# International Disclosure Standards > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A99-25699 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** October 5, 1999 - **Citation:** 64 FR 53900 ## Text SECURITIES AND EXCHANGE COMMISSION 17 CFR Parts 210, 228, 229, 230, 239, 240, 249 and 260 [Release Nos. 33-7745; 34-41936; International Series Release No. 1205; File No. S7-3-99] RIN 3235-AH62 International Disclosure Standards AGENCY: Securities and Exchange Commission. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Securities and Exchange Commission is adopting revised disclosure requirements for foreign private issuers to conform to the international disclosure standards endorsed by the International Organization of Securities Commissions in September 1998. The international disclosure standards will replace most of the non- financial statement disclosure requirements of Form 20-F, the basic disclosure document for foreign private issuers. We are revising the registration statements used by foreign private issuers under the Securities Act of 1933 to reflect the changes in Form 20-F. We also are revising the definition of ``foreign private issuer'' to give clearer guidance on how foreign companies should determine whether their shareholders are U.S. residents. DATES: Effective Date: September 30, 2000. Compliance Dates: Registrants must comply with the revisions to Form 20-F for annual or transition reports on that form that are filed with respect to fiscal years ending on or after September 30, 2000. Registrants eligible to incorporate information from a Form 20-F annual report must comply with the revisions to Forms F-2 and F-3 and to Form F-4 for registration statements and post-effective amendments on those forms filed for the first time after the registrant is required to file its first annual report on amended Form 20-F. A registrant voluntarily may comply with any of the revised forms any time after September 30, 2000, but prior to the compliance date for that form. FOR FURTHER INFORMATION CONTACT: Sandra Folsom Kinsey, Senior International Counsel, or Rani Doyle, Special Counsel, in the Office of International Corporate Finance, Division of Corporation Finance at (202) 942-2990. SUPPLEMENTARY INFORMATION: We are adopting amendments to Form 20- F1 under the Securities Exchange Act of 1934.2 As part of those amendments, we are deleting Rule 3-19 under Regulation S- X.3 We are adopting amendments to Rule 3-20 under Regulation S-X,4 Items 402, 404, 512, and 601 of Regulation S- K,5 Rules 175, 434 and 463 of Regulation C,6 Forms F-1, F-2, F-3, F-4, F-6 and S-11 7 under the Securities Act of 1933,8 Exchange Act Rules 3b-6, 13a-10 and 15d-10,9 and Rule 0-11 under the Trust Indenture Act of 1939 10 to conform references to the items in Form 20-F that are being revised in connection with the amendments to Form 20-F. We are adopting amendments to Rules 3-01, 3-02 and 3-12 under Regulation S-X 11 and to Item 310 of Regulation S-B 12 to eliminate references to Rule 3-19. We also are revising the definition of foreign private [[Page 53901]] issuer in Securities Act Rule 405 13 and Exchange Act Rule 3b-4.14 --------------------------------------------------------------------------- \1\ 17 CFR 249.220f (``Form 20-F''). \2\ 15 U.S.C. Sec. 78a et seq. (the ``Exchange Act''). \3\ 17 CFR 210.3-19. \4\ 17 CFR 210.3-20. \5\ 17 CFR 229.402, 17 CFR 229.404, 17 CFR 229.512 and 17 CFR 229.601. \6\ 17 CFR 230.175, 17 CFR 230.434 and 17 CFR 230.463. \7\ See 17 CFR 239.31, 17 CFR 239.32, 17 CFR 239.33, 17 CFR 239.34, 17 CFR 239.36 and 17 CFR 239.18. \8\ 15 U.S.C. 77a et seq. (the ``Securities Act''). \9\ 17 CFR 240.3b-6, 17 CFR 240.13a-10 and 17 CFR 240.15d-10. \10\ 17 CFR 260.0-11. \11\ 17 CFR 210.3-01, 17 CFR 210.3-02, and 17 CFR 210.3-12. \12\ 17 CFR 228.310. \13\ 17 CFR 230.405. \14\ 17 CFR 240.3b-4. --------------------------------------------------------------------------- I. Executive Summary Many of our initiatives for foreign issuers have had the goal of reducing barriers to cross-border offerings and listings in the United States, while preserving or enhancing existing investor protections. In addition to our own initiatives, we, as a member of the International Organization of Securities Commissions, referred to as IOSCO, have participated in international initiatives intended to facilitate the cross-border flow of securities and capital by promoting the use of a single disclosure document that would be accepted in multiple jurisdictions. In 1998, IOSCO endorsed a core set of disclosure standards for the non-financial statement portions of a disclosure document, and encouraged its members to take whatever steps would be necessary in their own jurisdictions to accept disclosure documents prepared in accordance with those standards.\15\ --------------------------------------------------------------------------- \15\ You can find the full text of the standards endorsed by IOSCO on the IOSCO Internet Web site http://www.iosco.org>. --------------------------------------------------------------------------- We believe IOSCO's disclosure standards represent a strong international consensus on fundamental disclosure topics, and that they can be used to produce offering and listing documents that will contain the same high level of information we traditionally have required. Today we are revising our existing foreign issuer integrated disclosure system to incorporate fully the international disclosure standards. We are adopting the revisions to our foreign integrated disclosure system essentially as proposed,\16\ with a few changes prompted by the suggestions of commenters. The international disclosure standards replace most, but not all, of the previous requirements of Form 20-F, the combined registration and annual report form for foreign private issuers under the Exchange Act. --------------------------------------------------------------------------- \16\ Securities Act Release No. 7637 (Feb. 2, 1999) [64 FR 2661] (the ``Proposing Release''). --------------------------------------------------------------------------- We also are revising the definition of ``foreign private issuer'' found in the rules under the Securities Act and the Exchange Act, to base the definition more closely on the percentage of securities beneficially owned by U.S. residents.\17\ In response to concerns raised by commenters, we have modified the proposed definition to give issuers clearer guidance on how to calculate the amount of their voting securities held by U.S. residents. --------------------------------------------------------------------------- \17\ See Securities Act Rule 405, 17 CFR 230.405, and Exchange Act Rule 3b-4, 17 CFR 240.3b-4. --------------------------------------------------------------------------- II. Background of Proposals and Commenters' Concerns A. Background As noted in the Proposing Release, we historically have sought to balance the information needs of investors with the public interest served by opportunities to invest in a variety of securities, including foreign securities.\18\ Technological advances have made it easier than ever for investors to learn about and invest in foreign companies. Because of the increasing flow of capital across borders, we and other securities regulators around the world have an interest in ensuring that a high level of information is available to investors in all markets. For this reason, we have been actively involved in IOSCO's efforts to develop a set of high quality international disclosure standards that could be used in cross-border offerings and listings. We support international initiatives that raise the level and quality of information available to investors, facilitate the cross-border flow of capital and reduce the regulatory burdens on foreign issuers, if those initiatives do so in a manner that is consistent with our mandate to protect investors. We believe the international disclosure standards endorsed by IOSCO achieve those goals and that the best way to promote use of the standards is to incorporate them fully into our existing foreign issuer integrated disclosure system.\19\ --------------------------------------------------------------------------- \18\ Securities Act Release No. 6360 (Nov. 20, 1981) [46 FR 58511]. \19\ As noted in the Proposing Release, we have preserved the original wording of the international disclosure standards to the maximum extent possible. We think this approach will promote consistent use of the standards and will help foreign issuers recognize them as a national version of the IOSCO standards accepted in other jurisdictions. Upon adoption, the international disclosure standards become part of the U.S. federal securities laws, as we noted in the Proposing Release. The standards have not been adopted on a mutual recognition basis with any other jurisdiction, and there will be no change in our current procedures and practices for reviewing and commenting on filed documents. --------------------------------------------------------------------------- B. Comments Regarding International Disclosure Standards We received fifteen comment letters on the Proposing Release.\20\ All of the comment letters expressed support for increasing international harmonization of disclosure standards and many expressed support for the proposed amendments. The letters from organizations representing users of issuer information, such as analysts and institutional investors, were particularly supportive. These commenters viewed the proposal as a means for promoting harmonization and improving comparability, without compromising the level of information provided by foreign registrants. Several commenters who expressed support for international harmonization of disclosure standards placed even greater importance on achieving harmonization in the area of international accounting standards. As we noted in the Proposing Release, the development of international accounting standards currently is the subject of a separate project by IOSCO.\21\ Some of the commenters had helpful suggestions for incorporating the international disclosure standards into our foreign integrated disclosure system and for clarifying the instructions to Form 20-F, and we have adopted many of these suggestions in the final amendments. --------------------------------------------------------------------------- \20\ You may read and copy the comment letters and the staff's summary of these letters in our Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Ask for File No. S7-3-99. You may view the comment letters that were submitted by electronic mail at the Commission's web site: www.sec.gov. \21\ See Proposing Release at n. 24. --------------------------------------------------------------------------- A few commenters urged us to evaluate the extent to which other jurisdictions accept the international disclosure standards before we take steps to revise our rules. They suggested that the international disclosure standards be available as an optional, alternative disclosure system, rather than being mandatory for all foreign registrants.\22\ These and other commenters tended to view the proposed amendments to Form 20-F as significantly increasing the disclosure burden for foreign registrants, and they predicted that imposing these requirements would deter foreign issuers from offering securities or listing in the United States. One commenter suggested that the revisions would penalize foreign registrants who had entered the U.S. market under the prior rules, and proposed that the over 1,100 reporting foreign issuers be ``grandfathered'' and allowed to continue using the disclosure standards in effect before these amendments. --------------------------------------------------------------------------- \22\ One commenter held the opposite view. See the comment letter, dated June 5, 1999, submitted by the Federation of European Stock Exchanges, which stated that ``[t]he Federation strongly supports the rejection of the alternative of creating a two-tiered system of disclosure requirements. The confusion created by an alternative approach would endanger the very essence of the proposals by IOSCO.'' --------------------------------------------------------------------------- As noted in the Proposing Release, we do not view the amendments to the foreign integrated disclosure system as resulting in a significant increase in the information foreign issuers must [[Page 53902]] disclose.\23\ In the few cases where the international disclosure standards ask for information not previously required by Form 20-F, we understand that the information is required under the domestic disclosure requirements in many other jurisdictions.\24\ Much of the information that is new to Form 20-F's disclosure requirements, therefore, is likely to be disclosed routinely by companies in countries outside the United States. In some cases, companies already may provide information required under the amendments to Form 20-F because of our general requirement to provide additional material information.\25\ --------------------------------------------------------------------------- \23\ Several commenters supported this view, noting in one case that ``while the format of the IOSCO disclosure standards differs somewhat from the current format of Form 20-F, the overall of disclosure required is not significantly different.'' See Rogers & Wells client memorandum, dated February 1999, submitted as a comment letter. another commenter expressed the view that ``New Form 20-F is generally comparable in quality to the disclosure requirements currently applicable to foreign private issuers.'' See Cleary, Gottlieb, Steen & Hamilton comment letter, dated May 18, 1999. \24\ In its comment letter dated June 15, 1999, the Federation of European Stock Exchanges expressed its members' support for the proposal and for efforts to create an ``international passport'' that would reduce the burden of different regulatory requirements while preserving investor protection and promoting transparency. In explaining its support, the Federation noted that some of the requirements in amended Form 20-F are equivalent to current and planned disclosure requirements for most European countries. \25\ 17 CFR 230.408 and 17 CFR 240.12b-20. --------------------------------------------------------------------------- In some cases, changes in the wording of requirements may create the impression that different or additional disclosure is required. We understand that changes in wording may create uncertainty among practitioners who are familiar with the prior phrasing and are unsure how to interpret different expressions of what is intended to be essentially the same requirement. One commenter urged us to identify disclosure requirements that use different wording but that are not intended to impose different substantive disclosure requirements. Although it is not possible to identify every example, we have tried to bear that concern in mind in our more detailed explanation of the amendments we are adopting today. With respect to the suggestion that we delay adopting the international disclosure standards until we see how widely they are accepted, or that we implement them on a voluntary basis, we do not believe that those approaches would achieve our goal of promoting regulatory harmonization at a high level of disclosure.