Phase-One Recommendations of Task Force on Disclosure Simplification

Federal RegisterMar 11, 1996

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SUMMARY: The Commission has thus far considered certain of the

recommendations contained in the Task Force on Disclosure

Simplification's Report (``Task Force Report''), the publication of

which the Commission is authorizing today. The Commission now proposes

to eliminate a number of rules and forms that may no longer be

necessary or appropriate for the protection of investors, and to

propose other minor or technical rule changes or corrections. Other

proposals designed to improve the disclosure process, both for

investors and those subject to the Commission's disclosure

requirements, may be forthcoming in future releases following the

Commission's further consideration of the remaining Task Force

recommendations. Accordingly, by issuing this release, the Commission

does not intend to express any view on the merits of any of the Task

Force's recommendations not addressed in this release.

DATES: Comments should be submitted on or before April 10, 1996.

ADDRESSES: All comments concerning the rule proposals should be

submitted in triplicate to Jonathan G. Katz, Secretary, U.S. Securities

and Exchange Commission, Mail Stop 6-9, 450 Fifth Street NW.,

Washington, D.C. 20549. Comments also may be submitted electronically

at the following E-mail address: [email protected]. All comment

letters should refer to File Number S7-6-96; this file number should be

included on the subject line if E-mail is used. Comment letters will be

available for inspection and copying in the public reference room at

the same address. Electronically submitted comment letters will be

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

FOR FURTHER INFORMATION CONTACT: James R. Budge, Office of Disclosure

Policy, Division of Corporation Finance, at (202) 942-2910, Douglas G.

Tanner, Office of Chief Accountant, Division of Corporation Finance at

(202) 942-2960 or M. Kathleen Haller, Division of Corporation Finance,

at (202) 942-1977.

SUPPLEMENTARY INFORMATION: In order to begin implementing certain of

the recommendations of the Task Force on Disclosure Simplification that

it has so far considered, the Commission today is proposing the

elimination of Rules 3-16,1 4-05,2 4-06,3 and 4-10 (b)

through (h) 4 of Regulation S-X,5 Industry Guide 1,6

Rule 148 7 under the Securities Act of 1933 (``Securities

Act''),8 Regulation B 9 (including Forms 1-G and 3-G and

Schedules A, B, C, and D thereunder 10), Rules 445,11

446,12 447 13 and 494 14 of Regulation C under the

Securities Act,15 Regulation F,16 (including Form 1-F

17), Securities Act Rules 702(T) 18 and 703(T),19 Form

701,20 Rule 13a-17 21 under the Securities Exchange Act of

1934 (``Exchange Act''),22 Exchange Act Rules 15d-17,23 16b-

1(c) 24 and 16b-4,25 General Instruction I of Form 10-

K,26 and Form 10-C.27 In addition, amendments are being

proposed to the following rules and forms: Item 501 28 and Item

601(b) 29 of Regulations S-B 30 and S-K,31 Rule

252(h)(2) 32 of Regulation A,33 Rules 402,34 406,35

464,36 471,37 472 38 and 473 39 of Regulation C,

Rule 504 40 of Regulation D,41, Rule 902 42 of

Regulation S,43 Rule 311 44 of Regulation S-T,45 Form F-

6,46 Form F-7,47 Form F-8,48 Form F-9,49 Form F-

10,50 Form F-80,51 and Exchange Act Rules 12b-11,52 13a-

13,53 14d-1,54 15d-13,55 16a-3,56 and 24b-2.57

\1\ 17 CFR 210.3-16.

\2\ 17 CFR 210.4-05.

\3\ 17 CFR 210.4-06.

\4\ 17 CFR 210.4-10(a) through (h).

\5\ 17 CFR Part 210.

\6\ 17 CFR 229.801(a) and 229.802(a).

\7\ 17 CFR 230.148.

\8\ 15 U.S.C. 77a et seq.

\9\ 17 CFR 230.300 through 230.346.

\10\ Referenced in 17 CFR 239.101.

\11\ 17 CFR 230.445.

\12\ 17 CFR 230.446.

\13\ 17 CFR 230.447.

\14\ 17 CFR 230.494.

\15\ 17 CFR 230.400 through 230.494.

\16\ 17 CFR 230.651 through 230.656.

\17\ 17 CFR 239.300.

\18\ 17 CFR 230.702(T).

\19\ 17 CFR 230.703(T).

\20\ 17 CFR 239.701.

\21\ 17 CFR 240.13a-17.

\22\ 15 U.S.C. 78a et seq.

\23\ 17 CFR 240.15d-17.

\24\ 17 CFR 240.16b-1.

\25\ 17 CFR 240.16b-4.

\26\ 17 CFR 249.310.

\27\ 17 CFR 249.310c.

\28\ 17 CFR 229.501.

\29\ 17 CFR 228.601(b) and 17 CFR 229.601(b).

\30\ 17 CFR Part 228.

\31\ 17 CFR Part 229.

\32\ 17 CFR 230.252(h)(2).

\33\ 17 CFR 230.251 through 230.263.

\34\ 17 CFR 230.402.

\35\ 17 CFR 230.406.

\36\ 17 CFR 230.464.

\37\ 17 CFR 230.471.

\38\ 17 CFR 230.472.

\39\ 17 CFR 230.473.

\40\ 17 CFR 230.504.

\41\ 17 CFR 230.501 through 230.508.

\42\ 17 CFR 230.902.

\43\ 17 CFR 230.901 through 230.904.

\44\ 17 CFR 232.311.

\45\ 17 CFR Part 232.

\46\ 17 CFR 239.36.

\47\ 17 CFR 239.37.

\48\ 17 CFR 239.38.

\49\ 17 CFR 239.39.

\50\ 17 CFR 239.40.

\51\ 17 CFR 239.41.

\52\ 17 CFR 240.12b-11.

\53\ 17 CFR 240.13a-13.

\54\ 17 CFR 240.14d-1.

\55\ 17 CFR 240.15d-13.

\56\ 17 CFR 240.16a-3.

\57\ 17 CFR 240.24b-2.

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I. Background

Chairman Arthur Levitt organized the Task Force on Disclosure

Simplification (``Task Force'') in August 1995 to review forms and

rules relating to capital-raising transactions, periodic reporting

pursuant to the Exchange Act, proxy solicitations, and tender offers

and beneficial ownership reports under the Williams Act. The goal was

to simplify the disclosure process and to make regulation of capital

formation more effective and efficient where consistent with investor

protection.

