[Federal Register Volume 60, Number 198 (Friday, October 13, 1995)]
[Proposed Rules]
[Pages 53468-53473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25390]




  Federal Register / Vol. 60, No. 198 / Friday, October 13, 1995 / 
Proposed Rules   

[[Page 53468]]


SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 230, 232, 239, 240 and 270

[Release No. 33-7234, 34-36346, IC-21400; File No. S7-31-95]
RIN 3235-AG67


Use of Electronic Media for Delivery Purposes

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rules.

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

SUMMARY: The Securities and Exchange Commission (``Commission'') today 
is proposing technical amendments to its rules that are premised on the 
distribution of paper documents. These proposals are intended to 
clarify certain rules in light of the interpretations set forth in a 
companion interpretive release [Release No. 33-7233] outlining the 
Commission's view on the use of electronic media in the dissemination 
of information under the federal securities laws.

DATES: Comments should be received on or before November 27, 1995.

ADDRESSES: Comments should be submitted in triplicate to Jonathan G. 
Katz, Secretary, Securities and Exchange Commission, 450 5th Street 
NW., Washington, D.C., 20549. Comment letters should refer to File No. 
S7-31-95. All comments received will be available for public inspection 
and copying at the Commission's Public Reference Room, 450 Fifth Street 
NW., Washington, D.C. 20549.

FOR FURTHER INFORMATION CONTACT: Joseph P. Babits or James R. Budge, 
(202) 942-2910, Division of Corporation Finance; and, with regard to 
questions concerning investment companies and investment advisers, 
Kathleen K. Clarke, (202) 942-0721, Division of Investment Management, 
U.S. Securities and Exchange Commission, 450 Fifth Street NW., 
Washington, D.C. 20549.

SUPPLEMENTARY INFORMATION: In order to clarify certain rules in light 
of the interpretations relating to electronic distribution of 
information under the federal securities laws, as published 
concurrently in an interpretive release (Release No. 33-7233) (the 
``Interpretive Release''), the Commission is proposing minor technical 
amendments to the following rules and forms: Rule 253 of Regulation A; 
1 Rule 420 of Regulation C; 2 Rules 481 and 482 of Regulation 
C; 3 Rule 605 of Regulation E; 4 Rule 304 of Regulation S-T; 
5 Forms F-7, 6 F-8, 7 F-9; 8 F-10 9 and F-80; 
10 Rule 12b-12; 11 Rule 13e-3; 12 Rule 13e-4; 13 
Schedule 13E-4F; 14 Rule 14a-3; 15 Rule 14a-5; 16 Rule 
14a-7; 17 Rule 14c-4; 18 Rule 14c-7; 19 Rule 14d-5; 
20 Schedule 14D-1F; 21 Schedule 14D-9F; 22 Rule 8b-12; 
23 Rule 30d-1; 24 and Rule 30d-2. 25

    \1\ 17 CFR 230.253.
    \2\ 17 CFR 230.420.
    \3\ 17 CFR 230.481 and 230.482.
    \4\ 17 CFR 230.605.
    \5\ 17 CFR 232.304.
    \6\ 17 CFR 239.37.
    \7\ 17 CFR 239.38.
    \8\ 17 CFR 239.39.
    \9\ 17 CFR 239.40.
    \10\ 17 CFR 239.41.
    \11\ 17 CFR 240.12b-12.
    \12\ 17 CFR 240.13d-3.
    \13\ 17 CFR 240.13e-4.
    \14\ 17 CFR 240.13e-102.
    \15\ 17 CFR 240.14a-3.
    \16\ 17 CFR 240.14a-5.
    \17\ 17 CFR 240.14a-7.
    \18\ 17 CFR 240.14c-4.
    \19\ 17 CFR 240.14c-7.
    \20\ 17 CFR 240.14d-5.
    \21\ 17 CFR 240.14d-102.
    \22\ 17 CFR 240.14d-103.
    \23\ 17 CFR 270.8b-12.
    \24\ 17 CFR 270.30d-1.
    \25\ 17 CFR 270.30d-2.
---------------------------------------------------------------------------