\26\ We understand that some of the more developed capital markets represented in IOSCO either have agreed to accept, or are planning to accept, disclosure documents prepared using the international disclosure standards in cross-border offerings and listings. For example, the London Stock Exchange has advised us that it currently would accept disclosure documents based on the international disclosure standards, and, as part of its annual revision of its listing rules, it will be codifying that position in its rules. Some IOSCO jurisdictions have adopted the standards for domestic purposes; we understand that is the case in Argentina, Italy and Mexico. We think that by moving quickly to incorporate the international disclosure standards into our foreign registration system, we demonstrate our strong support for high quality international standards and encourage other jurisdictions to follow suit. As one of the largest capital markets, we believe our support is important for widespread acceptance and implementation of the standards. --------------------------------------------------------------------------- \26\ The Federation of European Stock Exchanges specifically noted that maintaining alternative disclosure standards would be inconsistent with the concept of regulatory simplification and the goals of the amendments. See Federation of European Stock Exchanges letter dated June 15, 1999. --------------------------------------------------------------------------- In the Proposing Release we explained that we had considered but rejected the alternative of a two-tiered registration system for foreign issuers. We continue to believe that any elective approach would add unnecessary complexity to our registration system, when our preference is for measures that promote regulatory simplification. For the same reason--and because, as explained above, we do not view the international disclosure standards as imposing a significant additional disclosure burden--we do not plan to ``grandfather'' the existing foreign reporting companies. We believe the lengthy effective dates for the revised rules and forms will allow time to confirm that there is international support for the standards. The delayed effective dates also provide a transition period that should be particularly helpful for registrants adapting to a new disclosure form. For example, as explained later in this release, issuers filing registration statements on Form 20-F or Form F-1 will not use the revised forms until September 30, 2000, and repeat issuers filing registration statements on Forms F-2, F-3 or F-4 will have an even longer transition period. Annual reports on revised Form 20-F will not be due until March 31, 2001 at the earliest, for those companies with September 30 fiscal year ends. Companies with December 31 fiscal year ends will not be required to file an annual report on revised Form 20-F until June 30, 2001, almost two years from the date of this release. C. Comments Regarding Elimination of Rule 3-19 As we explained in the Proposing Release, we are eliminating Rule 3-19 of Regulation S-X, which specifies the content, age and other requirements for foreign issuer financial statements, because the requirements of the rule are addressed in new Item 8 of Form 20-F. The only substantive change relates to the permitted age of financial statements. Item 8 of Form 20-F requires that audited financial statements be no older than 15 months at ``the time of the offering or listing,'' which means the effective date of the registration statement, rather than the 18 months permitted under Rule 3-19. In the case of the issuer's initial public offering, the audited financial statements also must be as of a date not older than 12 months at the time the offering document is filed. This stricter rule for initial public offerings does not apply to foreign issuers offering securities in the United States for the first time if they already are public in their home country.\27\ Item 8 also provides that if the date of a registration statement is more than nine months after the end of the issuer's last fiscal year, the registration statement must contain interim financial statements, including U.S. GAAP information, covering at least the first six months of the issuer's fiscal year. This information may be unaudited. --------------------------------------------------------------------------- \27\ Since many foreign issuers already are public companies when they file their first registration statement in the United States, we believe the 12-month rule will apply only in very limited circumstances. Even in those circumstances, we will consider waiving the requirement if the issuer represents adequately to the staff that no jurisdiction outside the United States imposes the 12-month requirement on the registrant's offering and that complying with the requirement is impracticable or presents undue hardship. If we waive the 12-month requirement, issuers would be instructed to comply with the 15-month age of financial statement requirement of Item 8.A. --------------------------------------------------------------------------- Some commenters pointed out that business history, market factors and industry practices often cause foreign issuers to prepare financial statements that are more current than required. These commenters did not believe the proposal to shorten the age of financial statements requirement would have significant practical effect on many issuers. One commenter approved of requiring more current financial information and urged us to consider accelerating further the filing deadlines [[Page 53903]] for annual reports of foreign registrants. On the other hand, several commenters expressed the view that the proposed change would unduly burden foreign issuers. These commenters pointed out that foreign issuers often need additional time to prepare a reconciliation to U.S. GAAP after they have finished preparing their primary financial statements. We believe that the 15-month audited financial statement requirement is in line with the requirements in other countries and is not an undue burden on a company seeking to offer securities in the United States. In most cases, companies have the ability to control the timing of their offerings so as to reduce the impact of this shorter age requirement. We believe the 15-month period is sufficient time to prepare a reconciliation to U.S. GAAP along with the financial statements. We also hesitate to factor in extra time for a company to prepare a reconciliation to U.S. GAAP, because this requirement affects companies in different ways. Whether or not there are any reconciling items to be reported--and the number and extent of those items-- depends, among other things, on a company's business activities during the period covered by the financial statements, on how similar the accounting standards used in preparing the primary financial statements are to U.S. GAAP, and on the way in which the company has chosen to apply those accounting standards in preparing its primary financial statements. For some companies, the burden is not significant. Some commenters argued that the ``blackout'' period resulting from the new age of financial statements requirements and the current six- month due date for annual reports on Form 20-F would pose a particular hardship for issuers who are in the market more or less continuously, as in the case of rights offerings, dividend or interest reinvestment plans, and offerings of securities upon conversion or exercise of outstanding securities. We already have distinguished these types of offerings in certain respects, such as by permitting the financial statements in prospectuses for these types of offerings to be reconciled to U.S. GAAP in accordance with Item 17, rather than Item 18, of Form 20-F. Because the blackout period may be particularly disruptive for these types of offerings, we have amended the instructions to Item 8.A.5 to replace the 15-month requirement for these types of offerings with an 18-month requirement and to replace the nine-month interim financial statements requirement with a 12-month requirement, which mirror the previous requirements for those types of offerings. We expect to reconsider this accommodation in the future, however, and may propose reducing the permitted age of financial statements for these types of offerings based on a review of its operation in practice or a possible change in the due date for annual reports.\28\ --------------------------------------------------------------------------- \28\ See Section XI.A.2 of Securities Act Release No. 7606A (Nov. 13, 1998) [63 FR 67174]. In the Securities Act reform release we proposed accelerating the due date for Form 20-F annual reports to five months after the close of the issuer's fiscal year and solicited comment on whether the due date should be accelerated to four months. --------------------------------------------------------------------------- D. Specific Changes to Registration and Report Forms Form 20-F is used as an initial registration statement under the Exchange Act and as an annual report form for foreign private issuers required to file annual reports pursuant to Section 13 or 15(d) of the Exchange Act. The amendments to Form 20-F adopted today replace prior Items 1--14 of Form 20-F, excluding Item 9A, with ten new items that track the wording of the IOSCO disclosure standards. The item previously designated as Item 9A, Quantitative and Qualitative Disclosures about Market Risk, of Form 20-F is retained and renumbered as Item 11. The items previously designated as Item 15, Defaults Upon Senior Securities, and Item 16, Changes in Securities and Changes in Security for Registered Securities, of Form 20-F also are retained and renumbered as Items 12 and 13, and the wording has been revised to reflect ``plain English'' drafting principles. These two items continue to apply only when Form 20-F is used as an annual report form. Items 17 and 18 of Form 20-F are retained in substance and are not renumbered; these items explain the financial statement requirements for registration statements and reports and the different types of reconciliation to U.S. GAAP that must be provided by issuers who prepare financial statements using accounting principles other than U.S. GAAP. As noted in the Proposing Release, the text of old Item 18 was largely the same as the text of old Item 17; our revisions to Item 18 eliminate the redundant text and highlight the differences, but are not intended to change any substantive requirements of that Item. The amendments adopted today also bring the exhibit requirements for foreign issuers more in line with the exhibits required for domestic issuers filing a registration statement on Form 10 or an annual report on Form 10-K. The ``Appendix A to Item 2(b)--Oil and Gas'' is amended only to correct item references; no substantive changes were made. Corresponding changes were made in the Securities Act registration statement forms that refer to Form 20-F. Several commenters made helpful suggestions for clarifying the instructions to the ten items of the international disclosure standards or for adapting them to our existing integrated disclosure system. The ten core items are described below, together with an explanation of some of the changes from the Proposing Release. As noted, most of the ten items have been adopted as proposed. Item 1. Identity of Directors, Senior Management and Advisors Several commenters noted that the terms ``principal bankers and legal advisors'' and ``legal advisors to the issue'' may be confusing or raise liability issues in the United States. While these terms and the term ``sponsor'' are commonly used and well understood in some countries, they may not be used in other jurisdictions. We have revised the instructions to this item to clarify that these individuals or entities only need be identified if the issuer is required to identify them in other jurisdictions. Item 2. Offer Statistics and Expected Timetable One commenter noted that the timetable for a typical U.S. offering by a foreign private issuer would be very dependent on market conditions and other unpredictable factors. We would expect that in cases such as a typical, U.S.