

(d) [ ] Investment company registered under section 8 of the

Investment Company Act of 1940.

(e) [ ] Investment adviser registered under section 203 of the

Investment Advisers Act of 1940.

(f) [ ] Employee benefit plan as defined in Section 3(3) of the

Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C.

1001 et seq. (``ERISA'') which is subject to the provisions of ERISA,

or any such plan that is not subject to ERISA that is maintained

primarily for the benefit of the employees of a state or local

government or instrumentality, or an endowment fund.

(g) [ ] Parent holding company or control person, in accordance

with Sec. 240.13d-1(b)(1)(ii)(G).

If this statement is filed pursuant to Sec. 240.13d-1(b)(2), check

this box. ______

Item 4. Ownership.

Provide the following information regarding the aggregate number

and percentage of the class of securities of the issuer identified in

Item 1.

(a) Amount beneficially owned: ____________.

(b) Percent of class: ____________.

(c) Number of shares as to which such person has:

(i) Sole power to vote or to direct the vote ____________.

(ii) Shared power to vote or to direct the vote ____________.

(iii) Sole power to dispose or to direct the disposition of

____________.

(iv) Shared power to dispose or to direct the disposition of

____________.

Instruction. For computations regarding securities which represent

a right to acquire an underlying security see Sec. 240.13d-3(d)(1).

* * * * *

Item 10. Certification.

(a) The following certification shall be included if the statement

is filed pursuant to Sec. 240.13d-1(b)(1):

By signing below I certify that, to the best of my knowledge and

belief, the securities referred to above were acquired and held in the

ordinary course of business and were not acquired or held for the

purpose of and do not have the effect of changing or influencing the

control of the issuer of such securities and were not acquired or held

in connection with or as a participant in any transaction having such

purpose or effect.

(b) The following certification shall be included if the statement

is filed pursuant to Sec. 240.13d-1(b)(2):

By signing below I certify that, to the best of my knowledge and

belief, the securities referred to above were not acquired or held for

the purpose of and do not have the effect of changing or influencing

the control of the issuer of such securities and were not acquired or

held in connection with or as a participant in any transaction having

such purpose or effect.

* * * * *

Note: Schedules filed in paper format shall include a signed

original and five copies of the schedule, including all exhibits.

See Sec. 240.13d-7(b) for other parties for whom copies are to be

sent.

* * * * *

2. By amending Sec. 240.16a-1 to revise paragraphs (a)(1)(vi) and

(vii) to read as follows:

Sec. 240.16a-1 Definition of terms.

* * * * *

(a) * * *

(1) * * *

(vi) An employee benefit plan as defined in Section 3(3) of the

Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C.

1001 et seq. (``Employee Retirement Income Security Act'') which is

subject to the provisions of the Employee Retirement Income Security

Act, or any such plan that is not subject to the Employee Retirement

Income Security Act that is maintained primarily for the benefit of the

employees of a state or local government or instrumentality, or an

endowment fund;

(vii) A parent holding company or control person, provided the

aggregate amount held directly by the parent or control person, and

directly and indirectly by its subsidiaries or affiliates that are not

persons specified in Sec. 240.16a-1(a)(1) (i) through (vi), does not

exceed one percent of the subject class; and

* * * * *

Dated: July 3, 1996.

By the Commission.

Jonathan G. Katz,

Secretary.

[FR Doc. 96-17579 Filed 7-10-96; 8:45 am]

BILLING CODE 8010-01-P