I. Proposed Amendments

    In its Interpretive Release, published concurrently, the Commission 
states its views with respect to the use of electronic media to 
disseminate information in compliance with the federal securities laws. 
The rules that are the subject of today's proposals relate to various 
aspects of how a document is to be sent, given or otherwise distributed 
to investors or others, and were originally adopted on the assumption 
that delivery was to be accomplished by means of a paper document. The 
Commission believes it is appropriate to modify these rules in light of 
the views expressed in the Interpretive Release to make it clear that 
the rules do not limit an issuer's (or other person's) delivery options 
to paper dissemination only, and that compliance with the rules 
governing legibility or specific methods of delivery may be effected by 
alternative means reasonably calculated to satisfy the requirements if 
electronic dissemination is chosen.
    These proposals demonstrate that the Commission recognizes the 
diversity of media available to issuers and others who distribute 
securities-related materials, as well as the fact that strict 
compliance with requirements applicable to printed material may not be 
possible in all electronic media. The purpose of the proposed rule 
changes is to maintain the intent of the original requirements while 
allowing flexibility in the choice of distribution medium.

A. General Formatting Requirements

    Wherever the Commission's rules prescribe the physical appearance 
of a paper disclosure document, such as type size and font 
requirements, the Commission is proposing to add statements to the 
rules to provide that if the document is being delivered in an 
electronic version, the issuer may comply with the requirements by 
presenting the information in a format readily communicated to 
investors. Where rules require legends to be printed in red ink or 
bold-face type, or using a different font size, the rules would include 
a statement that issuers may satisfy such requirements by presenting 
the legends in any manner reasonably calculated to draw attention to 
them. Comment is solicited as to whether more specific standards 
relating to legibility of electronic documents should be required, or 
whether the more flexible approach proposed today is preferable. If 
more specific standards are desirable, commenters should indicate which 
standards should apply.

B. Graphic, Image and Audio Information

    In addition to the written word, material information may be 
effectively conveyed through graphic presentations, such as charts, 
graphs and photographs, and through audio soundtracks. Some 
distribution media may be able to accommodate these means of 
communication, while others may not.26 As noted in Section II of 
the Interpretive Release, all versions of a disseminated document, 
whether paper or electronic, should convey substantially equivalent 
information to investors. The Commission proposes to incorporate this 
concept by amending its rules, where appropriate, to provide that if 
material graphic, image and audio information is included in one 
version of a disclosure document, but not in other versions, the issuer 
must include in the other versions a fair and accurate 

[[Page 53469]]
description or transcript of the omitted information.

    \26\ While graphic, image and audio material may be included by 
the issuer in an electronically disseminated document, this 
information may not, in some cases, be reproduced by the persons 
receiving the electronic version, either because of the technical 
constraints of the person's equipment or because of an election not 
to receive these types of communications. Issuers should be mindful 
of this possibility when using electronic media. If material 
information is to be furnished by means of graphics, images or audio 
soundtracks, issuers may need to make investors using electronic 
media aware of this.
---------------------------------------------------------------------------

    With respect to filings made on the EDGAR system, issuers may 
distribute to investors an electronic version of a disclosure document 
that includes video, audio, and graphic presentations in one package, 
while the version filed with the Commission on EDGAR could not 
accommodate this information. Rule 304 of Regulation S-T currently 
requires fair and accurate descriptions of omitted materials and 
provides that those portions of the disseminated version would be 
deemed filed with the Commission. Rule 304, however, is worded in terms 
of graphic and image material included in ``the paper version'' of an 
EDGAR filing. In order to reflect the possibility of the delivery of an 
electronic version that differs from the EDGAR filing, the Commission 
proposes to amend Rule 304 to provide that wherever the ``document 
delivered to investors or others'' includes graphic, image or audio 
information that cannot be reproduced in an electronic filing on EDGAR, 
the EDGAR filing should include a fair and accurate narrative 
description, tabular presentation or transcript of the omitted 
material. Of course, immaterial differences would not need to be 
described. The rule would retain the provisions that all such omitted 
material is deemed filed as part of the electronic filing and that 
copies of the document as distributed should be retained by the issuer 
for a period of five years. Commenters are requested to address whether 
there are alternatives to the proposed approach that could better 
minimize the impact of issuers using different versions of the same 
disclosure document.