In the course of its review, the Task Force met with issuing

companies, investor groups, underwriters, accounting firms, law firms

and others who participate daily in the capital markets (``industry

participants''). The Task Force prepared a report summarizing its

findings and setting forth recommendations and suggestions of areas for

further Commission study. The Task Force Report was presented to the

Commission at an open meeting on March 5, 1996.58

\58\ The Report is available for inspection and copying in the

Commission's public reference room. The Report also is posted on the

Commission's Internet web site (http://www.sec.gov). Persons

interested in commenting on the Report may do so by referring to

File No. S7-6-96.

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The Task Force has recommended that the Commission eliminate or

modify many rules and forms, as well as simplify several key aspects of

securities offerings. Having had the opportunity to consider a

relatively small number of those recommendations, the Commission has

determined to implement some of the Task Force Report's recommendations

by proposing for public comment the elimination of 45 rules and 4 forms

in conjunction with the publication of the Task Force

[[Page 9849]]

Report. A number of other revisions, including minor and technical

amendments, also are being proposed. Other proposals designed to

improve the disclosure process, both for investors and those subject to

the Commission's disclosure requirements, may be forthcoming in future

releases following the Commission's further consideration of the Task

Force recommendations.

The Commission is taking the first step towards implementation of

certain of the Task Force recommendations by proposing the elimination

or amendment of the rules and forms enumerated below. By issuing these

proposals for public comment simultaneously with the publication of the

Task Force Report, the Commission does not intend to indicate either

approval or disapproval of any of the remaining recommendations or

suggestions in the Task Force Report that it has not yet fully

considered.

II. Non-Financial Disclosure

A. Securities Act Rules

1. Regulation B (Rules 300-346), and Accompanying Schedules A, B, C,

and D, and Forms 1-G and 3-G

Regulation B provides a conditional, limited exemption from

Securities Act registration for offerings of ``fractional undivided

interests'' in oil or gas rights of up to $250,000 per offering. A

precursor to Regulation B was adopted by the Federal Trade Commission

in 1934; 59 Regulation B was last substantially revised in

1972.60

\59\ Release No. 33-185 (June 30, 1934).

\60\ Release No. 33-5314 (October 11, 1972) [37 FR 23829].

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In order to qualify for the Regulation B exemption, an offeror of

fractional undivided interests in certain specified oil or gas rights

must file an offering sheet with the Commission at least ten days prior

to commencing the offering. The offering sheet must contain the

information specified by Schedules A, B, C, or D, depending on the

distinct type of oil/gas interest, as well as on whether the enterprise

is producing or non-producing. These schedules require some detailed

information concerning the nature and amount of the interests offered;

the legal rights and obligations created by such interests; a

description of the property in question; for producing interests, a

history of the oil/gas production activities in the field in question;

and, for non-producing interests, a description of plans for the

drilling of wells, including the estimated costs and method of

financing such drilling. However, Regulation B does not require any

offeror to furnish current or past financial statements.

Regulation B also requires an offeror to submit two post-offering

reports: Form 1-G and Form 3-G. Form 1-G, which is filed with the

Commission, requires disclosure of information pertaining to each sale

of the offered securities. Form 3-G, which is sent to each purchaser as

well as filed with the Commission, includes more detailed information

pertaining to the offering's results, including the actual cost of

drilling, and expenses incurred in the selling effort.

Between 1966 and 1977, the Commission received 6,904 Regulation B

filings. This relatively large number of Regulation B filings appears

to have corresponded with a spurt of oil/gas drilling activity and

related financing triggered by the energy crisis of the mid 1970s. In

1975 alone, the Commission received 625 Regulation B offering sheets

pertaining to $35.4 million in total sales.

However, by 1977 the number of Regulation B offering sheets

received by the Commission had dropped to 96, covering only $7.3

million in aggregate sales of oil/gas securities. Since then, the

number of Regulation B offering sheets filed has steadily declined,

from 94 such filings in 1980, to 13 in 1985, 7 in 1990, 4 in 1992, and,

finally, 0 in 1995. Moreover, since enactment of Regulation B's

reporting requirements in 1972, the Commission has received only one

each of Form 1-G and Form 3-G.

Comment is requested as to whether Regulation B (and accompanying

schedules and forms) continues to be useful to investors and issuers.

Does the availability of other exemptions, such as the limited offering

exemption from registration set forth in Regulation D, or the private

placement exemption under Section 4(2) of the Securities Act,61

render Regulation B obsolete?

\61\ 15 U.S.C. 77d(2).

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2. Regulation F (Rules 651-656) and Accompanying Form 1-F

Regulation F provides a conditional limited exemption from

Securities Act registration for assessments levied on assessable stock

and for resales of forfeited assessable stock. The Commission

promulgated Regulation F in 1959 62 at the same time that it

enacted Securities Act Rule 136.63 Rule 136(c) defines

``assessable stock'' to mean ``stock which is subject to resale by the

issuer * * * in the event of a failure of the holder of such stock to

pay any assessment levied thereon.'' Thus, assessable stock is stock,

the purchase of which triggers an annual obligation to pay an amount,

termed an ``assessment,'' to the issuer in addition to the original

offering price. If the buyer fails to pay the levied assessment after

receiving a notice of delinquency from the issuer, the issuer can

reclaim the original stock and resell it, usually at an auction.

\62\ Release No. 33-4121 (July 30, 1959) [24 FR 6385].

\63\ 17 CFR 230.136.

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Under Rule 136, both the levying of an assessment on assessable

stock and the resale of forfeited assessable stock constitute the

issuance of securities, which trigger registration requirements under

the Act. Regulation F establishes a partial conditional exemption from

registration for these transactions. In order to qualify for the

exemption, a company must be incorporated or have its principal

business operations in the United States. In addition, a company cannot

claim more than $300,000 in exempted assessable stock transactions for

any one calendar year. Form 1-F requires disclosure of pertinent

information about the issuer; its 10% beneficial stockholders; its

directors and officers; its levied assessments, resales of forfeited

assessable stock, and other unregistered securities issued during the

preceding year; and its current proposed assessments or resales of

forfeited assessable stock.

It appears that only two types of companies have issued assessable

stock: mining companies and water extraction/delivery companies, also

known as mutual water companies. Since the promulgation of Regulation

F, approximately 40 such companies have filed a total of 234 1-F forms.

Most of these filings occurred between 1967 and 1982. Only 32 Form 1-F

filings have occurred between 1983 and 1995. Ten companies were

responsible for those filings. Since 1992, only three companies have

filed a total of 10 1-F forms with the Commission.

One reason for the recent steady decline of Form 1-F filings

appears to be the availability of more beneficial limited offering

exemptions, particularly the Rule 504 exemption. In 1982, the

Commission adopted its first version of Rule 504. Following that year,

the annual number of Form 1-F submissions steadily decreased from 9 in

1982, to 6 in 1983, 3 in 1984, 0 in 1985 and 1986, and an average

filing rate of 2-3 for the years 1987 to 1995. Virtually all Regulation

F companies have been non-reporting companies. Accordingly, such

companies are eligible to claim a Rule 504 exemption.