-style, firm-commitment underwritten offering, the timetable disclosure would be very brief and would likely focus more on the sequence of events than on precise dates. In other cases, such as offerings involving a complex corporate restructuring, we expect that the timetable would provide more detail and likely would include anticipated dates or elapsed periods of time for major events. Item 3. Key Information This item includes requirements for selected financial data, exchange rate information, the reasons for the offer and the expected use of proceeds, and information about risk factors. With respect to the Item 3.B requirement for a statement of capitalization and indebtedness, we have amended the proposed instructions to clarify that this statement is not required in annual reports, in line with current disclosure practice, and also to provide guidance [[Page 53904]] on complying with the requirement in the case of offerings under shelf registration statements. With respect to the requirement for information on the reason for the offer and use of proceeds, found in Item 3.C, we view this item as calling for the same type of information that U.S. companies provide in response to Item 504 of Regulation S-K. With respect to Item 3.D, risk factors, one commenter suggested that attempting to limit risk factor disclosure in annual reports to ``the most significant risk factors'' was confusing and unnecessary. We agree that, in view of our recent ``plain English'' initiative and its emphasis on avoiding boilerplate risk factors, any listing of risk factors--whether in a registration statement or an annual report-- should focus on the most significant risk factors as they apply to the issuer and its operations. An explicit instruction would be redundant and may create confusion. Accordingly, we have deleted this instruction. Item 4. Information on the Company This item includes requirements for a description of the issuer's business and properties. To the extent segment information is required, this item states that information may be presented on the same basis as that used to determine the company's business segments under the body of accounting principles used in preparing the financial statements. This statement is intended to refer to the accounting principles used in preparing the primary financial statements, not those used in preparing any required U.S. GAAP reconciliation. One commenter suggested that we continue to include the Form 20-F instructions regarding the necessity of complying with applicable Industry Guides and, for issuers in extractive industries, the need to name any independent consultants who have prepared or reviewed estimates of reserves. Following this suggestion, we have revised the instructions to Item 4 to reflect our existing instructions in this area. Item 5. Operating and Financial Review and Prospects This item corresponds to the current requirement for management's discussion and analysis of financial condition and results of operations. We interpret the requirements of this item as being essentially the same as those of old Item 9 of Form 20-F. We have added an instruction to clarify that, as was the case under old Item 9, this section of the registration statement or report should discuss any aspect of the U.S. GAAP reconciliation and U.S. GAAP differences that the registrant believes is necessary for an understanding of the financial statements as a whole. In response to comments asking us to clarify when information must be provided with respect to inflation rates and the effects of hyperinflation, we have added an instruction to provide additional guidance. Item 6. Directors, Senior Management and Employees This item includes requirements relating to compensation and shareholdings for directors and management. The definition of the term ``administrative, supervisory or management bodies'' in Form 20-F's Glossary states that this term corresponds to ``executive officers'' in the United States. Two commenters suggested that this attempt at clarification could create confusion, because in some countries the members of these bodies may not perform the same functions as executive officers in U.S. companies. In response to this concern, we have deleted the clarification and added an instruction stating that the meaning of these terms will depend on the functions performed. Several commenters noted that Item 6 requires disclosure of the amount of shares held by individual directors and management, without the alternative previously available under old Item 5 of Form 20-F of providing this information on an aggregate basis. We believe that the international disclosure standards reflect a consensus that the individual share ownership of management provides important information for investors. However, we have added an instruction indicating that if an individual member of management beneficially owns less than 1% of the outstanding securities, that fact may be stated instead of providing the specific number of shares that individual beneficially owns, as long as the specific number of shares is not otherwise disclosed or required to be disclosed in a non-U.S. jurisdiction. This mirrors the approach taken in Item 403 of Regulation S-K for U.S. issuers. Item 7. Major Shareholders and Related Party Transactions This item requires disclosure of information about major shareholders and others that control or may control the company, as well as disclosure of related party transactions. At the request of one commenter, we have added an instruction similar to Instruction 3 to Item 404(c) of Regulation S-K, to clarify the extent to which banks and other lending institutions must disclose loans made in the ordinary course of business. Item 7 reduces the Form 20-F threshold for disclosure of beneficial ownership from 10% to 5%, and the commenters that mentioned this change generally expressed support. Item 8. Financial Information This item contains requirements relating to the presentation of financial statements, requirements that previously were set forth in Rule 3-19 of Regulation S-X, and requirements relating to legal proceedings. The only change we are making to Regulation S-X is the elimination of Rule 3-19; the remaining items of Regulation S-X continue to apply to registration statements and reports filed by foreign private issuers to the same extent they did before these amendments to Form 20-F were adopted. With respect to the provisions of Item 8.A.5 that relate to financial information published by the issuer that is more current than the financial statements required in the filing, some commenters expressed concern that these provisions expand on the requirements of Rule 3-19(f) or change the reconciliation requirement for this type of information. This was not the intention, and we have revised the instructions in an attempt to eliminate any confusion on this point.\29\ We also have added an instruction clarifying that in order to comply with the requirement for three years of audited financial statements, the issuer is not required to provide a balance sheet for the earliest of these periods if it is not required in a jurisdiction outside the United States. --------------------------------------------------------------------------- \29\ There also is no change in the reconciliation requirement for interim information presented in selected financial data. --------------------------------------------------------------------------- Two commenters asked if the statement in the Item 8 instructions and in the General Instructions, that financial statements must be audited in accordance with U.S. generally accepted auditing standards, was intended to change the staff's practice of accepting auditor's reports that state that the audit was conducted in accordance with local auditing standards that are ``substantially similar'' or ``similar in all material respects'' to U.S. GAAS. As one commenter noted, that practice was adopted to accommodate audit report styles in different jurisdictions that differ from the audit report wording specified by U.S. GAAS. The practice was not intended to relieve the auditor of the responsibility to perform all auditing procedures necessary under U.S. GAAS. We do not intend to change our practice of accepting wording variations in audit reports to comply with local reporting formats. In all other [[Page 53905]] respects, however, in order to avoid ambiguity, the report must say that the audit was performed in accordance with U.S. GAAS. Item 9. The Offer and Listing This item includes requirements for a description of the offering, including the plan of distribution, trading markets, selling shareholders, dilution and expenses. Item 9.A requires disclosure of how the offering price was determined if there is no established market for the securities being offered. We view this requirement as being equivalent to the requirement of Item 505 of Regulation S-K. One commenter pointed out that the requirement in Item 9.B.1 for the underwriters' addresses could create logistical problems in U.S.-style offerings where the syndicate members are not decided until final pricing. In those circumstances, however, an issuer may comply with this requirement by disclosing only the addresses of the lead underwriters, which should be known before pricing. Generally speaking, for a U.S.-style, firm commitment underwritten offering, we would expect that the responses to Item 9.B, Plan of Distribution, would include much of the same information provided in response to Item 508 of Regulation S-K, to the extent that information is material to an investor's understanding of the offering. Item 10. Additional Information This item includes requirements for, among other things, a description of the issuer's share capital, significant provisions of its articles of incorporation and bylaws, its material contracts, and applicable taxes. One commenter suggested that certain requirements of Item 10, specifically subsections 10.A (Share Capital), 10.E (Taxation) and 10.F (Dividends and Paying Agents), be limited to registration statements and annual reports relating only to equity securities, since that information is inapplicable to other types of securities, or would otherwise be disclosed in the issuer's financial statements or in response to Item 10.B, Memorandum and Articles of Association. After considering this comment and the prior requirements of Form 20-F, we agree that the information called for by Item 10.A and 10.F is less pertinent to non-equity securities and to annual reports, and we have amended the item to limit these requirements to registration statements relating to equity securities. E. ``Foreign Private Issuer'' Definition We are adopting the proposed amendments to Rule 405 under the Securities Act and Rule 3b-4 under the Exchange Act, which contain the definition of ``foreign private issuer,'' essentially in the form proposed, with some additional clarification. The amendments, in effect, change the test of whether more than 50 percent of an issuer's outstanding voting securities are held by residents of the United States from a record ownership test to one that more closely reflects the beneficial ownership of the issuer's securities.\30\ As noted in the Proposing Release, we believe that the increased prevalence of offshore nominees and custodial accounts has made record ownership less meaningful for purposes of determining U.S. ownership. We believe a test based more closely on beneficial ownership gives a better picture of whether or not a company incorporated outside the United States is entitled to the accommodations available to foreign private issuers under the federal securities laws. The ownership test adopted today is based on the method of calculation used in Exchange Act Rule 12g3-2(a), which follows the definition of ``securities held of record'' in Rule 12g5-1, but requires the issuer to ``look through'' the record ownership of brokers, dealers, banks or nominees holding securities for the accounts of their customers to determine the residency of those customers. Issuers also must take into account information regarding U.S. ownership derived from beneficial ownership reports that are provided to the issuer or filed publicly, as well as information that otherwise is provided to the issuer. The reference to beneficial ownership reports is not limited to reports filed with the Commission, since we understand that beneficial ownership of an issuer's securities may be required to be provided to the issuer or disclosed publicly in other countries, as well as in the United States. --------------------------------------------------------------------------- \30\ There are two parts to the foreign private issuer definition. The first part is based on ownership of the issuer's securities. The second part of the definition is based on whether (a) a majority of the issuer's executive officers or directors are U.S. citizens or residents, (b) over 50% of its assets are within the United States, or (c) its business is administered principally in the United States. Any one of these three factors, together with majority U.S. ownership, will mean the issuer fails to satisfy the foreign private issuer definition. --------------------------------------------------------------------------- Several commenters suggested that these changes would create a substantial burden for companies that trade in many different markets, and that widely held companies would have to devote significant effort and expense in determining beneficial ownership in many jurisdictions where the likelihood of finding U.S. owners is small. In order to address these concerns, we have limited the application of the ``look through'' provisions of Rule 12g3-2(a) to voting securities held of record: In the United States, In the issuer's home jurisdiction, and In the primary trading market for the issuer's securities if different from the issuer's home jurisdiction. These jurisdictions should cover most of the trading volume for the issuer's securities, and searches in these jurisdictions are likely to yield the greatest number of U.S. beneficial owners. This modification to the test should reduce the burden on foreign companies while still producing a reasonably accurate picture of whether or not the company is a foreign private issuer. Most commenters questioned the basis for our proposed rebuttable presumption that, if a foreign issuer's securities trade in the U.S. markets in the form of American Depositary Receipts, or ADRs, the shares deposited in the ADR program are held solely by U.S. residents. These commenters pointed out that, for a number of reasons, non-U.S. investors may choose to hold securities in ADR form. Because it appears that issuers will not take advantage of the presumption and will feel the need to query ADR depositaries regarding the owners of ADRs, we have determined not to adopt the presumption. Some commenters pointed out that it is not always possible for issuers to obtain information about separate customer accounts, as required by Rule 12g3-2(a). Brokers, dealers, banks or other nominees may be unwilling or unable to provide information about their customer accounts. This problem is not unique to the foreign private issuer definition, however; the duty to inquire about separate customer accounts already exists for issuers deciding whether the reporting exemption in Rule 12g3-2(a) is available. In the case of the foreign private issuer definition, the issuer would not be asking nominees to provide the number of U.S. shareholders or the names of those shareholders, but only the percentage of the nominee's holdings of the issuer's securities that are represented by U.S. accounts. If after reasonable inquiry, however, the issuer is unable to obtain information about the nominee's customer accounts, including cases where the nominee's charge for supplying this information would be unreasonable, the issuer may rely on a presumption that the customer accounts are held in the nominee's principal place of business. We have [[Page 53906]] revised the instructions to the foreign private issuer definition to clarify this point. III. Effective Dates and Transition Provisions The amendments to rules and forms adopted today become effective September 30, 2000, with certain exceptions. In some cases, as explained below, the date at which a registrant will have to comply with a revised form will depend on that registrant's fiscal year end. Registration statements filed on Form F-1, Form F-4 or Form 20-F--Registrants must use revised Form F-1 and revised Form 20-F for registration statements first filed on or after September 30, 2000.