C. Rules Where Mailing is Identified as a Delivery Method

    Several of the Commission's rules provide that information may be 
distributed to investors by mail. Some indicate that reasonably prompt 
alternative delivery methods may be used,27 while others speak 
only in terms of mailing. These rules should be read consistently to 
allow the use of alternative methods of distribution that are 
reasonably prompt. The Commission proposes to amend the rules where 
necessary to reflect that view.28

    \27\ See e.g., Rule 14d-4(a)(2)(ii) [17 CFR 240.14d-
4(a)(2)(ii)].
    \28\ Where the costs of distribution are to be calculated under 
the rules, the proposals would provide that methods analogous to 
those applicable to mailing should be used where alternative 
delivery methods are chosen.
---------------------------------------------------------------------------

D. Structure of Electronic Filing Rules

    This release proposes amendments to individual rules rather than 
creating a new regulation dedicated to electronic delivery that would 
work in tandem with the individual rules. This has been done to better 
integrate and highlight the electronic delivery accommodations in pre-
existing rules and to minimize confusion. However, a separate 
regulation approach (Regulation S-T) has been implemented in connection 
with electronic filing requirements, which are much more comprehensive 
and complex than those contemplated here because of EDGAR programming 
and processing considerations. The Commission solicits comment as to 
whether, rather than amending the existing rules throughout as 
proposed, Regulation S-T should be amended to address not only EDGAR 
filings, but also all electronic issues. In that case, the proposed 
amendments would be grouped together and would supersede the paper-
based formatting requirements where electronic delivery was used.

II. Solicitation of Comments

    Any interested persons wishing to submit written comments relating 
to the rule proposals, as explained above, are invited to do so by 
submitting them in triplicate to Jonathan G. Katz, Secretary, U.S. 
Securities and Exchange Commission, 450 Fifth Street NW., Washington, 
D.C., 20549. The Commission further requests comment on any competitive 
burdens that might result from the adoption of the proposals. Comments 
on this inquiry will be considered by the Commission in complying with 
its responsibilities under Section 23(a) of the Exchange Act.29 
Commenters should refer to File No. S7-31-95 for comments on the 
proposals set forth in this release.

    \29\ 15 U.S.C. 78w(a).
---------------------------------------------------------------------------

III. Cost-Benefit Analysis

    While the Commission expects the increased use of electronic media 
to benefit securities markets and investors by making disclosure 
available faster and more cheaply, it does not anticipate that the 
proposed amendments will, in and of themselves, result in substantial 
economic costs or benefits. The rule proposals are not intended to 
change what is permissible under the federal securities laws; rather, 
they are intended to make it clear how current regulatory requirements 
may be satisfied using methods made possible by technological 
developments. However, commenters are encouraged to identify any costs 
or benefits associated with the rule proposals that the Commission may 
have overlooked.
    In particular, please identify any costs or benefits associated 
with the rule proposals relating to (1) bold-face type, font size, and 
red ink requirements, (2) graphic, image and audio information, and (3) 
alternatives to mailing as a distribution method. Will these proposals 
result in additional costs and benefits (or will the proposed 
amendments have no significant effect, as anticipated)? Please 
describe, and quantify, where possible, any such significant effects 
that you foresee. Will these proposals affect the current compliance 
burden?
    Commenters should bear in mind that the use of electronic media for 
delivery purposes is optional, and persons responsible for furnishing 
disclosure may assess for themselves whether the benefits of using 
electronic distribution methods would outweigh the costs in a specific 
circumstance.
    In addition, the Commission seeks comment on the following issues 
in order to better assess the costs and benefits of taking additional 
actions affecting the dissemination of information under the federal 
securities laws. Please describe, and quantify where possible, the 
costs and benefits associated with any proposals that you would 
recommend.
    (1) Should any of the rule changes proposed in this release be 
crafted in a manner that would reduce compliance burdens? If so, how 
could that be done?
    (2) What actions, beyond what is proposed in this release, should 
the Commission take to maximize the benefits of document delivery to 
shareholders, issuers, and others, while eliminating any unnecessary 
costs?
    (3) What kinds of documents should the Commission be able to 
receive, process, and make publicly available through EDGAR system that 
are not currently eligible for that system?
    (4) Should the Commission allow the filing of documents in 
electronic media other than EDGAR? If so, please make specific 
recommendations.

IV. Regulatory Flexibility Act Certification

    Pursuant to Section 605(b) of the Regulatory Flexibility Act, 5 
U.S.C. 605(b), the Chairman of the Commission has certified that the 
amendments proposed herein would not, if adopted, have a significant 
economic impact on a substantial number of small entities. This 
certification, including the reasons therefor, is attached to this 
release as Appendix A. 