Comment is requested as to whether Regulation F (and accompanying

schedules and forms) continues to be

[[Page 9850]]

useful to investors and issuers. Does the availability of other

exemptions, such as the limited offering exemption from registration

set forth in Regulation D, or the private placement exemption under

Section 4(2) of the Securities Act, render Regulation F obsolete?

3. Securities Act Rule 148

Rule 148 was originally designed to be a counterpart to Rule 144

and, as such, to provide a safe harbor for the resales of certain

categories of securities acquired in bankruptcy proceedings. Included

in these categories are securities issued under the Federal Bankruptcy

Act, portfolio securities sold under the Securities Investors

Protection Act (SIPA), and issuances of debtor securities in

circumstances where the Federal Deposit Insurance Corporation (FDIC)

has been appointed receiver of the debtor's assets.

In 1978, the Bankruptcy Act was repealed and replaced with the

Bankruptcy Code, which provides an exemption from Securities Act

registration as well as a safe harbor for the resales of securities

received under a plan of reorganization. Through no-action letters, the

Commission has taken the position that Rule 148 is applicable only to

resales of securities that were issued under the repealed Bankruptcy

Act, but not to resales of securities under the 1978 Bankruptcy Code.

Comment is requested as to whether Rule 148 continues to serve a

useful purpose (e.g., in connection with securities sold under the SIPA

and/or where the FDIC has been appointed receiver of the debtor's

assets). Commenters also should consider whether the rule be retained

for securities issued under the repealed Bankruptcy Act.

4. Securities Act Rules 445, 446, and 447

The Task Force has recommended that the Commission eliminate Rules

445, 446 and 447, which govern registration statements filed in

connection with securities to be offered through competitive bidding

(e.g., by means of a solicitation of competitive proposals from

underwriters). These rules were put into place in the late 1940s

principally to accommodate registered public utility holding companies

and their subsidiaries (``registered holding companies''). These

companies were subject to Rule 50 under the Public Utility Holding

Company Act of 1935 (``PUHCA''), which required that their securities

be sold through competitive bids.

Rules 445, 446 and 447 appear to be rarely used at present. A

review of Commission filings shows that there was only one competitive

bid filing in 1994, and no competitive bid filings in 1995. One reason

for the lack of filings under these rules may be that, beginning in

1982, the Commission began to relax the restrictive bidding

requirements of PUHCA Rule 50 in recognition of the fact that these

procedures often precluded registered holding companies from obtaining

the benefits of the Securities Act Rule 415 shelf registration

procedure, placing them at a disadvantage compared to other issuers in

getting access to the capital markets on short notice. In 1994, the

Commission determined that competitive bidding was no longer necessary

to prevent abuses in the issuance and sale of securities by these

companies and rescinded Rule 50.\64\

\64\ Release No. 35-26031 (April 20, 1994) [59 FR 21922].

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Comment is requested as to whether Rules 445, 446, and 447 continue

to be useful in capital raising transactions. Comment also is requested

as to whether other Commission rules, such as Rule 430A (which

eliminates the need for alternative prospectus cover pages),\65\ are

adequate to accommodate the distribution of securities through today's

competitive bidding practices.

\65\ 17 CFR 230.430A.

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5. Securities Act Rule 494

Rule 494 was adopted in 1951 to accommodate a then common practice

of advertising securities issued by foreign national governments.\66\

The rule limits such ``newspaper prospectuses'' for foreign government

securities to advertisements appearing in newspapers, magazines and

other periodicals that are distributed by second class mail. However,

the practice appears to have fallen into disuse.

\66\ Release No. 33-3425 (August 27, 1951) [16 FR 8820].

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Comment is requested as to whether Rule 494 continues to serve a

useful purpose. Should this rule be retained, in whole or in part, in

light of contemporary practices relating to offerings of foreign

government securities?

B. Exchange Act Rules

1. Paragraph (c) of Exchange Act Rule 16b-1

This rule exempts the acquisition of securities resulting from a

reorganization of a railroad or other carrier approved by the

Interstate Commerce Commission (``ICC''), an agency that was abolished

as of January 1, 1996. The function of approving such reorganizations

has now been transferred to the Surface Transportation Board, an

independent agency of the Department of Transportation.

Comment is requested as to whether the exemption provided by this

rule continues to serve a useful purpose. In addition, comment is

solicited as to whether the exemption provided by this rule should

continue to be administered by the Surface Transportation Board, as

ICC's successor, or whether it should be treated similarly to the other

Section 16(b) exemptive provisions that are administered by the

Commission.

2. Exchange Act Rule 16b-4

Rule 16b-4 provides an exemption from the requirements of Section

16(b) for certain holding company redemption transactions. There appear

to be few situations where a holding company owns securities in only

one company and desires to exchange its own shares through a redemption

for those of such company, and there appear to be few, if any,

situations in which the rule is invoked.

Commenters should address whether the exemption provided by this

rule has been invoked with any degree of frequency. Comment is also

requested as to whether the rule generally serves a useful purpose, and

should be retained in whole or in part; if retained, for what purpose.

C. Disclosure Requirements

1. Item 501(b) of Regulation S-K

Item 501(b) of Regulation S-K currently requires that registrants

provide a cross-reference sheet immediately following the facing page

in prospectuses, showing the location of the information required to be

included in response to the items in the form. This cross-reference

sheet requirement is in addition the Regulation S-K Item 502(g)

provision that registrants include a reasonably detailed table of

contents.\67\ In light of the table of contents requirement, the

Commission proposes to eliminate the cross-reference sheet requirement.

\67\ References to the cross reference sheet would be deleted

from Securities Act Rule 472.

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Comment is requested as to whether the table of contents provides

an adequate road map to the prospectus so that the cross-reference

sheet could be eliminated entirely. Commenters who object to total

elimination should specify how the cross-reference sheet should be

modified to reflect their concerns.

[[Page 9851]]

2. Item 501(c)(8) of Regulation S-K \68\

This proposed revision, which eliminates a red ink requirement for

the required prospectus caption ``Subject to Completion'', would

conform the requirements of Regulation S-K with those of Regulation S-

B, which has no requirements relating to the color of the caption.

Comment is solicited on whether the color of the caption serves a

significant purpose.

\68\ 17 CFR 229.501(c)(8).

