[Federal Register Volume 61, Number 61 (Thursday, March 28, 1996)]
[Notices]
[Pages 13906-13907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7538]



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

SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37009; File No. S7-8-96]


Study and Report on Protections for Senior Citizens and Qualified 
Retirement Plans

AGENCY: Securities and Exchange Commission.

ACTION: Request for comments.

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

SUMMARY: The Private Securities Litigation Reform Act of 1995 directs 
the Securities and Exchange Commission (the ``Commission'') to 
determine whether investors that are senior citizens or qualified 
retirement plans require greater protection against securities fraud 
than is currently provided under the federal securities laws; and 
whether investors that are senior citizens or qualified retirement 
plans have been adversely impacted by abusive or unnecessary securities 
fraud litigation, and whether the current provisions of the federal 
securities laws are sufficient to protect them from such litigation. 
The Commission is soliciting comment on these questions and on the more 
general question of the role of senior citizens and qualified 
retirement plans in our securities markets.

DATES: Comments must be received no later than April 30, 1996.

ADDRESSES: Persons wishing to respond should file three copies of their 
written comments with Jonathan G. Katz, Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. 
Comments may also be submitted electronically at the following E-mail 
address: rule-commentssec.gov. All written comments should refer to 
File No. S7-8-96; this file number should be included on the subject 
line if E-mail is used. The comments will be available for public 
inspection and copying in the Commission's Public Reference Room, 450 
Fifth Street, N.W., Washington, D.C. 20549. Electronically submitted 
comments will be posted on the Commission's Internet web site (http://
www.sec.gov).

FOR FURTHER INFORMATION CONTACT: John W. Avery, Office of the General 
Counsel, at (202) 942-0816; or Ann M. Gerg, Office of the General 
Counsel, at (202) 942-0857.

SUPPLEMENTARY INFORMATION:

I. Introduction

    On December 22, 1995, Congress overrode the President's veto and 
enacted the Private Securities Litigation Reform Act of 1995 (the 
``Act''). Section 106 of the Act requires the Commission to:
    (1) Determine whether investors that are senior citizens or 
qualified retirement plans require greater protection against 
securities fraud than is provided in the Act and the amendments made by 
the Act; and
    (2) Determine whether investors that are senior citizens or 
qualified retirement plans have been adversely impacted by abusive or 
unnecessary securities fraud litigation, and whether the provisions in 
the Act or amendments made by the Act are sufficient to protect their 
investments from such litigation.
    If the Commission determines that greater protections are 
necessary, it must submit a report to the Congress by June 19, 1996.
    For purposes of section 106 of the Act, the term ``senior citizen'' 
means an individual who is 62 years of age or older, and the term 
``qualified retirement plan'' has the same meaning as in section 
4974(c) of the Internal Revenue Code of 1986.

II. Background

    Senior citizens and qualified retirement plans are substantial 
participants in our financial markets and play a vital role in capital 
formation. As the population ages, the importance of seniors and 
qualified retirement plans to our markets will increase. Many employers 
are moving away from traditional pension plans in which the plan 
participants have little, if any, investment discretion, to defined 
contribution plans in which the participants have significant 
investment discretion. Thus, seniors and qualified retirements plans 
may be more vulnerable to securities fraud and to the effects of 
abusive securities fraud litigation.
    The Commission believes that it would be valuable to examine 
generally

[[Page 13907]]
the role of senior citizens and qualified retirement plans as investors 
and their importance to our markets and to capital formation, and to 
consider whether the federal securities laws provide adequate 
protections to senior citizens and qualified retirement plans against 
securities fraud and abusive securities litigation. The Commission also 
believes that it would be appropriate to consider the special needs of 
senior citizens and qualified retirement plans and whether changes to 
the federal securities laws or to the commission's rules or regulations 
are necessary or desirable to address those needs.

III. Solicitation of Public Comment

    The Commission seeks comment on the issues and questions described 
above and, more particularly, on the following questions with respect 
to investors that are senior citizens or qualified retirement plans:
    1. What is the rule and importance of senior citizens and qualified 
retirement plans as investors in our financial markets, and how is that 
role and importance changing?
    2. What are their special needs as investors, and what changes to 
the federal securities laws or to the Commission's rules or regulations 
may be necessary or desirable to address those needs?
    3. Do they require greater protection against securities fraud than 
is provided in the Act and the amendments made by the Act, or than is 
provided under the federal securities laws?
    4. Have they been adversely impacted by abusive or unnecessary 
securities fraud litigation? Are the provisions in the Act or 
amendments made by the Act sufficient to protect their investments from 
such litigation, or, more generally, are the provisions of the federal 
securities laws sufficient to protect their investments from such 
litigation?
    5. What changes to the federal securities laws or to the 
Commission's rules or regulations may be necessary or desirable to 
thoroughly protect senior citizens and qualified retirement plans 
against securities fraud and abusive or unnecessary securities fraud 
litigation?
    Commenters are requested to direct their comments to the special 
needs and circumstances of senior citizens and qualified retirement 
plans. Comments should not simply voice support for, or criticism of, 
the Act generally.

    By the Commission.

    Dated: March 21, 1996.
Jonathan G. Katz,
Secretary.
[FR Doc. 96-7538 Filed 3-27-96; 8:45 am]
BILLING CODE 8010-01-M