[Federal Register Volume 61, Number 134 (Thursday, July 11, 1996)]
[Proposed Rules]
[Pages 36521-36534]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17579]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 240

[Release No. 34-37403; File No. S7-16-96; International Series--1001]
RIN 3235-AG81


Amendments to Beneficial Ownership Reporting Requirements

AGENCY: Securities and Exchange Commission.

ACTION: Reproposed rules.

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SUMMARY: In accordance with a recent recommendation of the Report of 
the Task Force on Disclosure Simplification published March 5, 1996, 
the Securities and Exchange Commission (``Commission'') today is 
publishing for comment a proposal to amend the rules relating to the 
reporting of beneficial ownership in publicly-held companies. Similar 
amendments were proposed in 1989 but were not acted upon by the 
Commission. These reproposals would make Schedule 13G available, in 
lieu of Schedule 13D, to all investors beneficially owning less than 20 
percent of the outstanding class that have not acquired or held the 
securities for the purpose of and do not have the effect of changing or 
influencing the control of the issuer of the securities. The purposes 
of the reproposals are to improve the effectiveness of the beneficial 
ownership reporting scheme and to reduce the reporting obligations of 
passive investors.

DATES: Comments should be received on or before September 9, 1996.

ADDRESSES: Comments should be submitted in triplicate to Jonathan G. 
Katz, Secretary, U.S. 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: [email protected]. 
Comment letters should refer to File No. S7-16-96; this file number 
should be

[[Page 36522]]

included on the subject line if e-mail is used. All comments received 
will be available for public inspection and copying in the Commission's 
public reference room at the same address. Electronically submitted 
comments will be posted on the Commission's Internet web site (http://
www.sec.gov).

FOR FURTHER INFORMATION CONTACT: Dennis O. Garris, Special Counsel, 
Office of Mergers and Acquisitions, Division of Corporation Finance, 
Securities and Exchange Commission at (202) 942-2920, 450 Fifth Street 
N.W., Washington, D.C. 20549.

SUPPLEMENTARY INFORMATION: The Commission is reproposing for comment 
amendments to Regulation 13D-G 1 and Schedules 13D and 13G.
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    \1\ Rules 13d-1, 13d-2, and 13d-7 [17 CFR 240.13d-1, 240.13d-2, 
and 240.13d-7].
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I. Background and Overview