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3. Exhibits

The Commission proposes to delete the following from the required

list of exhibits in Regulation S-K and Regulation S-B \69\ because the

information in each such exhibit either appears to be infrequently used

or is otherwise available. The specific exhibits proposed to be

eliminated are: Opinion regarding discount on capital shares (Exhibit

6); \70\ Opinion regarding liquidation preference (Exhibit 7);

Statement regarding computation of per share earnings (Exhibit 11);

Material foreign patents (Exhibit 14); and Information from reports

furnished to state insurance regulatory authorities (Exhibit 28).\71\

\69\ Item 601(b) of Regulation S-B and Regulation S-K.

\70\ This exhibit currently is not required in Regulation S-B;

consequently, no change is necessary.

\71\ Regulation S-T Rule 311(c), providing that exhibits filed

by electronic filers pursuant to paragraph (b)(28) may be filed in

paper under cover of Form SE [17 CFR 239.64, 249.444, 269.8] would

be eliminated.

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Comment is solicited on whether any of these exhibits provides

information material to investors and other market participants. Does

the statement regarding computation of per share earnings provide

useful information not otherwise provided in Commission filings?

Commenters should address whether the availability of foreign patent

documentation or documents filed with insurance regulators is

sufficient, or whether they should continue to be filed with securities

disclosure documents.

4. Industry Guide 1

Guide 1 requires disclosure of the principal sources of electric

and gas revenues and the classes of services offered by the registrant

in certain registration statements as well as annual reports on Form

10-K. In addition, if equity securities are being registered and will

be issued at a price below book value per share, Guide 1 requires

disclosure of the effects, if any, on the registrant's business of

issuing such shares at a price below the underlying book value per

share. The Commission proposes to eliminate Guide 1 because the

information requested by the Guide also appears to be within the

coverage of other rules of the Commission, including Items 101 and 303

of Regulation S-K.\72\

\72\ 17 CFR 229.101 and 229.303, respectively.

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Comment is requested on whether any aspect of the information

required by Guide 1 is not furnished by affected issuers pursuant to

other Commission rules, and if not, whether maintaining a separate

Guide 1 would be necessary or appropriate and in the interests of

investors.

D. Forms

1. Form 701

The Commission proposes to delete expired Form 701 (Notice of sales

pursuant to an exemption under Section 701) and the rules that required

its filing (Securities Act Rules 702(T) and 703(T)) in order to remove

them from the Code of Federal Regulations. By their terms, Rules 702(T)

and 703(T), and thus Form 701, were effective only until 1993.

Commenters who believe that this form should be re-instated should

provide specific reasons as to the bases for their views.

2. Form F-6

Commission is proposing to eliminate Items 3(e) and 4(a) of Form F-

6, governing the registration of depositary shares evidenced by

American Depositary Receipts (``ADRs''), because the elicited

information appears to be of little use to investors or the marketplace

at large.

Item 3(e) of Form F-6 requires the registrant to include, as an

exhibit, the name of each dealer known to the registrant who has

deposited shares against issuance of ADRs, proposes to deposit shares

or participated in a plan to deposit shares, within the past six

months. Under Item 4(a) of Form F-6, a registrant must undertake to

provide semi-annual updated information generally concerning dealers

depositing shares in the facility and the number of shares issued/

cancelled during the covered period. However, because the base number

of outstanding shares is not normally publicly available, the

information regarding semi-annual adjustments to that number appears to

be of little use.

Comment is requested as to whether any information provided by Item

3(e) or 4(a) serves any useful purpose, whether to the issuers of the

underlying shares (particularly where the ADR facility is unsponsored),

ADR purchasers, or the markets in which these securities are traded.

3. Form 10-C

The Commission proposes to eliminate Form 10-C and Rules 13a-17 and

15d-17, which require issuers registered under the Exchange Act and

quoted in Nasdaq to report changes in corporate name to the Commission

and the NASD, or an aggregate increase or decrease of a class of

securities outstanding that exceeds 5% of the amount of securities of

the class outstanding. In proposing the elimination of this form, the

Commission notes that the information regarding changes in number of

shares outstanding typically is reflected in an issuer's financial

statements. Comment is requested as to whether the Form 10-C provides

material information not otherwise provided. Commenters who favor

retention of Form 10-C should be specific with respect to the reasoning

for their position.

III. Financial Disclosure

The Commission also proposes to implement certain of the

recommendations in the Task Force Report relating to accounting

disclosure rules, as set forth below. These rules were identified as

being largely duplicative of generally accepted accounting principles

(``GAAP'') or other Commission rules. Accordingly, maintaining separate

Commission rules would appear unnecessary.

The proposed changes are not intended to alter current accounting

standards or disclosure practices. Comment is requested on whether any

of the proposed changes would have the effect of altering current

accounting standards or disclosure practices, and if so, how.

1. Rule 3-16 of Regulation S-X

Rule 3-16(a) of Regulation S-X sets forth the requirement that a

registrant, which has emerged from a significant reorganization,

disclose in its financial statements a brief explanation of such

reorganization. In addition, if the registrant is about to emerge from

a reorganization, Rule 3-16(b) of Regulation S-X requires a balance

sheet giving effect to the plan of reorganization with separate

presentation of the registrant's balance sheet before the

reorganization, the changes to be effected in the reorganization, and

the balance sheet of the registrant after the reorganization.

Registrants have historically satisfied the requirements of Rule 3-

16(b) with pro forma financial information.

[[Page 9852]]

In November 1990, the AICPA issued SOP 90-7, ``Financial Reporting

by Entities in Reorganization Under the Bankruptcy Code,'' which

prescribes the accounting and financial statement presentation for

entities in bankruptcy reorganization and for entities which have

emerged from bankruptcy. ARB 43, Section 210 of the Financial Reporting

Codification, and SAB Topic 5:S prescribes the accounting and financial

statement disclosures for quasi-reorganizations. Further, Article 11 of

Regulation S-X requires pro forma financial information whenever

consummation of events or transactions occurs or is probable and for

which disclosure of pro forma financial information would be material

to investors.

The Commission proposes to eliminate Rule 3-16 of Regulation S-X

because the information requested by that Rule also appears to be

within the scope of Article 11 and the disclosure requirements of the

other accounting literature discussed above. Comment is requested on

whether there are any reorganizations within the scope of Rule 3-16

which would be outside the scope of SOP 90-7, ARB 43, Section 210 of

the Financial Reporting Codification, and SAB 78 [SAB Topic 5:S], for

which disclosure of the information required by Rule 3-16 would be

material to investors. In addition, comment is requested on whether the

information required by Rule 3-16 would be required to be disclosed in

whole or in part by the items discussed above, and if so, whether

maintaining a separate rule is necessary or appropriate to ensure full

and fair disclosure.