[[Page 53470]]


V. Statutory Bases

    The amendments to the Commission's rules under the Securities Act 
and amendments to the Commission's rules under the Exchange Act are 
being proposed pursuant to Sections 6, 7, 8, 10 and 19(a) of the 
Securities Act and Sections 3, 4, 10, 12, 13, 14, 15, 16 and 23 of the 
Exchange Act. The amendments to the Commission's rules under the 
Investment Company Act are being proposed pursuant to Sections 8(b) and 
38(a) under the Investment Company Act, as amended.

List of Subjects

17 CFR Parts 230, 232, 239, 240, and 270

    Reporting and recordkeeping requirements, Securities, and 
Investment companies.

Text of the Proposals

    In accordance with the foregoing, Title 17, chapter II of the Code 
of Federal Regulations is proposed to be amended as follows:

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

    1. The general authority citation for Part 230 is revised to read 
as follows:

    Authority: 15 U.S.C. 77b, 77f, 77g, 77h, 77j, 77s, 77sss, 78c, 
78d, 78l, 78m, 78n, 78o, 78w, 78ll(d), 79t, 80a-8, 80a-29, 80a-30, 
and 80a-37, unless otherwise noted.
* * * * *
    2. By amending Sec. 230.253 by designating the text of paragraph 
(b) after the heading as paragraph (b)(1) and by adding paragraph 
(b)(2), to read as follows:


Sec. 230.253  Offering circular.

* * * * *
    (b) Presentation of information. (1) * * *
    (2) Where an offering circular is distributed through an electronic 
medium, issuers may satisfy legibility requirements applicable to 
printed documents by presenting all required information in a format 
readily communicated to investors. If material graphic, image and audio 
information is included in one version of an offering circular, but not 
in other versions, the issuer must include in the other versions a fair 
and accurate description or transcript of the omitted information.
* * * * *
    3. By amending Sec. 230.420 by designating the text as paragraph 
(a) and by adding paragraph (b), to read as follows:


Sec. 230.420  Legibility of prospectus.

    (a) * * *
    (b) Where a prospectus is distributed through an electronic medium, 
issuers may satisfy legibility requirements applicable to printed 
documents, such as paper size, type size and font, bold-face type, 
italics and red ink, by presenting all required information in a format 
readily communicated to investors, and where indicated, in a manner 
reasonably calculated to draw investor attention to specific 
information. If material graphic, image and audio information is 
included in one version of a prospectus, but not in other versions, the 
issuer must include in the other versions a fair and accurate 
description or transcript of the omitted information.
    4. By amending Sec. 230.481 to add paragraph (h) to read as 
follows:


Sec. 230.481  Information required in prospectus.

* * * * *
    (h) Where a prospectus is distributed through an electronic medium, 
issuers may satisfy legibility requirements applicable to printed 
documents, such as paper size, type size and font, bold-face type, 
italics and red ink, by presenting all required information in a format 
readily communicated to investors, and where indicated, in a manner 
reasonably calculated to draw investor attention to specific 
information. If material graphic, image and audio information is 
included in one version of a prospectus, but not in other versions, the 
issuer must include in the other versions a fair and accurate 
description or transcript of the omitted information.
    5. By amending Sec. 230.482 by removing the note following 
paragraph (a)(7) and adding a note to paragraph (a)(6), to read as 
follows:


Sec. 230.482  Advertising by an investment company as satisfying 
requirements of section 10.

    (a) * * *
    (6) * * *
    Note to paragraph (a)(6). All advertisements made pursuant to this 
rule are subject to Rule 420 (17 CFR 230.420).
* * * * *
    6. By amending Sec. 230.605 by designating the text of paragraph 
(c) as paragraph (c)(1) and by adding paragraph (c)(2) to read as 
follows:


Sec. 230.605  Filing and use of the offering circular.

* * * * *
    (c)(1) * * *
    (2) Where an offering circular is distributed through an electronic 
medium, issuers may satisfy legibility requirements applicable to 
printed documents by presenting all required information in a format 
readily communicated to investors. If material graphic, image and audio 
information is included in one version of an offering circular, but not 
in other versions, the issuer must include in the other versions a fair 
and accurate description or transcript of the omitted information.
* * * * *

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

    7. The authority citation for Part 232 continues to read as 
follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 77sss(a), 
78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll(d), 79t(a), 80a-8, 80a-
29, 80a-30 and 80a-37.