A. Current Regulatory Scheme

    The beneficial ownership reporting requirements embodied in 
Sections 13(d) 2 and 13(g) 3 of the Securities Exchange Act 
of 1934 (``Exchange Act'') 4 and the regulations adopted 
thereunder 5 are intended to provide investors and the subject 
issuer with information about accumulations of securities that may have 
the potential to change or influence control of the issuer. The 
statutory and regulatory framework also establishes a comprehensive 
reporting system for gathering and disseminating information about the 
ownership of equity securities.6 These provisions require, subject 
to exceptions, that any person who acquires beneficial ownership of 
more than five percent of a class of equity securities registered under 
Section 12 of the Exchange Act 7 and other specified equity 
securities (collectively, ``subject securities'') report such 
acquisition on Schedule 13D within 10 calendar days. That report must 
be amended promptly to report any material change in the information 
provided, including any acquisition or disposition of one percent or 
more of the class.8 Persons holding more than five percent of a 
class of subject securities at the end of the calendar year, but who 
have not made an acquisition subject to Section 13(d) (``Exempt 
Investors''),9 are required instead to file and amend a short-form 
Schedule 13G within 45 days after the close of the calendar year. The 
Schedule 13G and amendments need only report securities that are 
beneficially owned as of the last day of the year.
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    \2\ 15 U.S.C. 78m(d).
    \3\ 15 U.S.C. 78m(g).
    \4\ 15 U.S.C. 78a et seq.
    \5\ Regulation 13D-G, Rules 13d-1 through 13d-7 [17 CFR 240.13d-
1 through 240.13d-7].
    \6\ For a more extensive discussion of Sections 13(d) and 13(g), 
and Regulation 13D-G adopted to implement both statutory provisions, 
see Securities Exchange Act Release No. 26598 (March 8, 1989) [54 FR 
10552] (``Proposing Release'').
    \7\ 15 U.S.C. 781.
    \8\ Rule 13d-2(a).
    \9\ Persons who acquire all their securities prior to the issuer 
registering under the Exchange Act are not subject to Section 13(d), 
and persons who acquire not more than two percent of a class of 
subject securities within a 12-month period are exempted from 
Section 13(d) by Section 13(d)(6)(B), but in both cases are subject 
to Section 13(g). Section 13(d)(6)(A) exempts acquisitions of 
subject securities acquired in a stock-for-stock exchange which is 
registered under the Securities Act of 1933.
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    Schedule 13G is also available to specified institutional investors 
(``Qualified Institutional Investors'') 10 that acquired or hold 
the securities in the ordinary course of business and without a purpose 
or effect or in connection with a transaction having a purpose or 
effect, of changing or influencing control of the issuer. These 
Qualified Institutional Investors likewise only report their greater 
than five percent positions held as of the close of the year either in 
an initial report or amendment in the case of any change in the 
information provided, except if they own more than 10 percent as of the 
close of any month, in which case a Schedule 13G must be filed or 
amended within 10 calendar days reporting the holdings as of the close 
of the month.11 These flexible reporting requirements are designed 
to minimize the costs of monitoring positions in securities acquired in 
the ordinary course of the investor's business.
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    \10\ Such specified institutional investors include a broker or 
dealer registered under Section 15(b) of the Exchange Act [15 U.S.C. 