2. Rule 4-05 of Regulation S-X

The Commission proposes to eliminate Rule 4-05 of Regulation S-X,

relating to current assets and current liabilities when a company's

operating cycle is longer than one year, because Chapter 3A of ARB 43

and current accounting practices, requires the same presentation and

information. Comment is requested on whether there would be any

material loss of information in financial statements if Rule 4-05 of

Regulation S-X were to be eliminated.

3. Rule 4-06 of Regulation S-X

The Commission proposes to eliminate Rule 4-06 of Regulation S-X,

which currently provides that reacquired indebtedness of a registrant

must be deducted from the appropriate liability caption on the

registrant's balance sheet. This rule is believed by some to be

unnecessary because GAAP, including APB 26 and SFAS 76, requires that

such items be considered extinguished and deducted from the appropriate

caption on the balance sheet. Further, with respect to the provisions

of Rule 4-06 relating to reacquired indebtedness held for pension and

other special funds, SFAS 87 and SFAS 106 prescribe the definition of,

and accounting for, plan assets for pension plans and other post

employment benefit plans, which are treated as issuer liabilities.

Comment is requested on whether maintaining a separate Commission

Rule 4-06 is necessary or appropriate in light of applicable GAAP, and

the needs of users of registrant financial statements.

4. Rule 4-10 of Regulation S-X

The requirements of the successful efforts accounting method

followed by oil and gas producers are set forth in paragraphs (b)

through (h) of Rule 4-10 of Regulation S-X. As a result of the

Commission's action to supersede the FASB's determination to designate

successful efforts as the method of accounting to be applied uniformly

by all oil and gas producers,\73\ specific rules for both the

successful efforts and full cost accounting methods were maintained in

Regulation S-X.

\73\ Accounting Series Release No. 253 (August 31, 1978) [43 FR

40688].

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The successful efforts method of accounting codified into Rule 4-10

appears to be duplicative of the accounting standards adopted by the

FASB in SFAS 19. Because of such duplication, the Commission proposes

to eliminate the portions of Rule 4-10 which duplicate SFAS 19--

paragraph (b) through (h) of the Rule. Comment is requested on whether

there are any significant differences between paragraphs (b) through

(h) of Rule 4-10 and the requirements of SFAS 19 and, if not, whether

maintaining separate Commission rules is necessary or appropriate.

IV. Miscellaneous Minor and Technical Changes

The Commission proposes to make the following technical changes to

certain rules and forms under the Securities Act and the Exchange Act.

Comment is sought on the necessity or appropriateness of each of the

proposed changes.

Correct a number of out-of-date cross references in

certain Securities Act rules and forms.\74\

\74\ Proposed amendments to Rule 406, 464 and 473 of Regulation

C and Forms F-7, F-8, F-9, F-10 and F-80.

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

Allow the addition or withdrawal of a delaying notation

under Regulation A \75\ or the filing of a delaying or other amendment

under Rule 473 \76\ by facsimile transmission, so as to provide issuers

with additional flexibility in filing documents with the Commission.

\75\ Proposed amendment to 17 CFR 230.252(h)(2).

\76\ 17 CFR 230.473.

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Modify and clarify signature requirements to allow manual,

typed, duplicated or faxed signatures on paper filings, with a manual

signature retention requirement for typed, duplicated or faxed

signatures.\77\ This proposal would clarify existing rules, as well as

extend to paper filers the option of filing typed signature pages, thus

providing comparable treatment to both paper and electronic filers.\78\

The proposed language would retain the five-year manual signature

retention requirement of Regulation S-T Rule 302(b). Comment is

requested specifically as to whether the five-year retention period is

necessary, or whether all signature retention requirements, including

those in Regulation S-T, should be reduced to a shorter period, such as

three or four years.

\77\ Proposed amendments to Rule 402 and 471 of Regulation C,

and Exchange Act Rules 12b-11, 14d-1 and 16a-3.

\78\ See Rule 302 of Regulation S-T [17 CFR 232.302].

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

Revise provisions in Rule 406 of Regulation C and Exchange

Act Rule 24b-2 to emphasize the fact that confidential treatment

requests should not be submitted electronically, but rather, should be

submitted in paper. This is intended to minimize the chances of a

confidential document being erroneously submitted as part of a public

filing.

Modify Rule 504 of Regulation D \79\ so that the rule

itself states that there is no information delivery requirement in

connection with Rule 504 offerings. This is intended to eliminate

confusion resulting from the current language of Regulation D.

\79\ Proposed amendment to 17 CFR 230.504.

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Update the Regulation S definition of ``Designated

Offshore Securities Market'' to include markets that have been

recognized as such by the Division of Corporation Finance pursuant to

delegated authority since the adoption of the regulation.\80\

\80\ Proposed amendment to Rule 902 of Regulation S.

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Eliminate provisions exempting small life and mutual life

insurance companies from filing quarterly financial results on Form 10-

Q and Form 10-QSB.\81\ The exemption for small life insurance companies

expired

[[Page 9853]]

by its terms on December 20, 1983, and the exemption for mutual life

companies was meant to track the small life insurance companies

exemption.

\81\ Proposed amendment to Exchange Act Rules 13a-13 and 15d-16.

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

Eliminate a general instruction to Form 10-K \82\

referring to filings on Form S-18, which form was replaced by other

small business forms in 1992.

\82\ General Instruction I.

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

V. General Request for Comment

Any interested persons wishing to submit comment on any of the

proposals set forth in this release, are invited to do so by submitting

them in triplicate to Jonathan G. Katz, Secretary, U.S. Securities and

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

Comments also may be submitted electronically at the following E-mail

address: [email protected]. All comment letters should refer to

File Number S7-6-96; this file number should be included on the subject

line if E-mail is used. Comment is specifically requested as to whether

any of the rules or forms that have been proposed to be eliminated

provide disclosure that is material to investors, issuers or other

market participants, the states or any other entity. Comment also is

requested on any competitive burdens that might result from the

adoption of any of the proposals. All comments will be considered by

the Commission in complying with its responsibility under Section 23(a)

of the Exchange Act.\83\ Comments received will be available for public

inspection and copying in the Commission's public reference room, 450

Fifth Street, N.W., Washington, D.C. 20549. Electronically submitted

comment letters will be posted on the Commission's Internet web site

(http://www.sec.gov).

\83\ 15 U.S.C. 78w(a).

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VI. Cost-Benefit Analysis

Commenters are requested to provide their views and data relating

to any costs and benefits associated with these proposals to aid the

Commission in its evaluation of the costs and benefits that may result

from the changes proposed in this release. It is anticipated that these

proposals will benefit those with filing obligations by simplifying or

clarifying current rules and by eliminating rules and forms that are

outdated or rarely used for other reasons. No detrimental effects to

investors are expected. However, it is not believed that the changes

outlined herein will affect significantly the overall costs and burdens

associated with filing requirements generally.