    8. By amending Sec. 232.304 by revising the section heading, 
paragraphs (a), (b)(1), and (c) to read as follows:


Sec. 232.304  Graphic, image and audio material.

    (a) If a filer includes graphic, image or audio material in a 
document delivered to investors and others that cannot be reproduced in 
an electronic filing, the electronically filed version of that document 
shall include a fair and accurate narrative description, tabular 
representation or transcript of the omitted material. Such 
descriptions, representations or transcripts may be included in the 
text of the electronic filing at the point where the graphic, image or 
audio material is presented in the delivered version, or they may be 
listed in an appendix to the electronic filing. Immaterial differences 
between the delivered and electronically filed versions, such as 
pagination, color, type size or style, or corporate logo need not be 
described.
    (b) (1) The graphic, image and audio material in the version of a 
document delivered to investors and others shall be deemed part of the 
electronic filing and subject to the liability and anti-fraud 
provisions of the federal securities laws.
    (2) * * *
    (c) An electronic filer shall retain for a period of five years a 
copy of each document containing graphic, image or audio material where 
such material is not included in an electronic filing. The five-year 
period shall commence as of the filing date, or the date that appears 
on the document, whichever is later. Upon request, an electronic filer 
shall furnish to the Commission or its staff a 

[[Page 53471]]
copy of any or all of the documents contained in the file.
* * * * *

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

    9. The authority citation for Part 239 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77sss, 78c, 78l, 
78m, 78n, 78o(d), 78w(a), 78ll(d), 79e, 79f, 79g, 79j, 79l, 79m, 
79n, 79q, 79t, 80a-8, 80a-29, 80a-30 and 80a-37, unless otherwise 
noted.
* * * * *
    10. By amending Form F-7 (referenced in Sec. 239.37) by adding a 
note to Part I, Item 2, to read as follows:

    Note--The text of Form F-7 does not, and this amendment will 
not, appear in the Code of Federal Regulations.

Form F-7--Registration Statement Under the Securities Act of 1933

* * * * *

Part I--Information Required To Be Sent to Shareholders

* * * * *
Item 2. Information Legends
* * * * *
    Note to Item 2. If the home-jurisdiction document(s) are 
delivered through an electronic medium, the issuer may satisfy the 
legibility requirements for the required legends relating to type 
size and font by presenting the legends in any manner reasonably 
calculated to draw investor attention to it.
* * * * *
    11. By amending Form F-8 (referenced in Sec. 239.38) by adding a 
note to Part I, Item 2, to read as follows:

    Note--The text of Form F-8 does not, and this amendment will 
not, appear in the Code of Federal Regulations.

Form F-8--Registration Statement Under the Securities Act of 1933

* * * * *

Part I--Information Required To Be Delivered to Offerees or Purchasers

* * * * *
Item 2. Informational Legends
* * * * *
    Note to Item 2. If the home-jurisdiction document(s) are 
delivered through an electronic medium, the issuer may satisfy the 
legibility requirements for the required legends relating to type 
size and font by presenting the legends in any manner reasonably 
calculated to draw investor attention to it.
* * * * *
    12. By amending Form F-9 (referenced in Sec. 239.39) by adding a 
note to Part I, Item 2, to read as follows:

    Note--The text of Form F-9 does not, and this amendment will 
not, appear in the Code of Federal Regulations.

Form F-9--Registration Statement Under the Securities Act of 1933

* * * * *

Part I--Information Required To Be Delivered to Offerees or Purchasers

* * * * *
Item 2. Informational Legends
* * * * *
    Note to Item 2. If the home-jurisdiction document(s) are 
delivered through an electronic medium, the issuer may satisfy the 
legibility requirements for the required legends relating to type 
size and font by presenting the legends in any manner reasonably 
calculated to draw investor attention to it.
* * * * *
    13. By amending Form F-10 (referenced in Sec. 239.40) by adding a 
note to Part I, Item 3, to read as follows:

    Note.-- The text of Form F-10 does not, and this amendment will 
not, appear in the Code of Federal Regulations.