\31\ Registrants that are not eligible to incorporate Form F-4 information by reference to a previously filed annual report on Form 20-F also must use revised Form F-4 for registration statements filed on or after September 30, 2000. --------------------------------------------------------------------------- \31\ Forms F-6 and S-11 under the Securities Act were revised to conform cross-references to Form 20-F. The changes to these forms also are effective for forms first filed on or after September 30, 2000. --------------------------------------------------------------------------- Registration statements filed on Forms F-2 and F-3 and on Form F-4 if it permits information to be incorporated by reference--These forms permit a registrant to satisfy form requirements by incorporating information from an annual report on Form 20-F. Form F-4 also permits the registrant to incorporate information about the other party to a business combination by referring to that company's annual report. The revised Forms F-2, F- 3 and F-4 do not provide for incorporation of information by reference to ``old'' Form 20-F. Accordingly, the revisions to Forms F-2 and F-3 will be effective for registration statements and post- effective amendments filed any time after a registrant is required to file its first annual report on revised Form 20-F. In cases where a Form F-4 permits information about either party to the business combination to be incorporated by reference to an annual report on Form 20-F, the revisions to Form F-4 will be effective for registration statements and post-effective amendments filed any time after the party whose information is being incorporated by reference is required to file its first annual report on Form 20-F. Annual reports filed on Form 20-F--Revised Form 20-F must be used for annual or transition reports filed with respect to fiscal years ending on or after September 30, 2000. Rule 3-19--Rule 3-19 of Regulation S-X will no longer apply to registration statements filed on or after September 30, 2000 that are filed on Form F-1 or on a Form F-4 that permits incorporation of information by reference. A registrant may continue to rely on Rule 3-19 for registration statements filed on Forms F-2 and F-3, and on a Form F-4 that permits incorporation of information by reference, until the revisions to those forms take effect. The following information applies to situations that arise when registrants make the transition from the old version of a form to the revised version: Pre-effective amendments--If, on September 30, 2000, a foreign private issuer has on file at the Commission a registration statement on Form F-1, a Form F-4 that does not permit incorporation by reference or Form 20-F and that registration statement has not been declared effective, the issuer may continue to file pre- effective amendments to that registration statement after September 30, 2000 without modifying those pre-effective amendments to reflect the revisions. This position does not apply to pre-effective amendments to registration statements on Forms F-2, Form F-3 or a Form F-4 that permits incorporation by reference, because registrants will have a lengthy transition period and experience preparing an annual report on revised Form 20-F, before they have to comply with the revisions to those Securities Act registration statements. Post-effective amendments--The revisions to registration statement forms adopted today apply to post-effective amendments filed on or after the effective date given above for a particular form if the post-effective amendment is to include the registrant's latest audited financial statements or to update the prospectus under Section 10(a)(3).\32\ --------------------------------------------------------------------------- \32\ 15 U.S.C. 77j(a)(3). --------------------------------------------------------------------------- Registration statements and post-effective amendments filed under Rules 462 (b) and (c)--Registration statements and post- effective amendments filed under Rules 462 (b) and (c) are effective upon filing with the Commission. These registration statements and amendments must comply with the registration statement revisions adopted today only if the registrant first filed the underlying registration statement on or after the effective date given above for a particular form. Prospectus supplements--The revisions to registration statement forms adopted today apply to prospectus supplements filed on or after the effective date given above for a particular form. If an issuer filed a base prospectus under Rule 415(a)(1)(x) before it was required to comply with revised Form F-3, that base prospectus does not have to be amended, even though subsequent prospectus supplements must comply with the revised form. Registrants are encouraged to use the revised forms for registration statements and annual reports on a voluntary basis before the compliance dates described above. A registrant that wishes to use revised Forms F-2, F-3 or F-4 before it has filed its first annual report on revised Form 20-F may do so. In those cases, however, the registrant either will have to amend its previously filed annual report to comply with the new disclosure requirements of Form 20-F or provide within the body of the Securities Act registration statement the information it would otherwise incorporate from Form 20-F. IV. Cost-Benefit Analysis The amendments update and simplify the disclosure requirements for foreign private issuers. We believe the amendments will make it easier for foreign private issuers to raise capital and list their securities in multiple jurisdictions, including the United States. In addition, as other jurisdictions adopt or accept the international standards, U.S. issuers desiring to raise capital in multiple foreign markets will enjoy the benefits of harmonization. Foreign issuers seeking to raise capital or list securities in more than one jurisdiction often encounter differing, and in some cases conflicting, regulatory requirements. These regulatory hurdles may influence issuers' decisions about where to offer or list their securities. A primary goal of the amendments to Form 20-F is to encourage and facilitate the use of one disclosure document by issuers seeking to raise capital or list securities in multiple jurisdictions. The amendments provide the benefits of lowering regulatory barriers to cross-border offerings and listings with the result of reduced regulatory costs and burdens. The amendments will bring us closer to the goal of enabling issuers to prepare one basic disclosure document that will be accepted in many jurisdictions. Although some tailoring of the disclosure document may be required to satisfy specific national requirements, issuers and investors will benefit from greater uniformity in the requirements for core disclosure topics. The amendments impose some additional disclosure requirements on foreign private issuers. However, we believe that the benefits of the amendments--to issuers and investors--justify possible costs. As we stated in the proposing release, we believe the IOSCO standards incorporated into amended Form 20-F are generally comparable to the prior disclosure requirements of Form 20-F and that foreign private issuers should not experience significantly increased compliance costs. Some commenters, including attorneys in private practice informally contacted by the staff of the Office of International Corporate Finance, have concurred with our view. They acknowledge that the disclosure requirements in amended Form 20-F are comparable to the Form's previous disclosure requirements and would not, in practice, result in significant additional or quantifiable compliance costs. We recognize that shortening the age of financial statements requirement may present burdens for some foreign private [[Page 53907]] issuers. We believe that the transparency benefits to investors of the availability of more current information justifies the potential burdens of the new requirements. Indeed, several commenters expressed their belief that the amendments will increase transparency, ensure a high level of investor protection and enhance the comparability of disclosures between foreign and domestic issuers. In addition, in conversations with practitioners, many indicated that they did not expect the new Form 20-F requirements to impact their clients adversely, because the market already demands more current financial information from offerors than presently required. For these issuers, no new burden will exist. Moreover, in response to concerns raised by some commenters, the final amendments relax the age of financial statement requirements for continuous offerings, diminishing the burdens potentially associated with the new timing requirements. Furthermore, in many offerings, issuers have flexibility to determine the timing of their filings and may be able to plan their offerings to accommodate the requirements. Accordingly, the Commission does not believe that foreign private issuers should experience a significant quantifiable burden in complying with the amendments. There are other reasons to conclude that the benefits of the amendments, which will accrue both to investors and to issuers, will justify the costs. First, the purpose of the amendments is to facilitate cross-border offerings and listings. We believe the amendments will encourage other jurisdictions to endorse or adopt the IOSCO standards, and widespread acceptance of the standards will further reduce compliance burdens for foreign issuers, as well as for U.S. issuers seeking capital abroad. Second, we, as well as some commenters, expect additional compliance costs will be mitigated because a significant number of foreign private issuers already comply, for various reasons, with the additional disclosure requirements in the amended Form. For instance: Foreign issuers often provide the additional information that is required by the amended Form in order to successfully market their securities or attract investors, or in response to our general materiality requirements. As one commenter noted, some of the new requirements, including those related to age of financial statements, 5% beneficial ownership disclosure, and expanded compensation-related disclosure, are equivalent or comparable to disclosure requirements that currently are or will soon be mandated in many European jurisdictions. Other countries, such as Argentina, Italy and Mexico, are adopting IOSCO's international disclosure standards for their domestic issuer disclosure requirements. As regulators move further in the direction of harmonized standards, we expect more jurisdictions to endorse and more foreign issuers to comply with the IOSCO standards. Third, not all of the disclosure requirements of the amended Form will apply to all foreign private issuers; some requirements are based, as with old Form 20-F, on foreign requirements. In these instances, disclosure will not be required under the amended Form unless a foreign private issuer is required to disclose information in another jurisdiction or makes the requested information public on a voluntary basis. Finally, the amendments are scheduled to take effect gradually, beginning more than one year from adoption, at the earliest. This schedule will give foreign private issuers a significant amount of time to familiarize themselves with the amendments and to set up cost- effective procedures, as necessary, to comply with the amendments. We believe this will allow foreign issuers to plan and minimize any compliance costs. Some commenters expressed concern that the amendments to change the definition of ``foreign private issuer'' under the Exchange Act and the Securities Act would impose significant compliance costs. We believe the new requirements are beneficial to the integrity of our regulatory system, which provides accommodations for foreign issuers because of the unique difficulties they face in entering a foreign regulatory regime. The amendments provide a more accurate portrayal of whether a company incorporated outside the United States is the type of entity for whom the special rules and forms for foreign private issuers were intended. In response to concerns expressed by commenters about the costs associated with the amendments, we have determined to adopt a more focused ``look through'' requirement that will reduce issuer costs and capture most U.S. ownership information. We believe that the benefits of accurate issuer categorization justify the additional costs a company incorporated outside the United States may bear in determining whether it is entitled to the accommodations available to foreign private issuers. In sum, we expect the amendments to revise Form 20-F, accelerate the age of financial statements requirements, and revise the definition of foreign private issuers, will impose transitional costs on foreign private issuers, but after a transitional period, we believe those costs will become much less significant. We believe those costs are justified in light of the benefits the amendments will provide to issuers, investors and the markets. V. Consideration of Burdens on Competition, and Promotion of Efficiency, Competition and Capital Formation Form 20-F is used by foreign private issuers as an initial registration statement and as an annual report form under the Exchange Act. The amendments to Form 20-F and related forms and rules should encourage and facilitate the use of one disclosure document that would meet the regulatory requirements of multiple jurisdictions. The Commission sought but did not receive any comments related to whether the amendments would promote efficiency, competition or capital formation, or have anti-competitive effects. Under Section 2(b) of the Securities Act and 3(f) of the Exchange Act, the Commission considered whether the amendments would promote competition, cross-border capital formation, and efficiency in multi-jurisdictional offerings and listings. Moreover, the amendments adopted today reflect the Commission's consideration, as required by Section 23(a) of the Exchange Act, of the impact the amendments may have on competition. The amendments are designed to harmonize disclosure requirements for foreign issuers, without imposing any negative impact on U.S. businesses. Therefore, the Commission believes that any burden on competition imposed by the amendments is necessary or appropriate in furtherance of the purposes of the Exchange Act. VI. Regulatory Flexibility Act Certification Pursuant to the Regulatory Flexibility Act (15 U.S.C. Sec. 605(b)), the Chairman of the Commission certified at the proposal stage that the revisions to rules and forms will not have a significant impact on a substantial number of small entities. We received no comments specifically addressing the certification. A copy of the certification was attached as Appendix A to the Proposing Release. [[Page 53908]] VII. Paperwork Reduction Act The amendments affect Form 20-F, which contains ``collection of information requirements'' within the meaning of the Paperwork Reduction Act of 1995.