78o(b)], a bank as defined in Section 3(a)(6) of the Exchange Act 
[15 U.S.C. 78c(a)(6)], an insurance company as defined in Section 
3(a)(19) of the Exchange Act [15 U.S.C. 78c(a)(19)], an investment 
company registered under Section 8 of the Investment Company Act of 
1940 [15 U.S.C. 80a-8], an investment adviser registered under 
Section 203 of the Investment Advisers Act of 1940 [15 U.S.C. 80b-1 
et seq.], an employee benefit plan or pension fund that is subject 
to the provisions of the Employee Retirement Income Security Act of 
1974 [codified principally in 29 U.S.C. 1001-1461], and related 
holding companies and groups (collectively, ``institutional 
investors''). Rule 13d-1(b)(1)(ii) [17 CFR 240.13d-1(b)(1)(ii)].
    \11\ Rule 13d-1(b)(2).
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B. Proposals for Reform

    In 1989, the Commission proposed amendments to Regulation 13D-G to 
improve the effectiveness of the reporting scheme and to lessen the 
compliance costs to investors that have not acquired or held the 
securities with the purpose or effect of changing or influencing the 
control of the issuer.12 The 1989 proposed amendments were not 
acted upon by the Commission. The amendments proposed today are similar 
to the 1989 proposals except, as more fully discussed below, the 
Commission is not reproposing a limitation on the amount of securities 
that a Qualified Institutional Investor can report on Schedule 13G and 
the Commission is proposing that the new class of persons that would be 
eligible to use Schedule 13G would have the same amendment requirements 
that currently apply to Schedule 13D filings, as opposed to the more 
liberal amendment requirements currently applicable to Schedule 13G.
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    \12\ Exchange Act Release No. 26598 (March 8, 1989) [54 FR 
10552]. The Commission received fifteen comment letters which are 
available for public inspection and copying at the Commission's 
Public Reference Room in Washington, D.C. (File No. S7-8-89).
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    The current reporting scheme requires most persons other than 
institutions to file detailed disclosure reports regardless of the 
reasons for the acquisition. As a result, the current reporting scheme 
may place unnecessary disclosure burdens on persons whose acquisitions 
do not implicate the Williams Act's concern with transactions affecting 
the control of issuers. To further the Commission's goals of disclosure 
simplification and efficiency, as stated in the Report of the Task 
Force on Disclosure Simplification published March 5, 1996, the 
amendments are being reproposed at this time to improve the 
effectiveness of the beneficial ownership reporting scheme and to 
reduce the reporting obligations of all investors that acquire or hold 
the securities without the purpose or the effect of changing or 
influencing control of the issuer by permitting them for the first time 
to report on Schedule 13G. Since the Commission first proposed to 
exempt investors that do not have a disqualifying purpose or effect 
from the Schedule 13D filing requirements, initial Schedule 13D filings 
have increased from 2,850 in fiscal 1988 to 3,347 in fiscal 1995, a 17 
percent increase. Data provided by the Commission's Office of Economic 
Analysis indicates that 76 percent of the Schedules 13D studied by that 
office did not disclose a purpose or effect of changing or influencing 
control of the issuer and, therefore, would benefit from the amendments 
proposed today.13 The reduced number of Schedule 13D filings would 
allow the marketplace, as well as the staff of the Commission, to focus 
more quickly on acquisitions