Form F-10--Registration Statement Under the Securities Act of 1933

* * * * *

Part I--Information Required To Be Delivered to Offerees or 
Purchasers

* * * * *
Item 3. Informational Legends
* * * * *
    Note to Item 3. If the home-jurisdiction document(s) are 
delivered through an electronic medium, the issuer may satisfy the 
legibility requirements for the required legends relating to type 
size and font by presenting the legends in any manner reasonably 
calculated to draw investor attention to it.
* * * * *
    14. By amending Form F-80 (referenced in Sec. 239.41) by adding a 
note to Part I, Item 2, to read as follows:

    Note.--The text of Form F-80 does not, and this amendment will 
not, appear in the Code of Federal Regulations.

Form F-80--Registration Statement Under the Securities Act of 1933

* * * * *

Part I--Information Required To Be Delivered to Offerees or Purchasers

* * * * *
Item 2. Informational Legends
* * * * *
    Note to Item 2. If the home-jurisdiction document(s) are 
delivered through an electronic medium, the issuer may satisfy the 
legibility requirements for the required legends relating to type 
size and font by presenting the legends in any manner reasonably 
calculated to draw investor attention to it.
* * * * *

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 
1934

    15. The authority citation for Part 240 continues to read in part 
as follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77eee, 77ggg, 
77nnn, 77sss, 77ttt, 78c, 78d, 78i, 78j, 78l, 78m, 78n, 78o, 78p, 
78q, 78s, 78w, 78x, 78ll(d), 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-
37, 80b-3, 80b-4 and 80b-11, unless otherwise noted.
* * * * *
    16. The authority citation following Sec. 240.14d-5 is removed.
    17. By amending Sec. 240.12b-12 by adding paragraph (e) to read as 
follows:


Sec. 240.12b-12  Requirements as to paper, printing and language.

* * * * *
    (e) Where a statement or report is distributed to investors through 
an electronic medium, issuers may satisfy legibility requirements 
applicable to printed documents, such as paper size and type size and 
font, by presenting all required information in a format readily 
communicated to investors. If material graphic, image and audio 
information is included in one version of a statement or report, but 
not in other versions, the issuer must include in the other versions a 
fair and accurate description or transcript of the omitted information.
    18. By amending Sec. 240.13e-3 by designating the instructions to 
paragraph (e)(3) (immediately following paragraph (e)(3)(ii)(B)) as 
``Instructions to paragraph (e)(3)'' and by adding instruction 3 
thereto, to read as follows:


Sec. 240.13e-3  Going private transactions by certain issuers or their 
affiliates.

* * * * *
    (e)(3) * * *
    Instructions to paragraph (e)(3).
    1. * * *
    2. * * *
    3. If the information delivered to security holders is distributed 
through an electronic medium and the legend required by paragraph 
(e)(3)(ii) is included, issuers may satisfy the legibility requirement 
relating to type size and font by presenting the legend in any manner 
reasonably calculated to draw security holder attention to it.
* * * * *
    19. By amending Sec. 240.13e-4 by revising paragraph (e)(1)(ii)(A), 
to read as follows:


Sec. 240.13e-4  Tender offers by issuers.

* * * * * 

[[Page 53472]]

    (e) * * *
    (1) * * *
    (ii) * * *
    (A) By mailing or otherwise furnishing promptly the statement 
required by paragraph (d)(1) of this section to each security holder 
whose name appears on the most recent shareholder list of the issuer;
* * * * *
    20. By amending Schedule 13E-4F (Sec. 240.13e-102) by adding a note 
to Item 2 of Part I, to read as follows:


Sec. 240.13e-102  Schedule 13E-4F. Tender offer statement pursuant to 
section 13(e)(1) of the Securities Exchange Act of 1934 and 
Sec. 240.13e-4 thereunder.

* * * * *

PART I--INFORMATION REQUIRED TO BE SENT TO SHAREHOLDERS

* * * * *
    Item 2. * * *
    Note to Item 2. If the home jurisdiction document(s) are 
delivered through an electronic medium, the issuer may satisfy the 
legibility requirements for the required legends relating to type 
size and fonts by presenting the legend in any manner reasonably 
calculated to draw security holder attention to it.
* * * * *
    21. By amending Sec. 240.14a-3 by designating the text of paragraph 
(b)(2) as (b)(2)(i) and by adding paragraph (b)(2)(ii), to read as 
follows:


Sec. 240.14a-3  Information to be furnished to security holders.