VII. Summary of Initial Regulatory Flexibility Analysis

An initial regulatory flexibility analysis has been prepared in

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

analysis notes that the amendments are to eliminate certain rules and

forms and make minor revisions to the Commission's rules to correct or

modernize them.

As discussed more fully in the analysis, the proposals would affect

persons that are small entities, as defined by the Commission's rules.

It is not expected that increased reporting, recordkeeping and

compliance burdens would result from the changes. 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, several possible significant

alternatives to the proposals were considered, including, among others,

establishing different compliance or reporting requirements for small

entities or exempting them from all or part of the proposed

requirements. As discussed more fully in the analysis, the nature of

these amendments do not lend themselves to separate treatment, nor

would they impose additional burdens on small business issuers.

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 amendments are

adopted. A copy of the analysis may be obtained by contacting James R.

Budge, Office of Disclosure Policy, Division of Corporation Finance,

Mail Stop 3-7, 450 Fifth Street, N.W., Washington, D.C. 20549.

VIII. Paperwork Reduction Act

The staff has consulted with the Office of Management and Budget

(``OMB'') and has submitted the proposals for review in accordance with

the Paperwork Reduction Act of 1995 (``the Act'')(44 U.S.C. 3501 et

seq.). It is anticipated that the proposals to eliminate certain

exhibits from Item 601(b) of Regulations S-K and S-B 84 would

reduce the existing information collection requirements that are

associated with the forms identified in the exhibit tables in those

regulations. The net reduction for all affected information collection

requirements would be an estimated 62,663 hours, or about .3% of the

total burden hours associated with current requirements.

\84\ The titles of the affected information collection

requirements are ``Regulation S-K'' and ``Regulation S-B.''

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

With respect to the proposal to eliminate certain requirements

within Form F-6,85 the supporting statement indicates that

registrants no longer would be required to furnish the name of each

dealer known to it or depositary who: 1) has deposited shares against

the issuance of ADRs within the past six months, 2) proposes to deposit

shares against issuance of ADRs, or 3) assisted or participated in the

creation of the plan of the issuance of the ADRs or the selection of

the deposited securities. This proposal would reduce the total

information burden of affected registrants (currently 339 hours) by

approximately .1 hour per submission, for a total reduction of 33.9

hours for all submissions.

\85\ This information collection is entitled ``Form F-6.''

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The Commission solicits comment: concerning whether the proposed

change in collection of information is necessary; on the accuracy of

the Commission's estimate of the burden of the proposed changes to the

collection of information; on the quality, utility and clarity of the

information to be collected; and whether 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, may be minimized.

Persons desiring to submit comments on the collection of

information requirements should direct them 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 also send a copy of their comments to Jonathan

G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth

Street, N.W., Washington, D.C. 20549, with reference to File No. S7-6-

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, so a comment to OMB is best assured of having its full

effect if OMB receives it within 30 days of publication.

IX. Statutory Basis for the Proposals

The foregoing amendments are proposed pursuant to Sections 6, 7, 8,

10 and 19(a) of the Securities Act, Sections 3, 12, 13, 14, 15(d),

23(a) and 35A of the Exchange Act.

[[Page 9854]]

List of Subjects in 17 CFR Parts 210, 228, 229, 230, 232, 239, 240, and

249

Accountants, Confidential business information, Registration

requirements, Reporting and recordkeeping requirements, Securities.

Text of the Proposals

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

of Federal Regulations is proposed to be amended as follows:

PART 210--FORM AND CONTENT OF AND REQUIREMENTS FOR FINANCIAL

STATEMENTS, SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF

1934, PUBLIC UTILITY HOLDING COMPANY ACT OF 1935, INVESTMENT

COMPANY ACT OF 1940, AND ENERGY POLICY AND CONSERVATION ACT OF 1975

1. The authority citation for Part 210 continues to read as

follows:

Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77aa(25),

77aa(26), 78l, 78m, 78n, 78o(d), 78w(a), 78ll(d), 79e(b), 79j(a),

79n, 79t(a), 80a-8, 80a-20, 80a-29, 80a-30, 80a-37, unless otherwise

noted.

Sec. 210.3-16 [Removed and reserved]

2. By removing and reserving Sec. 210.3-16.

Sec. 210.4-05 [Removed and reserved]

3. By removing and reserving Sec. 210.4-05.

Sec. 210.4-06 [Removed and reserved]

4. By removing and reserving Sec. 210.4-06.

Sec. 210.4-10 [Amended]

5. By amending Sec. 210.4-10 by removing the heading preceding

paragraph (b), removing paragraphs (b) through (h) and redesignating

paragraphs (i) and (j) as paragraphs (b) and (c).

PART 228--INTEGRATED DISCLOSURE SYSTEM FOR SMALL BUSINESS ISSUERS

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

follows:

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

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

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

11, unless otherwise noted.

Sec. 228.60 [Amended]

7. By amending Sec. 228.601 (Item 601 of Regulation S-B) in the

exhibit table, by removing and reserving exhibit numbers (7), (11),

(14), and (28), and by removing and reserving paragraphs (b)(7),

(b)(11), (b)(14), and (b)(28).

PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES

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

CONSERVATION ACT OF 1975--REGULATION S-K

8. The authority citation continues to read in part as follows:

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

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

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

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

* * * * *

Sec. 229.501 [Amended]

9. By amending Sec. 229.501 (Item 501 Regulation S-K) by removing

paragraph (b), redesignating paragraph (c) as paragraph (b), and in

newly designated paragraph (b)(8) by removing the words ``, in red

ink''.

Sec. 229.601 [Amended]

10. By amending Sec. 229.601 (Item 601 of Regulation S-K) in the

exhibit table, by removing and reserving exhibit numbers (6), (7),

(11), (14) and (28), and by removing and reserving paragraphs (b)(6),

(b)(7), (b)(11), (b)(14) and (b)(28). .

Secs. 229.801 and 229.802 [Amended]

11. By amending Sec. 229.801 and Sec. 229.802 by removing and

reserving paragraph (a) in both sections, and by removing Industry

Guide 1.

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

12. The authority citation for Part 230 continues to read in part

as follows:

Authority: 15 U.S.C. 77b, 77f, 77g, 77h, 77j, 77s, 77sss, 78c,

78d, 78l, 78m, 78n, 78o, 78w, 78ll(d), 79t, 80a-8, 80a-29, 80a-30,

and 80a-37, unless otherwise noted.

* * * * *

Sec. 230.148 [Removed and reserved]

13. By removing and reserving Sec. 230.148.

14. By amending Sec. 230.252 by revising paragraph (h)(2) to read

as follows:

Sec. 230.252 Offering statement.