[[Page 36523]]

involving the potential to change or influence control.
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    \13\ The sample included 110 Schedules 13D filed from November 
10, 1994 to December 30, 1994.
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    Accordingly, in addition to the two existing categories of Schedule 
13G filers (Qualified Institutional Investors and Exempt Investors), a 
third category (``Passive Investors'') 14 would be created, 
significantly expanding the classes of persons eligible to file on the 
short form. Any person who acquires or holds more than five percent of 
a class of subject securities and does not have a disqualifying purpose 
or effect would be permitted to file a short-form report on Schedule 
13G within 10 calendar days after the acquisition, rather than the 
long-form report on Schedule 13D.15 A Qualified Institutional 
Investor would remain eligible to file a short-form report on Schedule 
13G 45 days after the year's end, provided that the requirements of 
amended Rule 13d-1(b)(1) are satisfied. Exempt Investors would continue 
to file their initial Schedule 13G within 45 calendar days after the 
calendar year in which they became subject to Section 13(g) and Rule 
13d-1(c).
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    \14\ The term ``Passive Investors'' is used in this release to 
refer to shareholders beneficially owning more than five percent of 
the class of subject securities and who can certify that the subject 
securities were not acquired or held for the purpose of and do not 
have the effect of changing or influencing the control of the issuer 
of such securities and were not acquired in connection with or as a 
participant in any transaction having such purpose or effect. See 
proposed Rule 13d-1(b)(2) and revised Item 10 of Schedule 13G. 
Shareholders that are unable to certify to this effect are 
considered to have, for purposes of this release, a ``disqualifying 
purpose or effect''.
    \15\ Schedule 13D requires more disclosure than Schedule 13G. 
The following are the primary disclosures required by Schedule 13D 
that are not required by Schedule 13G: (i) the source and amount of 
funds used to purchase the securities; (ii) the purpose of the 
acquisition of the securities and any plans or proposals that the 
reporting person has involving the issuer including, among other 
things, extraordinary transactions and changes of control; (iii) a 
description of transactions in the securities reported on in the 
sixty days prior to the filing of the schedule; (iv) a description 
of any contracts or arrangements involving the securities of the 
issuer; and, (v) a requirement to file copies of any written 
contracts or arrangements described in the Schedule 13D as exhibits 
to the schedule.
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    The rule amendments would subject Passive Investors filing Schedule 
13G in lieu of Schedule 13D to the same amendment requirements that 
currently apply to Schedule 13D. Additionally, Passive Investors would 
be subject to a proposed 20 percent limit on the amount of an issuer's 
securities that may be reported on Schedule 13G and would be required 
to file a Schedule 13D within 10 calendar days of acquiring 20 percent 
or more of the securities. Upon acquiring 20 percent or more, the 
investor would be prohibited from acquiring additional securities or 
from voting or directing the voting of the securities until filing that 
schedule (a ``standstill period''). The Commission is not reproposing a 
percentage limit to reporting on Schedule 13G for Qualified 
Institutional Investors.
    Under the proposed amendments, Passive Investors that are no longer 
able to certify that they did not acquire or do not hold with a 
disqualifying purpose or effect would be required to file a Schedule 
13D within 10 calendar days of the change in purpose. An investor 
required to file a Schedule 13D because it has changed its investment 
purpose would be subject to a waiting period (``cooling-off period'') 
from the time of the change in investment purpose until the expiration 
of the tenth calendar day from the date of the filing of a Schedule 
13D, during which time such person could not vote or direct the voting 
of the subject securities, or acquire an additional beneficial 
ownership interest in any securities either of the issuer or of any 
person controlling the issuer.
    In 1992 the Commission revised the proxy rules to exempt certain 
communications from the proxy regulation and disclosure requirements. 
The 1992 proxy rule amendments were justified in part because Section 
13(d) would continue to require disclosure of concerted activities by 
and among groups of significant shareholders regarding voting 
matters.16 Following the 1992 proxy reform, some commentators have 
continued to express the concern that Section 13(d) has a potential 
chilling effect on a shareholder's ability to take full advantage of 
the proxy rule exemptions, since actions taken pursuant to the proxy 
exemptions may be interpreted to be inconsistent with the 
certifications necessary for Qualified Institutional Investors to file 
on Schedule 13G or such actions may lead to a finding of a ``group'' 
under Rule 13d-5(b)(1).17 Comment is requested as to whether 
Section 13(d) reporting obligations restrict a shareholder's ability to 
use the proxy rule exemptions and whether relief, in addition to that 
proposed today, from Schedule 13D filing obligations with respect to 
soliciting activities is necessary and appropriate.
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    \16\ See Exchange Act Release No. 31326, Section I (October 16, 
1992) [57 FR 48276]; testimony of Richard C. Breeden, Chairman of 
the Securities and Exchange Commission, before the Subcommittee on 
Securities of the Committee on Banking, Housing, and Urban Affairs, 
United States Senate (October 17, 1991).
    \17\ In April 1994, the Council of Institutional Investors 
submitted a rulemaking petition to allow institutions that incur a 
Schedule 13D filing obligation as a result of exempt soliciting 
activities to report their beneficial ownership on a short form 
instead. The petition requested relief from Section 13(d) filing 
obligations for Schedule 13G eligible shareholders participating in 
communications covered by the two principal exemptions from the 
proxy rules. Under the petition, persons engaged in exempt 
solicitations would only be required to file a new short form 
disclosure statement and they would not lose their Schedule 13G 
eligibility. The petition is available for inspection and copying at 
the Commission's Public Reference Room in Washington, D.C. (File 4-
372).
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    Finally, the Commission is proposing amendments to the schedules 
and technical amendments to the beneficial ownership rules along with 
additional related and clarifying amendments.