* * * * *
    (b) * * *
    (2)(i) * * *
    (ii) Where the annual report to security holders is delivered 
through an electronic medium, issuers may satisfy legibility 
requirements applicable to printed documents, such as type size and 
font, by presenting all required information in a format readily 
communicated to investors. If material graphic, image and audio 
information is included in one version of an annual report to security 
holders, but not in other versions, the issuer must include in the 
other versions a fair and accurate description or transcript of the 
omitted information.
* * * * *
    22. By amending Sec. 240.14a-5 by designating the text of paragraph 
(d) as paragraph (d)(1) and by adding paragraph (d)(2), to read as 
follows:


Sec. 240.14a-5  Presentation of information in proxy statement.

* * * * *
    (d)(1) * * *
    (2) Where a proxy statement is delivered through an electronic 
medium, issuers may satisfy legibility requirements applicable to 
printed documents, such as type size and font, by presenting all 
required information in a format readily communicated to investors. If 
material graphic, image and audio information is included in one 
version of a proxy statement, but not in other versions, the issuer 
must include in the other versions a fair and accurate description or 
transcript of the omitted information.
* * * * *
    23. By amending Sec. 240.14a-7 by adding a note at the end of the 
section, to read as follows:


Sec. 240.14a-7  Obligations of registrants to provide a list of, or 
mail soliciting material to, security holders.

* * * * *
    Note to Sec. 240.14a-7. Reasonably prompt methods of 
distribution to security holders may be used instead of mailing. If 
an alternative distribution method is chosen, the costs of that 
method should be considered where necessary rather than the costs of 
mailing.

    24. By amending Sec. 240.14c-4 by adding paragraph (d), to read as 
follows:


Sec. 240.14c-4  Presentation of information in information statement.

* * * * *
    (d) Where an information statement is delivered through an 
electronic medium, issuers may satisfy legibility requirements 
applicable to printed documents, such as type size and font, by 
presenting all required information in a format readily communicated to 
investors. If material graphic, image and audio information is included 
in one version of an information statement, but not in other versions, 
the issuer must include in the other versions a fair and accurate 
description or transcript of the omitted information.
    25. By amending Sec. 240.14c-7 by revising paragraph (c), to read 
as follows:


Sec. 240.14c-7  Providing copies of material for certain beneficial 
owners.

* * * * *
    (c) A registrant, at its option, may send by mail or other equally 
prompt means, its annual report to security holders to the beneficial 
owners whose identifying information is provided by record holders and 
respondent banks, pursuant to Sec. 240.14b-1(b)(3) and Sec. 240.14b-
2(b)(4) (ii) and (iii), provided that such registrant notifies the 
record holders and respondent banks at the time it makes the inquiry 
required by paragraph (a) of this section that the registrant will send 
the annual report to security holders to the beneficial owners so 
identified.
* * * * *
    26. By amending Sec. 240.14d-5 by adding a note at the end of the 
section, to read as follows:


Sec. 240.14d-5  Dissemination of certain tender offers by the use of 
stockholder lists and security position listings.

* * * * *
    Note to Sec. 240.14d-5. Reasonably prompt methods of 
distribution to security holders may be used instead of mailing. If 
alternative distribution methods are chosen, the costs of the 
distribution should be calculated using methods analogous to those 
required in connection with mailing.

    27. By amending Schedule 14D-1F (Sec. 240.14d-102) by adding a note 
to Item 2 of Part I, to read as follows:


Sec. 240.14d-102  Schedule 14D-1F. Tender offer statement pursuant to 
rule 14d-1(b) under the Securities Exchange Act of 1934.

* * * * *

Part I--Information Required To Be Sent to Shareholders

* * * * *

Item 2. Informational Legends

* * * * *
    Note to Item 2. If the home-jurisdiction document(s) are 
delivered through an electronic medium, the issuer may satisfy the 
legibility requirements for the required legends relating to type 
size and font by presenting the legend in any manner reasonably 
calculated to draw security holder attention to it.
* * * * *
    28. By amending Schedule 14D-9F (Sec. 240.14d-103) by adding a note 
to Item 2 of Part I, to read as follows:


Sec. 240.14d-103  Schedule 14D-9F. Solicitation/recommendation 
statement pursuant to section 14(d)(4) of the Securities Exchange Act 
of 1934 and rules 14d-1(b) and 14e-2(c) thereunder.