\33\ The title for the collection of information is ``Form 20-F.'' Providing the information required by Form 20-F is mandatory for foreign private issuers required to register securities or offerings with the Commission, and the information collected will not be kept confidential. --------------------------------------------------------------------------- \33\ 44 U.S.C. Secs. 3501 et seq. --------------------------------------------------------------------------- The amendments will affect changes to collections of information within the Paperwork Reduction Act. The collections of information would be required by amended Form 20-F. Most of the disclosure requirements of amended Form 20-F closely correspond to the Form's previous disclosure requirements. The new requirements of the amended Form are based on common national requirements in other countries, as identified by IOSCO. For these reasons, we do not expect filers of the amended Form 20-F to experience a long-term quantifiable change in their information collection burdens. In the short term, we expect that foreign private issuers will spend time reviewing Form 20-F to become familiar with its amended format and requirements, and as necessary, implement measures to comply with additional disclosure requirements. The adopted rule is substantially similar to the proposed rules with respect to the collection of information requirements. Changes from the proposed Form were undertaken in response to comment letters and principally are clarifications. The information collection burden is not readily quantifiable for several reasons: Some of the new disclosure requirements are not triggered unless the Form 20-F filer has a disclosure obligation under foreign law; Different issuers will need more or less time to become familiar with the amendments; Some foreign private issuers already disclose voluntarily the information that is required by the amendments. Once all Form 20-F filers familiarize themselves with the amended Form, we believe the burden hours will revert to the current information collection burden estimate. In the longer term, as more jurisdictions endorse and accept the IOSCO standards, we believe that the burden estimate may decrease as the differences between U.S. standards and foreign standards are reduced. We determined the number of burden hours by estimating the number of hours it would take for an average foreign private issuer to: (1) become familiar with the amendments; (2) make an initial filing on amended Form 20-F and/or related amended Securities Act forms; and (3), file subsequent registration statements or reports using amended Form 20-F standards. It is our estimate that the average foreign private issuer initially would need 20 hours to understand the amendments and another 10 to implement them. We believe this 30 hour burden will decrease significantly after the first time a foreign private issuer complies with the amendments. In addition to the transition burden, the average foreign private issuer would need 451 hours annually to file an amended Form 20-F or amended Securities Act form that incorporated Form 20-F standards. To reach this number, we relied on the total annual burden hour estimate submitted in connection with Form 20-F to the Office of Management and Budget, referred to as OMB, in 1996. The resulting estimate is significantly less than the 1,995 burden hours set forth in the Proposing Release for these amendments, which upon further review, we determined was inaccurate. We solicited but did not receive any comments on this estimate. In subsequent years, we expect the annual burden to revert to 451 hours per response. We estimate that there would be 1,007 respondents to Form 20-F. Each respondent would respond once per year. The Commission submitted the proposed revisions to those rules and forms to OMB for review in accordance with 44 U.S.C. 3507(d) and 5 CFR 1320.11. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control number is 3235- 0288. The revised forms and regulations set forth the disclosures that the Commission will require foreign private issuers to make to the public about themselves and their securities offerings. Requests for materials submitted to OMB by the Commission with regard to the collection of information should be in writing, refer to File No. S7-3- 99, and be submitted to the Securities and Exchange Commission, Records Management, Office of Filings and Information Services. VIII. Statutory Basis and Text of Amendments The amendments to the Commission's rules and forms are adopted pursuant to Sections 2(b), 5, 6, 7, 10 and 19(a) of the Securities Act of 1933 as amended, Sections 3, 12, 13, 15 and 23 of the Securities Exchange Act of 1934, and Section 319 of the Trust Indenture Act of 1939. List of Subjects 17 CFR Part 210 Accountants, Accounting. 17 CFR Part 228 Reporting and recordkeeping requirements, Securities, Small business. 17 CFR Parts 229, 239 and 249 Reporting and recordkeeping requirements, Securities. 17 CFR Part 230 Advertising, Investment companies, Reporting and recordkeeping requirements, Securities. 17 CFR Part 240 Brokers, Reporting and recordkeeping requirements, Securities. 17 CFR Part 260 Reporting and recordkeeping requirements, Securities, Trusts and trustees. Text of the Amendments In accordance with the foregoing, the Securities and Exchange Commission amends Title 17, chapter II of the Code of Federal Regulations 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, 77z-2, 77aa(25), 77aa(26), 78j-1, 78l, 78m, 78n, 78o(d), 78u-5, 78w(a), 78ll(d), 79e(b), 79j(a), 79n, 79t(a), 80a-8, 80a-20, 80a-29, 80a-30, 80a- 37(a), unless otherwise noted. Sec. 210.3-19 [Removed] 2. By removing and reserving Sec. 210.3-19. Sec. 210.3-20 [Amended] 3. Amend Sec. 210.3-20 in the last sentence of paragraph (d) by removing the words ``Items 17(c)(2) or 18(c)(2) of'' and adding, in their place, the words ``Item 17(c)(2) of''. 4. By removing in 17 CFR Part 210 the words ``Sec. 210.3-19'' and adding, in their place, the words ``Item 8.A of Form 20- [[Page 53909]] F (Sec. 249.220 of this chapter)'' in the following places: a. Section 210.3-01(h); and b. Section 210.3-02(d). Sec. 210.3-12 [Amended] 5. Amend Sec. 210.3-12 in paragraph (f) by removing the words ``specified in Sec. 210.3-19. Financial statements of a foreign business which are furnished pursuant to Secs. 210.3-05 or 210.3-09 because it is an acquired business or a 50 percent or less owned person may be of the age specified in Sec. 210.3-19.'' and adding, in their place, the words ``specified in Item 8.A of Form 20-F (Sec. 249.220f of this chapter). Financial statements of a foreign business which are furnished pursuant to Secs. 210.3-05 or 210.3-09 because it is an acquired business or a 50 percent or less owned person may be of the age specified in Item 8.A of Form 20-F.'' 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, 77z-2, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77jjj, 77nnn, 77sss, 78l, 78m, 78n, 78o, 78u-5, 78w, 78ll, 80a-8, 80a-29, 80a-30, 80a-37, 80b-11, unless otherwise noted. Sec. 228.310 [Amended] 7. Amend the first sentence in Note 2 of Sec. 228.310 by removing the words ``Articles 3-19 and 3-20 (17 CFR 210.3-19 and 210.3-20)'' and adding, in their place, the words ``Item 8.A of Form 20-F (17 CFR 249.220f) and Article 3-20 of Regulation S-X (17 CFR 210.3-20)''. 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 for part 229 continues to read in part as follows: Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78l, 78m, 78n, 78o, 78u-5, 78w, 78ll(d), 79e, 79n, 79t, 80a-8, 80a-29, 80a-30, 80a-37, 80b-11, unless otherwise noted. * * * * * Sec. 229.402 [Amended] 9. Amend Sec. 229.402(a)(1)(ii) by removing the words ``Items 11 and 12 of Form 20-F [17 CFR 249.220f]'' and adding, in their place, the words ``Items 6.B. and 6.E.2. of Form 20-F (17 CFR 249.220f)''. 10. Amend Sec. 229.404 by revising paragraph 3 of Instructions to Item 404 to read as follows: Sec. 229.404 (Item 404) Certain relationships and related transactions. * * * * * Instructions to Item 404. * * * * * 3. A foreign private issuer will be deemed to comply with Item 404 if it provides the information required by Item 7.B of Form 20-F (17 CFR 249.220f). Sec. 229.512 [Amended] 11. Amend Sec. 229.512 in the first sentence of paragraph (a)(4) by removing the words ``Sec. 210.3-19 of this chapter'' and adding, in their place, the words ``Item 8.A. of Form 20-F (17 CFR 249.220f)''. Sec. 229.601 [Amended] 12. Amend Sec. 229.601 in paragraph (b)(10)(iii)(B)(5) by removing the words ``Item 11 of Form 20-F'' and adding, in their place, the words ``Item 6.B. of Form 20-F (Sec. 249.220f of this chapter)''. PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933 13. The authority citation for part 230 continue to read in part as follows: Authority: 15 U.S.C. 77b, 77f, 77g, 77h, 77j, 77r, 77s, 77sss, 78c, 78d, 78l, 78m, 78n, 78o, 78w, 78ll(d), 79t, 80a-8, 80a-24, 80a- 28, 80a-29, 80a-30, and 80a-37, unless otherwise noted. * * * * * Sec. 230.175 [Amended] 14. Amend Sec. 230.175 by removing in paragraph (b)(2)(i) the words ``or Item 9 of Form 20-F (Sec. 249.220f of this chapter) `Management's discussion and analysis of financial condition and results of operations,' '' and adding, in their place, the words ``Management's Discussion and Analysis of Financial Condition and Results of Operations, or Item 5 of Form 20-F, Operating and Financial Review and Prospects, (Sec. 249.220f of this chapter)''; by removing in paragraph (c)(3) the words ``Item 9 of Form 20-F'' and adding, in their place, the words ``Item 5 of Form 20-F''. 15. By amending Sec. 230.405 by revising the definition of ``foreign private issuer'' to read as follows: Sec. 230.405 Definitions of terms. * * * * * Foreign private issuer. The term foreign private issuer means any foreign issuer other than a foreign government except an issuer meeting the following conditions: (1) More than 50 percent of the outstanding voting securities of such issuer are directly or indirectly owned of record by residents of the United States; and (2) Any of the following: (i) The majority of the executive officers or directors are United States citizens or residents; (ii) More than 50 percent of the assets of the issuer are located in the United States; or (iii) The business of the issuer is administered principally in the United States. Instructions to paragraph (1) of this definition: To determine the percentage of outstanding voting securities held by U.S. residents: A. Use the method of calculating record ownership in Rule 12g3- 2(a) under the Exchange Act (Sec. 240.12g3-2(a) of this chapter), except that your inquiry as to the amount of shares represented by accounts of customers resident in the United States may be limited to brokers, dealers, banks and other nominees located in: (1) The United States, (2) Your jurisdiction of incorporation, and (3) The jurisdiction that is the primary trading market for your voting securities, if different than your jurisdiction of incorporation. B. If, after reasonable inquiry, you are unable to obtain information about the amount of shares represented by accounts of customers resident in the United States, you may assume, for purposes of this definition, that the customers are residents of the jurisdiction in which the nominee has its principal place of business. C. Count shares of voting securities beneficially owned by residents of the United States as reported on reports of beneficial ownership that are provided to you or publicly filed and based on information otherwise provided to you. * * * * * 16. Amend Sec. 230.434 by revising paragraph (c)(3)(i) to read as set forth below; and by removing in paragraph (c)(3)(ii) the words ``Item 11 of Form S-3 or Form F-3 (Sec. 239.13 or Sec. 239.33 of this chapter)'' and adding, in their place, the words ``Item 11 of Form S-3 or Item 5 of Form F-3 (Sec. 239.13 or Sec. 239.33 of this chapter)''. Sec. 230.434 Prospectus delivery requirements in firm commitment underwritten offerings of securities for cash. * * * * * (c) * * * (3) * * * (i) The description of securities required by Item 202 of Regulations S-K (Sec. 229.202 of this chapter) or by Items 9, 10 and 12 of Form 20-F (Sec. 249.220f of this chapter) as applicable, or a fair and accurate summary thereof; and * * * * * [[Page 53910]] Sec. 230.463 [Amended] 17. Amend Sec. 230.463 by removing in paragraph (a) the words ``Item 16(e)'' and adding, in their place, the words ``Item 14(e)''. PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933 18. The general authority citation for part 239 continues to read in part as follows: Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77sss, 78c, 78l, 78m, 78n, 78o(d), 78u-5, 78w(a), 78ll(d), 79e, 79f, 79g, 79j, 79l, 79m, 79n, 79q, 79t, 80a-8, 80a-24, 80a-29, 80a-30 and 80a-37, unless otherwise noted. * * * * * 19. Amend General Instruction E. to Form S-11 (referenced in Sec. 239.18) by removing the words ``Items 3, 4, 10, 11 and 18, respectively, of Form 20-F'' and adding, in their place, the words ``Items 6, 7.A, 8.A.7, and 18 of Form 20-F''. Note: The text of Form S-11 does not and this amendment will not appear in the Code of Federal Regulations. 20. Amend Form F-1 (referenced in Sec. 239.31) by removing in General Instruction III the words ``the information that would be required by Item 11'' and adding in their place the words ``the information which would be required by Item 4''; by removing in General Instruction III the words ``called for by Item 9'' and adding in their place the words ``called for by Items 10.A and 10.B of Form 20-F or Item 12 of Form 20-F, as applicable''; by removing Items 4 through 10 and 13; by redesignating Items 11, 12, 14, 15, 16, and 17 as Items 4, 5, 6, 7, 8, and 9; by revising the caption for newly designated Item 4 to read ``Information with Respect to the Registrant and the Offering''; by removing in newly designated Item 4(b) the words ``Pursuant to Item 16'' and adding, in their place, the words ``Pursuant to Item 8''; and, by removing in newly designated Item 8(b) the words ``and Item 11(b) of this Form'' and adding, in their place, the words ``and Item 4(b) of this Form''. 21. Amend Form F-1 (referenced in Sec. 239.31) the Instructions As To Summary Prospectuses section by redesignating paragraphs 1.(c), 1.(d), 1.(e), 1.(f), 1.(g) and 1.(h) as paragraphs 1.(c)(i), 1.(c)(ii), 1.(c)(iii), 1.(c)(iv), 1.(c)(v) and 1.(d); by removing in newly designated paragraph 1.