II. Proposed Amendments to Regulation 13D-G

A. Expansion of the Class of Investors Eligible to Report on Schedule 
13G

    The Commission is reproposing that Regulation 13D-G be amended to 
permit Passive Investors to use the short-form Schedule 13G.18 
Passive Investors would file the Schedule within 10 calendar days after 
acquiring beneficially more than five percent of a class of subject 
securities. Persons unable or unwilling to certify that they do not 
have a disqualifying purpose or effect because, for example, the 
possibility exists that they may seek to exercise or influence control, 
would be ineligible to file a Schedule 13G and would be required to 
file a Schedule 13D. The comment letters on the 1989 proposals 
reflected significant consensus supporting the Commission's expansion 
of the eligible class of Schedule 13G filers.19
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    \18\ Proposed Rule 13d-1(b)(2).
    \19\ Of the 15 comment letters received by the Commission on the 
proposals, 13 commenters generally supported the expansion and two 
commenters opposed the expansion.
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    The Commission is reproposing that Passive Investors be allowed to 
choose whether to report on Schedule 13G or Schedule 13D.20 The 
Commission preliminarily believes that Passive Investors should be 
given the flexibility to determine which Schedule is most appropriate 
given their circumstances. The fact that an investor can represent

[[Page 36524]]

that it does not have a disqualifying purpose or effect but still 
chooses to file on a Schedule 13D may provide important information 
concerning the filing person's intent. Accordingly, the Commission is 
reproposing that the use of Schedule 13G, in lieu of Schedule 13D, 
remain optional for those persons eligible to use Schedule 13G. 
However, the Commission requests comment as to the appropriateness of 
this approach and whether Schedule 13G eligible persons would choose to 
file on Schedule 13D to avoid the cooling-off period upon a change in 
investment purpose. Comment is also requested as to whether a mandatory 
filing approach would better serve the market by allowing investors to 
focus on those acquisitions that presently represent an attempt to 
influence or change control of the issuer.
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    \20\ In the 1989 Proposing Release the Commission requested 
comment upon whether reporting on a Schedule 13G (as opposed to 
Schedule 13D) should be permissive or mandatory for investors that 
do not have a disqualifying purpose or effect. Commenters opposing a 
mandatory filing requirement suggested that the detailed disclosures 
contained in a Schedule 13D may be more appropriate in situations 
where the investor's purpose or effect may abruptly change to a 
disqualifying purpose or effect and, accordingly, the use of the 
Schedule 13D, in lieu of the Schedule 13G, should be optional. 
Commenters supporting mandatory use of Schedule 13G believed that 
such a requirement would enhance the marketplace's ability to focus 
on those acquisitions representing a disqualifying purpose or effect 
and would deter Schedule 13G eligible filers from filing on Schedule 
13D in order to avoid the cooling-off period upon a change in 
purpose or effect.
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B. Filing Periods for Passive Investors Filing on Schedule 13G