* * * * *

Part I--Information Required To Be Sent to Shareholders

* * * * *

Item 2. Informational Legends

* * * * *
    Note to Item 2. If the home jurisdiction document(s) are 
delivered through an electronic medium, the issuer may satisfy the 
legibility requirements for the required legends relating to type 
size and font by presenting the legend in any manner reasonably 
calculated to draw security holder attention to it.
* * * * * 

[[Page 53473]]


PART 270--GENERAL RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 
1940

    29. The authority citation for Part 270 continues to read, in part, 
as follows:

    Authority: 15 U.S.C. 80a-1 et seq., 80a-37, 80a-39, unless 
otherwise noted;
* * * * *
    30. The authority citations following Sec. 270.8b-12 are removed.
    31. By amending Sec. 270.8b-12 by adding paragraph (f) to read as 
follows:


Sec. 270.8b-12  Requirements as to paper, printing and language.

* * * * *
    (f) Where a registration statement or report is distributed through 
an electronic medium, issuers may satisfy legibility requirements 
applicable to printed documents, such as paper size, type size and 
font, bold-face type, italics and red ink, by presenting all required 
information in a format readily communicated to investors, and where 
indicated, in a manner reasonably calculated to draw investor attention 
to specific information. If material graphic, image and audio 
information is included in one version of a registration statement or 
report, but not in other versions, the issuer must include in the other 
versions a fair and accurate description or transcript of the omitted 
information.
    32. By amending Sec. 270.30d-1 by revising the word ``mailed'' in 
paragraph (c) to read ``transmitted'', revising the word ``mailed'' in 
the last sentence of paragraph (d)(2) to read ``transmitted'', and 
revising the word ``mailed'' in paragraph (e) to read ``transmitted''.
    33. By amending Sec. 270.30d-2 by removing from the first sentence 
the phrase ``by mail, postage prepaid,''; and in the second sentence, 
by revising the word ``mailed'' to read ``transmitted'' and by revising 
the word ``mailing'' to read ``transmitting''.

    Dated: October 6, 1995.

    By the Commission.
Jonathan G. Katz,
Secretary.

    Note: Appendix A to the Preamble will not appear in the Code of 
Federal Regulations.

Appendix A

Regulatory Flexibility Act Certification

    I, Arthur Levitt, Chairman of the Securities and Exchange 
Commission, hereby certify, pursuant to 5 U.S.C. 605(b), that the 
proposed amendments to Rule 253 of Regulation A, Rules 420, 481 and 
482 of Regulation C, Rule 605 of Regulation E, Rule 304 of 
Regulation S-T, Forms F-7, F-8, F-9, F-10 and F-80, Rule 12b-12, 
Rule 13e-3, Rule 13e-4, Schedule 13E-4F, Rule 14a-3, Rule 14a-5, 
Rule 14a-7, Rule 14c-4, Rule 14c-7, Rule 14d-5, Schedule 14D-1F, 
Schedule 14D-9F, Rule 8b-12, Rule 30d-1 and Rule 30d-2, as set forth 
in Securities Act Release Number 7234, would not, if adopted, impose 
additional disclosure or delivery requirements or otherwise alter 
current requirements, and therefore would not have a significant 
economic impact on a substantial number of small entities.
    The Commission's interpretive release on electronic distribution 
of information (Securities Act Release No. 7233) clearly indicates 
that current rules permit the use of alternative electronic delivery 
methods to satisfy federal securities law disclosure requirements. 
The technical amendments proposed in Securities Act Release No. 7234 
are intended to make it clear that one can comply with current rules 
even if the delivery method employed is electronic rather than paper 
based. No new disclosure or delivery obligations are proposed, nor 
are old methods of disclosure or delivery being terminated. Since no 
changes to substantive disclosure or delivery requirements are being 
proposed, the proposals will not have a significant economic impact 
on businesses, large or small.
    It is anticipated that there will be economic benefits resulting 
from the electronic distribution of information. Those benefits, 
however, will be derived from advances in technology, and not from 
the minor technical amendments that are the subject of this 
proposal.

    Dated: October 6, 1995.
Arthur Levitt,
Chairman.
[FR Doc. 95-25390 Filed 10-12-95; 8:45 am]
BILLING CODE 8010-01-P