(c)(i) the words ``As to Item 4, a'' and adding, in their place, ``A''; by removing in newly designated paragraph 1.(c)(ii) the words ``As to Item 7, a'' and adding, in their place, ``A''; by removing in newly designated paragraph 1.(c)(iii) the words ``As to Item 8, a'' and adding, in their place, ``A''; by removing in newly designated paragraph 1.(c)(iv) the words ``As to Item 9, a'' and adding, in their place, ``A''; by removing in newly designated paragraph 1.(c)(v) the words ``As to Item 11, a brief statement of the general character of the business done and intended to be done, the Selected Financial Data (Item 8 of Form 20-F (Sec. 249.220f of this chapter))'' and adding, in their place, the words ``As to Item 4, a brief statement of the general character of the business done and intended to be done, the Selected Financial Data (Item 3.A of Form 20-F (Sec. 249.220f of this chapter))''; by removing in paragraph 3 the words ``that information as to Items 9 and 11 specified in paragraphs (f) and (g) above'' and adding, in their place, the words ``that information specified in paragraphs 1.(c)(iv) and 1.(c)(v) above''. Note: The text of Form F-1 does not and this amendment will not appear in the Code of Federal Regulations. 22. Amend Form F-2 (referenced in Sec. 239.32) by removing Items 4 through 10 and 14; by adding new Item 4 to read as follows; by redesignating Items 11, 12, 13, 15, 16, and 17 as Items 5, 6, 7, 8, 9, and 10; by removing in newly designated Item 5(b)(1) the words ``pursuant to Item 12'' and adding, in their place, the words ``pursuant to Item 6''; by removing in newly designated Item 5(b)(2) the words ``accordance with Item 12 are not sufficiently current to comply with the requirements of Rule 3-19 of Regulation S-X (Sec. 210.3-19 of this chapter), financial statements necessary to comply with that rule'' and adding, in their place, the words ``accordance with Item 6 are not sufficiently current to comply with the requirements of Item 8.A of Form 20-F, financial statements necessary to comply with that Item''; and, by removing in the caption of the Note to newly designated Item 6 the words ``Item 12(a)'' and adding, in their place, the words ``Item 6(a)''. Note: The text of Form F-2 does not and this amendment will not appear in the Code of Federal Regulations. Securities and Exchange Commission, Washington D.C. 20549 Form F-2--Registration Statement Under the Securities Act of 1933 * * * * * Item 4. Information About the Offering Furnish the information about the offering required by the following items of Form 20-F: Item 2 (Offer Statistics and Expected Timetable), Item 3.B (Capitalization and Indebtedness), Item 3.C (Reasons for the Offer and Use of Proceeds), Item 7.C (Interests of Experts and Counsel), Item 10 (The Offer and Listing) and Item 12 (Description of Securities Other than Equity Securities). You do not have to repeat in the prospectus any information called for by these items if the same information is contained in a report being incorporated by reference into this registration statement. * * * * * 23. Amend Form F-2 (referenced in Sec. 239.32) the Instructions As To Summary Prospectuses section by redesignating paragraphs 1.(c), 1.(d), 1.(e), 1.(f), 1.(g) and 1.(h) as paragraphs 1.(c)(i), 1.(c)(ii), 1.(c)(iii), 1.(c)(iv), 1.(c)(v) and 1.(d); by removing in newly designated paragraph 1.(c)(i) the words ``As to Item 4, a'' and adding, in their place, ``A''; by removing in newly designated paragraph 1.(c)(ii) the words ``As to Item 7, a'' and adding, in their place, ``A''; by removing in newly designated paragraph 1.(c)(iii) the words ``As to Item 8, the'' and adding, in their place, ``The''; by removing in newly designated paragraph 1.(c)(iv) the words ``As to Item 9, a'' and adding, in their place, ``A''; and, by removing in newly designated paragraph 1.(c)(v) the words ``As to Item 12, a brief statement of the general character of the business done and intended to be done, the Selected Financial Data (Item 8 of Form 20-F (Sec. 249.220f of this chapter)'' and adding, in their place, the words ``A brief statement of the general character of the business done and intended to be done, the Selected Financial Data (Item 3.A of Form 20-F (Sec. 249.220f of this chapter)''. 24. Amend Form F-3 (referenced in Sec. 239.33) by removing Items 4 through 10 and 14; by adding new Item 4 to read as follows; by redesignating Items 11, 12, 13, 15, 16, and 17 as Items 5, 6, 7, 8, 9, and 10; in newly designated Item 5 remove the words ``Item 12'' and add, in their place, the words ``Item 6'' in the following places: twice in Item 5(a), once in Item 5(b)(1), and once in Item 5(b)(2); by removing in newly designated Item 5(b)(1) the words ``Form 8-K'' and adding, in their place, the words ``Form 6-K''; by removing in newly designated Item 5(b)(2) the words ``Rule 3-19 of Regulation S-X (Sec. 210.3-19 of this chapter), financial statements necessary to comply with that rule'' and adding, in their place, the words ``Item 8.A. of Form 20-F, financial statements necessary to comply with that Item''; and by removing in the caption of the Note to newly designated Item 6 the words ``Item 12(d)'' and adding, in their place, the words ``Item 6(d)''. Note: The text of Form F-3 does not and this amendment will not appear in the Code of Federal Regulations. [[Page 53911]] Securities and Exchange Commission Form F-3, Registration Statement Under the Securities Act of 1933 * * * * * Item 4. Information About the Offering Furnish the information about the offering required by the following items of Form 20-F: Item 2 (Offer Statistics and Expected Timetable), Item 3.B (Capitalization and Indebtedness), Item 3.C (Reasons for the Offer and Use of Proceeds), Item 7.C (Interests of Experts and Counsel), Item 10 (The Offer and Listing) and Item 12 (Description of Securities Other than Equity Securities). You do not have to repeat in the prospectus any information called for by these items if the same information is contained in a report being incorporated by reference into this registration statement. * * * * * 25. Amend Form F-4 (referenced in Sec. 239.34) by removing the words ``Item 4 of Form 20-F'' and adding, in their place, the words ``Item 7.A. of Form 20-F'' in the following places: a. The Instruction following Item 18(a)(5)(ii); and b. the Instruction following Item 19(a)(5). 26. Amend Form F-4 (referenced in Sec. 239.34) by removing the words ``Item 5 of Form 20-F'' and adding, in their place, the words ``Item 9.A.4. of Form 20-F'' in the following places: a. Instruction 2. to Item 11; b. Item 12(a)(5); c. Item 12(b)(3)(viii); d. Instruction 2. to Item 13; e. Item 14(i); and f. Item 17(b)(2). 27. Amend Item 12(b)(3)(iii) of Form F-4 (referenced in Sec. 239.34) by removing the words ``Item 6 of Form 20-F, exchange controls and other limitations on security holders'' and adding, in their place, the words ``Item 10.D. of Form 20-F, exchange controls''. 28. Amend Item 14(d) of Form F-4 (referenced in Sec. 239.34) by removing the words ``Item 6 of Form 20-F, exchange controls and other limitations affecting security holders'' and adding, in their place, the words ``Item 10.D. of Form 20-F, exchange controls''. 29. Amend Form F-4 (referenced in Sec. 239.34) by removing the words ``Item 8 of Form 20-F'' and adding, in their place, the words ``Item 3.A. of Form 20-F'' in the following places: a. Item 3(d), 3(e), 3(f)(1), 3(f)(2), 3(f)(3); b. Item 12(b)(3)(v); c. Item 14(f); and d. Item 17(b)(3); 30. Amend Form F-4 (referenced in Sec. 239.34) by removing the words ``Item 9 of Form 20-F, management's discussion and analysis of financial condition and results of operations'' and adding, in their place, the words ``Item 5 of Form 20-F, operating and financial review'' in the following places: a. Item 12(b)(3)(vi)(A); b. Item 14(g)(1); and c. Item 17(b)(4)(i). 31. Amend Form F-4 (referenced in Sec. 239.34) by removing the words ``Item 9A of Form 20-F'' and adding, in their place, the words ``Item 11 of Form 20-F'' in the following places: a. Item 12(b)(3)(vi)(B); b. Item 14(g)(2); and c. Item 17(b)(4)(ii). 32. Amend Item 18(a)(7)(i) of Form F-4 (referenced in Sec. 239.34) by removing the words ``Item 10 of Form 20-F, directors and officers of registrant'' and adding, in their place, the words ``Item 6.A. of Form 20-F, directors and senior management of the registrant''. 33. Amend Item 19(a)(7)(i) of Form F-4 (referenced in Sec. 239.34) by removing the words ``Item 10 of Form 20-F, directors and officers of the registrant: and adding, in their place, the words ``Item 6.A. of Form 20-F, directors and senior management of the registrant''. 34. Amend Form F-4 (referenced in Sec. 239.34) by removing the words ``Items 11 and 12 of Form 20-F, remuneration and options'' and adding, in their place, the words ``Items 6.B. and 6.E. of Form20-F, compensation and share ownership'' in the following places: a. Item 18(a)(7)(ii); and b. Item 19(a)(7)(ii). 35. Amend Form F-4 (referenced in Sec. 239.34) by removing the words ``Item 13 of Form 20-F, interest of management in certain transactions'' and adding, in their place, the words ``Item 7.B. of Form 20-F, related party transactions'' in the following places: a. Item 18(a)(7)(iii); and b. Item 19(a)(7)(iii). 36. Amend Form F-4 (referenced in Sec. 239.34) by removing the words ``Rule 3-19 of Regulation S-X (210.3-19 of this chapter)'' or ``Rule 3-19 to Regulation S-X'' or ``Rule 3-19 of Regulation S-X'' and adding, in their place, the words ``Item 8.A. of Form 20-F'' in the following places: a. Item 10(b); b. Instruction 2 to Item 11; c. Items 12(a)(2), (a)(5), (b)(2)(i), and (b)(3)(viii); d. Instruction 2 to Item 13; e. Item 14(i); f. the Instructions following Item 14(i); and g. Items 17(b)(2) and 17(b)(6). 37. Amend Item 3 of Form F-4 (referenced in Sec. 239.34) by removing in Instruction 2. to Instructions to paragraphs (e) and (f) the words ``Instruction 7 to Item 8 of Form 20-F'' and adding, in their place, the words ``The Instructions to Item 3.A. of Form 20-F''. 38. Amend Item 4(a)(3) of Form F-4 (referenced in Sec. 239.34) by removing the words ``Item 202 of Regulation S-K (Sec. 229.202 of this chapter)'' and adding, in their place, the words ``Items 10.A and 10.B of Form 20-F or Item 12 of Form 20-F, as applicable''. 39. Amend Item 7(a) of Form F-4 (referenced in Sec. 239.34) by removing the words ``Item 507 of Regulation S-K (Sec. 229.507 of this chapter)'' and adding, in their place, the words ``Item 9.D. of Form 20-F (Sec. 249.220f of this chapter)''. 40. Amend Item 8 of Form F-4 (referenced in Sec. 239.34) by removing the words ``Item 509 of Regulation S-K (Sec. 229.509 of this chapter)'' and adding, in their place, the words ``Item 7.C. of Form 20-F (Sec. 249.220f of this chapter)''. 41. Amend Item 12 of Form F-4 (referenced in Sec. 239.34) by removing in Item 12(a)(2) the words ``Item 9 of Form 20-F'' and adding, in their place, the words ``Item 5 of Form 20-F''; by removing in Item 12(b)(1) the words ``Items 1 and 2 of Form 20-F'' and adding, in their place, the words ``Item 4 of Form 20-F''; by removing in Item 12(b)(3)(i) the words ``Items 1(a)(3) and (a)(4) of Form 20-F'' and adding, in their place, the words ``Items 4.B., 4.B.2., and 4.B.5. of Form 20-F''; by removing in Item 12(b)(3)(ii) the words ``Item 2 of Form 20-F'' and adding, in their place, the words ``Item 4.D. of Form 20-F''; by removing in Item 12(b)(3)(iv) the words ``Item 7 of Form 20- F'' and adding, in their place, the words ``Item 10.E of Form 20-F''; and by removing in Item 12(b)(3)(v) the words ``Item 8 of Form 20-F'' and adding, in their place, the words ``Item 3.A. of Form 20-F''. 42. Amend Item 14 of Form F-4 (referenced in Sec. 239.34) by removing in Item 14(a) the words ``Item 1 of Form 20-F, description of business'' and adding, in their place, the words ``Items 4.A., 4.B., and 4.C of Form 20-F, information on the company''; by removing in Item 14(b) the words ``Item 2 of Form 20-F, description of property'' and adding, in their place, the words ``Item 4.D. of Form 20-F, property, plant and equipment''; by removing in Item 14(c) words ``Item 3 of Form 20-F'' and adding, in their place, the words ``Item 8.A.7. of Form 20- F''; by removing in Item 14(e) words ``Item 7 of Form 20-F'' and adding, in their place, the words ``Item 10.E. of Form 20-F''. Note: The text of Form F-4 does not and this amendment will not appear in the Code of Federal Regulations. [[Page 53912]] 43. Revise Item 1 of Form F-6 (referenced in Sec. 239.36) to read as follows: Note: The text of Form F-6 does not and this amendment will not appear in the Code of Federal Regulations. Securities and Exchange Commission Form F-6, Registration Statement Under the Securities Act of 1933 For Depositary Shares Evidenced by American Depositary Receipts * * * * * Item 1. Description of Securities To Be Registered Furnish the information required by Item 12.E. of Form 20-F (Sec. 249.22 of this chapter). * * * * * PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934 44. The general authority citation for part 240 continues to read in part as follows: Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78f, 78i, 78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78ll(d), 78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4 and 80b-11, unless otherwise noted. * * * * * 45. By amending Sec. 240.3b-4 by revising the section heading and paragraph (c) to read as follows: Sec. 240.3b-4 Definition of ``foreign government,'' ``foreign issuer'' and ``foreign private issuer''. * * * * * (c) The term foreign private issuer means any foreign issuer other than a foreign government except an issuer meeting the following conditions: (1) More than 50 percent of the issuer's outstanding voting securities are directly or indirectly held of record by residents of the United States; and (2) Any of the following: (i) The majority of the executive officers or directors are United States citizens or residents; (ii) More than 50 percent of the assets of the issuer are located in the United States; or (iii) The business of the issuer is administered principally in the United States. Instruction to paragraph (c)(1): To determine the percentage of outstanding voting securities held by U.S. residents: A. Use the method of calculating record ownership in Rule 12g3- 2(a) under the Act (Sec. 240.12g3-2(a)), except that your inquiry as to the amount of shares represented by accounts of customers resident in the United States may be limited to brokers, dealers, banks and other nominees located in: (1) The United States, (2) Your jurisdiction of incorporation, and (3) The jurisdiction that is the primary trading market for your voting securities, if different than your jurisdiction of incorporation. B. If, after reasonable inquiry, you are unable to obtain information about the amount of shares represented by accounts of customers resident in the United States, you may assume, for purposes of this definition, that the customers are residents of the jurisdiction in which the nominee has its principal place of business. C. Count shares of voting securities beneficially owned by residents of the United States as reported on reports of beneficial ownership provided to you or filed publicly and based on information otherwise provided to you. 46. Amend Sec. 240.3b-6 by removing in paragraph (b)(2)(i) the words ``or Item 9 of Form 20-F'' (Sec. 249.220f of this chapter) ``Management's discussion and analysis of financial condition and results of operations,'' and adding, in their place, the words ``Management's Discussion and Analysis of Financial Condition and Results of Operations'' or Item 5 of Form 20-F, ``Operating and Financial Review and Prospects,''; by removing in paragraph (c)(3) the words ``Item 9 of Form 20-F'' and adding, in their place, the words ``Item 5 of Form 20-F''. 