* * * * *

(h) Amendments.

(1) * * *

(2) An amendment to include a delaying notation pursuant to

paragraph (g)(2) or to remove one pursuant to paragraph (g)(3) of this

section after the initial filing of an offering statement may be made

by telegram, letter or facsimile transmission. Each such telegraphic

amendment shall be confirmed in writing within a reasonable time by

filing a signed copy. Such confirmation shall not be deemed an

amendment.

Secs. 230.300-230.346 [Removed and reserved]

15. By removing the undesignated center heading--Regulation B--and

removing and reserving Secs. 230.300 through 230.346 (Regulation B)

(The undesignated center heading ``Attention Electronic Filers'' and

the paragraph immediately following remain unchanged).

16. By amending Sec. 230.402 by removing the word ``manually'' from

the fourth sentence of paragraph (a), and from the fourth sentence of

paragraph (c), and by revising paragraph (e) to read as follows:

Sec. 230.402 Number of copies; binding; signatures.

* * * * *

(e) Signatures. Where the Act or the rules thereunder, including

paragraphs (a) and (c) of this section, require a document filed with

or furnished to the Commission to be signed, such document shall be

manually signed, or signed using either typed signatures or duplicated

or facsimile versions of manual signatures. Where typed, duplicated or

facsimile signatures are used, each signatory to the filing shall

manually sign a signature page or other document authenticating,

acknowledging or otherwise adopting his or her signature that appears

in the filing. Such document shall be executed before or at the time

the filing is made and shall be retained by the registrant for a period

of five years. Upon request, the registrant shall furnish to the

Commission or its staff a copy of any or all documents retained

pursuant to this section.

17. By amending Sec. 230.406 by revising the heading ``Preliminary

Note'' to read ``Preliminary Notes'', by designating the preliminary

note as preliminary note 1, adding preliminary note 2, removing from

paragraph (a) the words ``or on Form F-4 (Sec. 239.34 of this chapter)

complying with General Instruction F of that Form'', and removing

paragraph (j) to read as follows:

Sec. 230.406 Confidential treatment of information filed with the

Commission.

Preliminary Notes: (1) * * *

(2) All confidential treatment requests shall be submitted in paper

format only, whether or not the filer is an electronic filer. See Rule

101(c)(1)(i) of Regulation S-T (Sec. 232.101(c)(1)(i) of this chapter).

* * * * *

[[Page 9855]]

Secs. 230.445-230.447 [Removed and reserved]

18. By removing the undesignated center heading Competitive Bids

and removing and reserving Secs. 230.445 through 230.447.

Sec. 230.464 [Amended]

19. By amending Sec. 230.464 by revising the heading to read

``Effective date of post-effective amendments to registration

statements filed on Form S-8 and on certain Forms S-3, S-4, F-2 and F-

3.'' and by removing from the introductory text the words ``or on Form

F-4 (Sec. 239.34 of this chapter) that there is continued compliance

with General Instruction F of that Form'' and from paragraph (b) the

words ``or a Form F-4 registration statement complying with General

Instruction F of that Form''.

20. By amending Sec. 230.471 by designating the text as paragraph

(a) and adding paragraph (b) to read as follows:

Sec. 230.471 Signatures to amendments.

(a) * * *

(b) Where the Act or the rules thereunder require a document filed

with or furnished to the Commission to be signed, such document shall

be manually signed, or signed using either typed signatures or

duplicated or facsimile versions of manual signatures. Where typed,

duplicated or facsimile signatures are used, each signatory to the

filing shall manually sign a signature page or other document

authenticating, acknowledging or otherwise adopting his or her

signature that appears in the filing. Such document shall be executed

before or at the time the filing is made and shall be retained by the

registrant for a period of five years. Upon request, the registrant

shall furnish to the Commission or its staff a copy of any or all

documents retained pursuant to this section.

21. By amending Sec. 230.472 by revising the second sentence of

paragraph (b) to read as follows:

Sec. 230.472 Filing of amendments; number of copies.

* * * * *

(b) * * * Each such copy of the amended prospectus shall be

accompanied by a copy of the cross reference sheet required by Rule

481(a) (Sec. 230.481(a)), where applicable, if the amendment of the

prospectus resulted in any change in the accuracy of the cross

reference sheet previously filed. * * *

* * * * *

22. By amending Sec. 230.473 by revising the second sentence of

paragraph (c) and by removing from paragraph (d) the words ``or on Form

F-4 (Sec. 239.34 of this chapter) complying with General Instruction F

of that Form'' to read as follows:

Sec. 230.473 Delaying amendments.

* * * * *

registration statement, any amendment altering the proposed date of

public sale of the securities being registered, or any amendment filed

pursuant to paragraph (b) of this section may be made by telegram,

letter or facsimile transmission. * * *

* * * * *

Sec. 230.494 [Removed and reserved]

23. By removing and reserving Sec. 230.494.

24. By amending Sec. 230.504 by revising paragraph (b)(1) to read

as follows:

Sec. 230.504 Exemption for limited offerings and sales of securities

not exceeding $1,000,000.

* * * * *

(b) Conditions to be met. (1) To qualify for exemption under this

Sec. 230.504, offers and sales must satisfy the terms and conditions of

Secs. 230.501 and 230.502(a).

* * * * *

Secs. 230.651-230.656 [Removed and reserved]

25. By removing the undesignated center heading and by removing and

reserving Secs. 230.651 through 230.656 (Regulation F).

Sec. 230.702 [Amended]

26. By removing Sec. 230.702(T).

Sec. 230.703 [Amended]

27. By removing Sec. 230.703(T).

Sec. 230.902 [Amended]

28. By amending Sec. 230.902 at the end of paragraph (a)(1) before

the word ``and'', add the words ``the Helsinki Stock Exchange; the

Alberta Stock Exchange; the Oslo Stock Exchange; the Mexico Stock

Exchange; and the Istanbul Stock Exchange;''.

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

ELECTRONIC FILINGS

29. The authority citation for Part 232 continues to read as

follows:

Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 77sss(a),

78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll, 79t(a), 80a-8, 80a-29,

80a-30 and 80a-37.

Sec. 232.311 [Amended]

30. By amending Sec. 232.311 by removing paragraph (c) and

redesignating paragraphs (d) through (i) as paragraphs (c) through (h).

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

31. The authority citation for Part 239 continues to read in part

as follows:

Authority: 15 U.S.C. 77f, 77f, 77h, 77j, 77s, 77sss, 78c, 78l,

78m, 78n, 78o(d), 78w(a), 78ll(d), 79e, 79f, 79g, 79j, 79l, 79m,

79n, 79q, 79t, 80a-8, 80a-29, 80a-30 and 80a-37, unless otherwise

noted.