    As reproposed, Passive Investors choosing to file a Schedule 13G 
would file the schedule within 10 calendar days of crossing the five 
percent threshold. Requiring the filing within 10 days, rather than the 
45 days following year end currently applicable to Schedule 13G filers, 
would provide more timely notice to the market and shareholders of the 
existence of voting blocks that have the potential of affecting control 
of the issuer.
    Under the proposed rules, however, Passive Investors filing on 
Schedule 13G would still be subject to the same amendment requirements 
currently applicable to Schedule 13D.21 This approach differs from 
the 1989 proposals, which proposed that Passive Investors filing on 
Schedule 13G be subject merely to the more liberal amendment 
requirements currently applicable to Qualified Institutional Investors 
filing on Schedule 13G.22 One commenter on the 1989 proposals 
expressed the concern that the 1989 proposals would not have required 
timely disclosure of material changes, including increases in ownership 
of the issuer's securities. For example, under the 1989 proposals, a 
Passive Investor would only have been required to file an amendment to 
the Schedule 13G to disclose an acquisition of ownership in excess of 
10 percent of such securities within 10 days after the end of the month 
in which the person's ownership exceeded 10 percent of the class as of 
the end of the month. The Commission preliminarily believes that, 
although Passive Investors do not have a disqualifying purpose or 
effect, the market may benefit from more timely notice of material 
changes in ownership and material changes in the information previously 
reported by such persons.
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    \21\ Rule 13d-2(a) requires that an amendment to Schedule 13D be 
filed promptly upon any material change in the facts set forth in 
the schedule, including any material increase or decrease in the 
percentage of the class beneficially owned. Acquisitions or 
dispositions of one percent or more of the class are deemed to be 
``material'' for the purposes of this rule. Acquisitions or 
dispositions of less than one percent of the class may be material 
depending upon the facts and circumstances.
    \22\ Under Rule 13d-2(b) an amendment to the Schedule 13G would 
be due 45 calendar days after the close of the year to report only 
any change that occurred in the information previously reported on 
Schedule 13G as of the last day of the year. However, under Rule 
13d-1(b)(2) if their beneficial ownership exceeds 10 percent of the 
class at the end of any month, an amendment would be required to be 
filed within 10 days after the end of that month, as well as within 
10 days after the end of any month in which their ownership 
increases or decreases by more than five percent of such class.
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    In addition, by providing that the market will receive notice of 
material changes in the amount beneficially owned by persons filing 
under this new category of ``Passive Investors'', there is less of an 
incentive for those who may ultimately have a control intent to use 
Schedule 13G for the purpose of being able to acquire, for example, up 
to 9.9 percent of an issuer's stock without ever triggering any 
reporting requirement or disclosure to the market other than, perhaps, 
a prior filing of a five percent ownership interest. Likewise, without 
this amendment requirement a Passive Investor could increase a 
securities holding from just over 10 percent to just under 20 percent 
without any reporting or disclosure to the market until 10 days after 
the end of the month in which the 15 percent threshold was crossed. In 
the past, stock accumulation programs have taken advantage of the 
current statutory ``window'' in the Section 13(d) reporting regime. 
Comment is requested as to whether providing for current Schedule 13G 
amendment procedures as opposed to the more stringent Schedule 13D 
amendment procedures, for persons who qualify as Passive Investors, 
would exacerbate that problem, thereby decreasing investor protection 
and the availability of timely information provided to the market.
    Comment is requested as to whether it is necessary to require that 
Passive Investors filing on Schedule 13G be subject to the more 
stringent amendment requirements currently applicable to Schedule 13D. 
Would more frequent amendments by Passive Investors provide 
sufficiently useful information to investors, the market and issuers to 
justify the filing burden on Passive Investors? Would the proposed 
standstill 23 and cooling-off 24 provisions provide 
sufficient protection from the abuse noted if the more lenient 
amendment requirements were adopted? If so, please explain.
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    \23\ Under the proposed rules, Passive Investors would be 
required to file a Schedule 13D within 10 days of the date their 
beneficial ownership equals or exceeds 20 percent of the class and 
would, upon such acquisition, be subject to a standstill period 
during which they could not vote their shares or acquire additional 
shares of the class until the Schedule 13D is filed. See Section 
II.D. infra.
    \24\ Under the proposed rules, if a Passive Investor develops a 
disqualifying purpose or effect, the investor would be subject to a 
cooling-off period until 10 days after the filing of a Schedule 13D 
during which period they could not vote their shares or acquire 
additional securities. See Section II.C. infra.
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    Alternatively, would it be more appropriate to require Passive 
Investors to file an annual amendment for any material change in the 
information previously reported (like a Qualified Institutional 
Investor) but also file an amendment promptly upon acquiring 10 percent 
or more? Thereafter, the Passive Investor would promptly report any 
change in position of five percent or more (rather than, as with 
Qualified Institutional Investors, only five percent changes in 
position as of the last day of the month and amending within 10 days 
thereafter).25 Should crossing each of these thresholds trigger a 
requirement that the Passive Investor cease voting and acquiring 
additional securities until the amendment is filed? Would that have any 
deterrent effect to the use of Schedule 13G where substantial 
acquisitions are planned? Conversely, does the proposed requirement to 
report promptly any material changes in position render the proposed 20 
percent limitation on the use of Schedule 13G by Passive Investors and 
accompanying standstill period unnecessary? The Commission is 
considering for adoption each of these combinations of amendment 
requirements, cooling-off periods, and standstill periods.
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    \25\ One commenter on the 1989 proposals suggested requiring an 
amendment at two percent intervals.
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    The rules would continue to permit Qualified Institutional 
Investors to file the Schedule 13G within 45 days after calendar year 
end and without being subject to a 20 percent limitation on their 
holdings. Qualified Institutional Investors would continue to be 
required to certify that the subject securities were acquired in the 
ordinary course of business and not with the purpose nor with the 
effect of changing or influencing the control of the issuer.26

[[Page 36525]]