47. Amend Sec. 240.13a-10 by removing in paragraph (g)(4) the words ``responding to Items 3, 9, 15, 16, and 17 or 18'' and adding, in their place, the words ``responding to Items 5, 8.A.7., 13, 14, and 17 or 18''. 48. Amend Sec. 240.15d-10 by removing in paragraph (g)(4) the words ``responding to Items, 3, 9, 15, 16, and 17 or 18'' and adding, in their place, the words ``responding to Items 5, 8.A.7., 13, 14, and 17 or 18''. PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934 49. The authority citation for part 249 continues to read, in part, as follows: Authority: 15 U.S.C. 78a, et seq., unless otherwise noted; * * * * * 50. Amend Form 20-F (referenced in Sec. 249.220f) by revising the General Instructions; by removing Item 11; by revising Items 1 through 9, 10, 12 through 16, 18, 19 and Instructions to Exhibits to read as follows; by redesignating Item 9A as Item 11; by removing in newly designated Item 11 each time they appear the words ``Item 9A'' and adding, in their place, the words ``Item 11''; by removing in Instruction 3 to Item 17 the words ``Item 1 of Form 20-F'' and adding, in their place, the words ``Items 4.B.1 and 4.B.2 of Form 20-F''; and, by removing in the Appendix section following the Instructions As To Exhibits section each time they appear the words ``Item 2(b)'' and adding, in their place, the words ``Item 4.D''. Note: The text of Form 20-F does not and this amendment will not appear in the Code of Federal Regulations. United States Securities and Exchange Commission, Washington, D.C. 20549 Form 20-F * * * * * General Instructions A. Who May Use Form 20-F and When It Must Be Filed (a) Any foreign private issuer may use this form as a registration statement under Section 12 of the Securities Exchange Act of 1934 (referred to as the Exchange Act) or as an annual or transition report filed under Section 13(a) or 15(d) of the Exchange Act. A transition report is filed when an issuer changes its fiscal year end. The term ``foreign private issuer'' is defined in Rule 3b- 4 under the Exchange Act. (b) A foreign private issuer must file its annual report on this Form within six months after the end of the fiscal year covered by the report. (c) A foreign private issuer filing a transition report on this Form must file its report in accordance with the requirements set forth in Rule 13a-10 or Rule 15d-10 under the Exchange Act that apply when an issuer changes its fiscal year end. B. General Rules and Regulations That Apply to This Form (a) The General Rules and Regulations under the Securities Act of 1933 (referred to as the Securities Act) contain general requirements that apply to registration on any form. Read these general requirements carefully and follow them when preparing and filing registration statements and reports on this Form. (b) Pay particular attention to Regulation 12B under the Exchange Act. Regulation 12B contains general requirements about matters such as the kind and size of paper to be used, the legibility of the registration statement or report, the information to give in response to a requirement to state the title of securities, the language to be used and the filing of the registration statement or report. (c) In addition to the definitions in the General Rules and Regulations under the Securities Act and the definitions in Rule 12b-2 under the Exchange Act, General Instruction F defines certain terms for purposes of this Form. (d) Note Regulation S-X, which applies to the presentation of financial information in a registration statement or report. C. How To Prepare Registration Statements and Reports on This Form (a) Do not use this Form as a blank form to be filled in; use it only as a guide in the preparation of the registration statement or annual report. General Instruction E states which items must be responded to in a registration statement and which items must [[Page 53913]] be responded to in an annual report. The registration statement or report must contain the numbers and captions of all items. You may omit the text following each caption in this Form, which describes what must be disclosed under each item. Omit the text of all instructions in this Form. If an item is inapplicable or the answer to the item is in the negative, respond to the item by making a statement to that effect. (b) Unless an item directs you to provide information as of a specific date or for a specific period, give the information in a registration statement as of a date reasonably close to the date of filing the registration statement and give the information in an annual report as of the latest practicable date. (c) Note Exchange Act Rule 12b-20, which states: ``In addition to the information expressly required to be included in a statement or report, there shall be added such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.'' (d) If the same information required by this Form also is required by the body of accounting principles used in preparing the financial statements, you may respond to an item of this Form by providing a cross-reference to the location of the information in the financial statements, in lieu of repeating the information. (e) Note Item 10 of Regulation S-K which explains the Commission policy on projections of future economic performance and the Commission policy on securities ratings. (f) If you are providing the information required by this Form in connection with a registration statement under the Securities Act, note that Rule 421 requires you to follow plain English drafting principles. You can find helpful information in ``A Plain English Handbook--How to create clear SEC disclosure documents'' and in staff legal bulletins supplementing the Handbook. These documents are available on our Internet website, at www.sec.gov. D. How To File Registration Statements and Reports on This Form File with the Commission (i) three complete copies of the registration statement or report, including financial statements, exhibits and all other papers and documents filed as part of the registration statement or report, and (ii) five additional copies of the registration statement or report, which need not contain exhibits. File at least one complete copy of the registration statement or report, including financial statements, exhibits and all other papers and documents filed as part of the registration statement or report, with each exchange on which any class of securities is or will be registered. Manually sign at least one complete copy of the registration statement or report filed with the Commission and one copy filed with each exchange. Type or print the signatures on copies that are not manually signed. See Exchange Act Rule 12b-11(d) for instructions about manual signatures and the Instructions as to Exhibits of this Form for instructions about signatures pursuant to powers of attorney. Registration statements and reports are filed with the Commission by sending or delivering them to our File Desk between the hours of 9:00 a.m. and 5:30 p.m., Washington, D.C. time. The File Desk is closed on weekends and federal holidays. If you file a registration statement or report by mail or by any means other than hand delivery, the address is U.S. Securities and Exchange Commission, Attention: File Desk, 450 Fifth Street, N.W., Washington, D.C. 20549. We consider documents to be filed on the date our File Desk receives them. We do not require foreign private issuers to file registration statements and reports under our Electronic Data Gathering and Retrieval System (EDGAR). We encourage you to use EDGAR, if possible, because documents filed through EDGAR are easily accessible by the public through the Commission's Internet Web site and through other electronic means. If you have technical questions about EDGAR or want to request an access code, call the EDGAR Filer Support Office at (202) 942-8900. If you have questions about the EDGAR rules, call the Office of EDGAR Policy at (202) 942-2940. E. Which Items To Respond to in Registration Statements and Annual Reports (a) Exchange Act Registration Statements. A registration statement filed under the Exchange Act on this Form must include the information specified in Part I and Part III. Read the instructions to each item carefully before responding to the item. In some cases, the instructions may permit you to omit some of the information specified in certain items in Part I. (b) Annual Reports. An annual report on this Form must include the information specified in Parts I, II and III. Read the instructions to each item carefully before responding to the item. In some cases, the instructions may permit you to omit some of the information specified in certain items in Part I. The instructions also may permit you to omit certain information if it was previously reported to us and has not changed. If that is the case, you do not have to file copies of the previous report with the report being filed on this Form. (c) Financial Statements. An Exchange Act registration statement or annual report filed on this Form must contain the financial statements and related information specified in Item 17 of this Form. We encourage you to provide the financial statements and related information specified in Item 18 of this Form in lieu of Item 17, but the Item 18 statements and information are not required. In certain circumstances, Forms F-2, F-3 or F-4 for the registration of securities under the Securities Act require that you provide the financial statements and related information specified in Item 18 in your annual report on Form 20-F. Consult those Securities Act forms for the specific requirements and consider the potential advantages of complying with Item 18 instead of Item 17 of this Form. Note that Items 17 and 18 may require you to file financial statements of other entities in certain circumstances. These circumstances are described in Regulation S-X. The financial statements must be audited in accordance with U.S. generally accepted auditing standards, and the auditor must comply with the U.S. standards for auditor independence. If you have any questions about these requirements, contact the Office of Chief Accountant in the Division of Corporation Finance at (202) 942-2960. (d) Securities Act Registration Statements. The registration statement forms under the Securities Act direct you to provide information required by specific items of Form 20-F. Some items of Form 20-F only apply to Securities Act registration statements, and you do not have to respond to those items if you are using Form 20-F to file an Exchange Act registration statement or an annual report. The instructions to the items of Form 20-F identify which information is required only in Securities Act registration statements. F. Definitions The following definitions apply to various terms used in this Form, unless the context indicates otherwise. Affiliate--An ``affiliate'' of a specified person or entity refers to one who, directly or indirectly, either controls, is controlled by or is under common control with, the specified person or entity. Beneficial owner--The term ``beneficial owner'' of securities refers to any person who, even if not the record owner of the securities, has or shares the underlying benefits of ownership. These benefits include the power to direct the voting or the disposition of the securities or to receive the economic benefit of ownership of the securities. A person also is considered to be the ``beneficial owner'' of securities that the person has the right to acquire within 60 days by option or other agreement. Beneficial owners include persons who hold their securities through one or more trustees, brokers, agents, legal representatives or other intermediaries, or through companies in which they have a ``controlling interest,'' which means the direct or indirect power to direct the management and policies of the entity. Company--References to the ``company'' mean the company whose securities are being offered or listed, and refer to the company on a consolidated basis unless the context indicates otherwise. Directors and senior management--This term includes (a) the company's directors, (b) members of its administrative, supervisory or management bodies, (c) partners with unlimited liability, in the case of a limited partnership with share capital, (d) nominees to serve in any of the aforementioned positions, and (e) founders, if the company has been established for fewer than five years. The persons covered by the term ``administrative, supervisory or management bodies'' vary in different countries and, for purposes of complying with the disclosure standards, will be determined by the host country. Document--This term covers prospectuses and offering documents used in connection with a public offering of securities and registration statements or prospectuses used in connection with the initial listing of securities. Instruction: References to the ``document'' mean whatever type of document is being [[Page 53914]] prepared using Form 20-F disclosure requirements, including, as applicable, a prospectus, an Exchange Act registration statement, and an annual report. Equity securities--The term ``equity securities'' includes common or ordinary shares, preferred or preference shares, options or warrants to subscribe for equity securities, and any securities, other than debt securities, which are convertible into or exercisable or redeemable for equity securities of the same company or another company. If the equity securities available upon conversion, exercise or redemption are those of another company, the disclosure standards also apply to the other company. Group--A ``group'' is a parent and all its subsidiaries. References to a company's group mean the group