[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.
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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.
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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.
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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.
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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).
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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