* * * * *

32. By amending Form F-6 (referenced in Sec. 239.36) by removing

Items 3(e) and 4(a) and by redesignating Item 3(f) as Item 3(e) and

Items 4(b) and 4(c) as Items 4(a) and 4(b).

[Note: The text of Form F-6 does not, and the amendments thereto

will not, appear in the Code of Federal Regulations.]

Sec. 239.37 [Amended]

33. By amending Form F-7 (referenced in Sec. 239.37) in Part I,

Item 3 by removing the words ``Rule 24 of the Commission's Rules of

Practice'' from the second sentence and inserting ``Item 10(d) of

Regulation S-K'' in its place.

[Note: The text of Form F-7 does not, and the amendments thereto

will not, appear in the Code of Federal Regulations.]

Sec. 239.38 [Amended]

34. By amending Form F-8 (referenced in Sec. 239.38) in Part I,

Item 3 by removing the words ``Rule 24 of the Commission's Rules of

Practice'' from the second sentence and inserting ``Item 10(d) of

Regulation S-K'' in its place.

[Note: The text of Form F-8 does not, and the amendments thereto

will not, appear in the Code of Federal Regulations.]

Sec. 239.39 [Amended]

35. By amending Form F-9 (referenced in Sec. 239.39) in Part I,

Item 3 by removing the words ``Rule 24 of the Commission's Rules of

Practice'' from the second sentence and inserting ``Item 10(d) of

Regulation S-K'' in its place.

[Note: The text of Form F-9 does not, and the amendments thereto

will not, appear in the Code of Federal Regulations.]

Sec. 239.40 [Amended]

36. By amending Form F-10 (referenced in Sec. 239.40) in Part I,

Item 4 by removing the words ``Rule 24 of the Commission's Rules of

Practice'' from the second sentence and inserting ``Item 10(d) of

Regulation S-K'' in its place.

[Note: The text of Form F-10 does not, and the amendments

thereto will not, appear in the Code of Federal Regulations.]

Sec. 239.41 [Amended]

37. By amending Form F-80 (referenced in Sec. 239.41) in Part I,

Item 3

[[Page 9856]]

by removing the words ``Rule 24 of the Commission's Rules of Practice''

from the second sentence and inserting ``Item 10(d) of Regulation S-K''

in its place.

[Note: The text of Form F-80 does not, and the amendments

thereto will not, appear in the Code of Federal Regulations.]

Sec. 239.101 [Removed and reserved]

38. By removing and reserving Sec. 239.101 and by removing

Schedules A, B, C, D and Forms 1-G and 3-G referenced in that section.

Sec. 239.300 [Removed and reserved]

39. By removing and reserving Sec. 239.300 and by removing Form 1-

Sec. 239.701 [Removed and reserved]

40. By removing and reserving Sec. 239.701 and by removing Form

701.

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

1934

41. 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.

* * * * *

42. By amending Sec. 240.12b-11 by removing the word ``manually''

from paragraph (b) and by revising paragraph (d) to read as follows:

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

* * * * *

(d) Signatures. Where the Act or the rules, forms, reports or

schedules thereunder, including paragraph (b) of this section, require

a document filed with or furnished to the Commission to be signed, such

document shall be manually signed, or signed using either typed

signatures or duplicated or facsimile versions of manual signatures.

Where typed, duplicated or facsimile signatures are used, each

signatory to the filing shall manually sign a signature page or other

document authenticating, acknowledging or otherwise adopting his or her

signature that appears in the filing. Such document shall be executed

before or at the time the filing is made and shall be retained by the

filer for a period of five years. Upon request, the filer shall furnish

to the Commission or its staff a copy of any or all documents retained

pursuant to this section.

43. By amending Sec. 240.13a-13 by revising the section heading and

paragraph (c) to read as follow:

Sec. 240.13a-13 Quarterly reports on Form 10-Q and Form 10-QSB

(Sec. 249.308a and Sec. 249.308b of this Chapter).

* * * * *

need not be filed by mining companies not in the production stage but

engaged primarily in the exploration for the development of mineral

deposits other than oil, gas or coal, if all of the following

conditions are met:

(1) The registrant has not been in production during the current

fiscal year or the two years immediately prior thereto; except that

being in production for an aggregate period of not more than eight

months over the three-year period shall not be a violation of this

condition.

(2) Receipts from the sale of mineral products or from the

operations of mineral producing properties by the registrant and its

subsidiaries combined have not exceeded $500,000 in any of the most

recent six years and have not aggregated more than $1,500,000 in the

most recent six fiscal years.

* * * * *

Sec. 240.13a-17 [Removed and reserved]

44. By removing and reserving Sec. 240.13a-17.

45. By amending Sec. 240.14d-1 by revising paragraph (d) to read as

follows:

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

and 14E.

* * * * *

(d) Signatures. Where the Act or the rules, forms, reports or

schedules thereunder require a document filed with or furnished to the

Commission to be signed, such document shall be manually signed, or

signed using either typed signatures or duplicated or facsimile

versions of manual signatures. Where typed, duplicated or facsimile

signatures are used, each signatory to the filing shall manually sign a

signature page or other document authenticating, acknowledging or

otherwise adopting his or her signature that appears in the filing.

Such document shall be executed before or at the time the filing is

made and shall be retained by the filer for a period of five years.

Upon request, the filer shall furnish to the Commission or its staff a

copy of any or all documents retained pursuant to this section.

46. By amending Sec. 240.15d-13 by revising the section heading and

paragraph (c) to read as follow:

Sec. 240.15d-13 Quarterly reports on Form 10-Q and Form 10-QSB

(Sec. 249.308a and Sec. 249.308b of this Chapter).

* * * * *

need not be filed by mining companies not in the production stage but

engaged primarily in the exploration for the development of mineral

deposits other than oil, gas or coal, if all of the following

conditions are met:

(1) The registrant has not been in production during the current

fiscal year or the two years immediately prior thereto; except that

being in production for an aggregate period of not more than eight

months over the three-year period shall not be a violation of this

condition.

(2) Receipts from the sale of mineral products or from the

operations of mineral producing properties by the registrant and its

subsidiaries combined have not exceeded $500,000 in any of the most

recent six years and have not aggregated more than $1,500,000 in the

most recent six fiscal years.

* * * * *

Sec. 239.15d-17 [Removed and reserved]

47. By removing and reserving Sec. 240.15d-17.

48. By amending Sec. 240.16a-3 by revising paragraph (i) to read as

follows:

Sec. 240.16a-3 Reporting transactions and holdings.

* * * * *

(i) Signatures. Where the Act or the rules, forms, reports or