of which it is a member. Home country--This term refers to the jurisdiction in which the company is legally organized, incorporated or established and, if different, the jurisdiction where it has its principal listing. Host country--This term refers to jurisdictions, other than the home country, in which the company is seeking to offer, register or list its securities. Instruction: Note that, as used in this Form, the term ``host country'' means the United States and its territories. Pre-emptive issue--The term ``pre-emptive issue'' and references to ``pre-emptive purchase rights'' refer to offerings made to the company's existing shareholders in order to permit them to maintain their pro rata ownership in the company. Part I Item 1. Identity of Directors, Senior Management and Advisers The purpose of this standard is to identify the company representatives and other individuals involved in the company's listing or registration. A. Directors and senior management. Provide the names, business addresses and functions of the company's directors and senior management. B. Advisers. Provide the names and addresses of the company's principal bankers and legal advisers to the extent the company has a continuing relationship with such entities, the sponsor for listing (where required by the host country regulations), and the legal advisers to the issue. C. Auditors. Provide the names and addresses of the company's auditors for the preceding three years (together with their membership in a professional body). Instructions to Item 1: If you are filing Form 20-F as an annual report under the Exchange Act, you do not have to provide the information called for by Item 1. You must provide this information, to the extent applicable, if you are filing a registration statement under either the Securities Act or the Exchange Act. Instructions to Item 1.B: You only have to provide the information called for by Item 1.B if you are required to disclose the information in a jurisdiction outside the United States. These persons will not be considered ``experts'' or ``sellers'' under the Securities Act solely due to the fact that they are named in response to Item 1.B. Item 2. Offer Statistics and Expected Timetable The purpose of this standard is to provide key information regarding the conduct of any offering and the identification of important dates relating to that offering. A. Offer statistics. For each method of offering, e.g., rights offering, general offering, etc., state the total expected amount of the issue, including the expected issue price or the method of determining the price and the number of securities expected to be issued. B. Method and expected timetable. For all offerings, and separately for each group of targeted potential investors, the document shall state the following information to the extent applicable to the offering procedure: 1. The time period during which the offer will be open, and where and to whom purchase or subscription applications shall be addressed. Describe whether the purchase period may be extended or shortened, and the manner and duration of possible extensions or possible early closure or shortening of this period. Describe the manner in which the latter shall be made public. If the exact dates are not known when the document is first filed or distributed to the public, describe arrangements for announcing the final or definitive date or period. 2. Method and time limits for paying up securities; where payment is partial, the manner and dates on which amounts due are to be paid. 3. Method and time limits for delivery of equity securities (including provisional certificates, if applicable) to subscribers or purchasers. 4. In the case of pre-emptive purchase rights, the procedure for the exercise of any right of pre-emption, the negotiability of subscription rights and the treatment of subscription rights not exercised. 5. A full description of the manner in which results of the distribution of securities are to be made public, and when appropriate, the manner for refunding excess amounts paid by applicants (including whether interest will be paid). Instructions to Item 2: If you are filing Form 20-F as a registration statement or annual report under the Exchange Act, you do not have to provide the information called for by Item 2. You must provide this information if you are filing a registration statement under the Securities Act. Item 3. Key Information The purpose of this standard is to summarize key information about the company's financial condition, capitalization and risk factors. If the financial statements included in the document are restated to reflect material changes in the company's group structure or accounting policies, the selected financial data also must be restated. See Item 8. A. Selected financial data. 1. The company shall provide selected historical financial data regarding the company, which shall be presented for the five most recent financial years (or such shorter period that the company has been in operation), in the same currency as the financial statements. Selected financial data for either or both of the earliest two years of the five-year period may be omitted, however, if the company represents to the host country regulator that such information cannot be provided, or cannot be provided on a restated basis, without unreasonable effort or expense. If interim period financial statements are included, the selected financial data should be updated for that interim period, which may be unaudited, provided that fact is stated. If selected financial data for interim periods is provided, comparative data from the same period in the prior financial year shall also be provided, except that the requirement for comparative balance sheet data is satisfied by presenting the year end balance sheet information. 2. The selected financial data presented shall include items generally corresponding to the following, except that the specific line items presented should be expressed in the same manner as the corresponding line items in the company's financial statements. Such data shall include, at a minimum, net sales or operating revenues; income (loss) from operations; income (loss) from continuing operations; net income (loss); net income (loss) from operations per share; income (loss) from continuing operations per share; total assets; net assets; capital stock (excluding long term debt and redeemable preferred stock); number of shares as adjusted to reflect changes in capital; dividends declared per share in both the currency of the financial statements and the host country currency, including the formula used for any adjustments to dividends declared; and diluted net income per share. Per share amounts must be determined in accordance with the body of accounting principles used in preparing the financial statements. 3. Where the financial statements provided in response to Item 8 are prepared in a currency other than the currency of the host country, disclosure of the exchange rate between the financial reporting currency and the currency of the host country should be provided, using the exchange rate designated by the host country for this purpose, if any: (a) At the latest practicable date; (b) The high and low exchange rates for each month during the previous six months; and (c) For the five most recent financial years and any subsequent interim period for which financial statements are presented, the average rates for each period, calculated by using the average of the exchange rates on the last day of each month during the period. B. Capitalization and indebtedness. A statement of capitalization and indebtedness (distinguishing between guaranteed and unguaranteed, and secured and unsecured, indebtedness) as of a date no earlier than 60 days prior to the date of the document shall be provided showing the company's capitalization on an actual basis and, if applicable, as adjusted to reflect the sale of new securities being issued and the intended application of the net proceeds therefrom. Indebtedness also includes indirect and contingent indebtedness. [[Page 53915]] C. Reasons for the offer and use of proceeds. 1. The document shall disclose the estimated net amount of the proceeds broken down into each principal intended use thereof. If the anticipated proceeds will not be sufficient to fund all the proposed purposes, the order of priority of such purposes should be given, as well as the amount and sources of other funds needed. If the company has no specific plans for the proceeds, it should discuss the principal reasons for the offering. 2. If the proceeds are being used directly or indirectly to acquire assets, other than in the ordinary course of business, briefly describe the assets and their cost. If the assets will be acquired from affiliates of the company or their associates, disclose the persons from whom they will be acquired and how the cost to the company will be determined. 3. If the proceeds may or will be used to finance acquisitions of other businesses, give a brief description of such businesses and information on the status of the acquisitions. 4. If any material part of the proceeds is to be used to discharge, reduce or retire indebtedness, describe the interest rate and maturity of such indebtedness and, for indebtedness incurred within the past year, the uses to which the proceeds of such indebtedness were put. D. Risk factors. The document shall prominently disclose risk factors that are specific to the company or its industry and make an offering speculative or one of high risk, in a section headed ``Risk Factors.'' Companies are encouraged, but not required, to list the risk factors in the order of their priority to the company. Among other things, such factors may include, for example: the nature of the business in which it is engaged or proposes to engage; factors relating to the countries in which it operates; the absence of profitable operations in recent periods; the financial position of the company; the possible absence of a liquid trading market for the company's securities; reliance on the expertise of management; potential dilution; unusual competitive conditions; pending expiration of material patents, trademarks or contracts; or dependence on a limited number of customers or suppliers. The Risk Factors section is intended to be a summary of more detailed discussion contained elsewhere in the document. Instructions to Item 3: 1. If you are filing Form 20-F as an annual report under the Exchange Act, you do not have to provide the information called for by Item 3.B or 3.C. If you are filing Form 20-F as a registration statement under the Exchange Act, you do not have to provide the information called for by Item 3.C. You must provide the information called for by Item 3 if you are filing a registration statement under the Securities Act. 2. Throughout Form 20-F, the terms ``financial year'' and ``fiscal year'' have the same meaning. The term ``fiscal year'' is defined in Rule 405 under the Securities Act and Rule 12b-2 under the Exchange Act. Instructions to Item 3.A: You may present the selected financial data on the basis of the accounting principles used in your primary financial statements. If you do this, however, you also must include in this summary any reconciliations of the data to U.S. generally accepted accounting principles and Regulation S-X, pursuant to Item 17 or 18 of this Form. In that case, you only have to provide selected financial data on a basis reconciled to U.S. generally accepted accounting principles for (i) those periods for which you were required to reconcile the primary annual financial statements in a filing under the Securities Act or the Exchange Act, and (ii) any interim periods. If you are unable to provide selected financial data for the earliest two years of the five-year period, submit the required representation to us before or at the time you file the document. Disclose in the document that data for the earliest two years have been omitted and explain the reasons for the omission. Instructions to Item 3.B: 1. If you are including the capitalization table called for by Item 3.B in a prospectus supplement for a shelf offering registered on Form F-3, the amounts shown in the table may be as of the date of the most recent balance sheet filed as part of the registration statement, if the information in the table is updated to reflect securities issued up to 60 days prior to the date of the supplement. 2. If you are not selling new securities in a firm commitment underwritten offering or an ``all or none'' best efforts offering, reflect the capitalization ``as adjusted'' for the net proceeds of the offering only in the following ways: a. In a best efforts ``minimum/maximum'' offering, reflect both the minimum and maximum proceeds; and b. In a rights offering or an offering of securities upon the exercise of outstanding warrants, reflect the proceeds only to the extent exercise is likely in view of the current market price. Instructions to Item 3.D: Risk factors should be concise and explain clearly how the risk affects the issuer or the securities. Item 4. Information on the Company The purpose of this standard is to provide information about the company's business operations, the products it makes or the services it provides, and the factors that affect the business. The standard also is intended to provide information regarding the adequacy and suitability of the company's properties, plants and equipment, as well as its plans for future increases or decreases in such capacity. A. History and development of the company. The following information shall be provided: 1. The legal and commercial name of the company. 2. The date of incorporation and the length of life of the company, except where indefinite. 3. The domicile and legal form of the company, the legislation under which the company operates, its country of incorporation and the address and telephone number of its registered office (or principal place of business if different from its registered office). Provide the name and address of the company's agent in the host country, if any. 4. The important events in the development of the company's business, e.g. information concerning the nature and results of any material reclassification, merger or consolidation of the company or any of its significant subsidiaries; acquisitions or dispositions of material assets other than in the ordinary course of business; any material changes in the mode of conducting the business; material changes in the types of products produced or services rendered; name changes; or the nature and results of any bankruptcy, receivership or similar [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A99-25699. Public record. Not legal advice.