Even where an institutional investor is unable to make the ``ordinary 
course of business'' certification 27 it would still be permitted 
to file on Schedule 13G under the Passive Investor provision so long as 
it does not have a disqualifying purpose or effect. The Passive 
Investor provision, however, would require both types of investors, 
institutional and non-institutional, to file the Schedule 13G within 10 
calendar days of the acquisition. Furthermore, such institutions would 
be required to file an amendment to their Schedule 13G within 10 
calendar days of that change in status to disclose the change.28 
Comment is requested as to whether such institutional investors should 
be subject to a standstill period until the filing of the Schedule 13G 
amendment. Likewise, an institution unable to make the ``ordinary 
course of business'' certification would also be subject to the 20 
percent limitation.
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    \26\ The Commission proposes to revise the certification on the 
Schedule 13G for Qualified Institutional Investors to provide that 
such investors certify that the securities were acquired and held in 
the ordinary course of business and were not acquired or held for 
the purpose of and do not have the effect of changing or influencing 
the control of the issuer of such securities and were not acquired 
or held in connection with or as a participant in any transaction 
having such purpose or effect (emphasis added). This proposed 
amendment to the certification is to conform the language of the 
certification to proposed Rule 13d-1(b)(4)(i)(A).
    \27\ In 1989, the Commission requested comment on the 
appropriateness of continuing to require the ordinary course of 
business certification. The sole commenter expressing a view on this 
matter stated that the ordinary course of business requirement is 
unnecessary when institutional investors acquire subject securities 
for passive purposes.
    Congress recognized that the Section 13(d) statutory framework 
could have a significant impact on the reporting obligations of 
certain institutional investors and professionals in the securities 
business. Because such persons often acquire securities in the 
ordinary course of business and not with a view toward influencing 
control, in 1970 Congress specifically provided in Section 13(d)(5) 
that the Commission could permit the filing of a short form 
acquisition notice upon the determination that the securities were 
acquired in the ordinary course of business. Although the Commission 
proposes to eliminate that requirement for Passive Investors relying 
on proposed Rule 13d-1(b)(2), the certification in its present form 
will be retained with respect to institutions relying on the more 
liberal filing requirement under Rule 13d-1(b)(1). As a result, 
institutions would only have to report beneficial ownership of 
equity securities acquired and held in the ordinary course of 
business to the extent they owned more than five percent of the 
class at year end (or more than 10 percent at the end of any month). 
Proposed Rules 13d-1(b)(1) and (3).
    \28\ Proposed Rule 13d-1(b)(6)(ii).
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    In addition, as reproposed, all Exempt Investors would continue to 
be able to file Schedule 13G within 45 days after the close of the 
calendar year, and would not be subject to the 20 percent 
limitation.29 The exempt holdings do not appear to present a 
potential for affecting control of the issuer that should require 
earlier notice to the market and shareholders.
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    \29\ Proposed Rule 13d-1(c).
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C. 13D Filing Requirement and Cooling-Off Period for Changes in 
Investment Purpose or Effect

    As reproposed, Qualified Institutional Investors and Passive 
Investors that can no longer certify that they do not hold with a 
disqualifying purpose or effect must file a Schedule 13D no later than 
10 calendar days after the change in investment purpose.30 A 
``cooling-off'' period would commence at the time the reporting person 
determines that it holds the subject securities with a disqualifying 
purpose or effect until the expiration of the tenth calendar day from 
the date of the filing of a Schedule 13D. This ``cooling-off'' period 
differs from the period currently required for Qualified Institutional 
Investors.31 That period does not commence until the date of the 
filing of the Schedule 13D and creates a potential window between the 
time of the change in the purpose or effect and the ``prompt'' filing 
of a Schedule 13D during which the reporting person could acquire 
additional shares. As reproposed, the new rule would prohibit any such 
purchases from the moment of the change until the expiration of the 
tenth calendar day from the date of the filing of the Schedule 13D. 
During the cooling-off period, the rule would prohibit a person from 
voting or directing the voting of the subject securities or acquiring 
beneficial ownership of any equity securities of the issuer or any 
person controlling the issuer.32
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    \30\ Proposed Rule 13d-1(b)(4)(i).
    \31\ See Rule 13d-1(b)(3)(ii).
    \32\ In connection with the 1989 proposals, the Commission 
requested comment on the necessity of a cooling-off period and 
whether 10 calendar days was the appropriate period. Seven 
commenters addressed this issue, and all seven generally supported 
the concept of a cooling-off period. Four fully supported the 10 day 
time frame while two suggested a five day period, and a third 
advocated a 20 day period. The Commission also requested comment on 
whether the provision would discourage improper Schedule 13G filings 
by persons seeking to influence control. Four commenters generally 
believed that such a timing requirement would have such an effect; 
two other commenters did not agree, in part because of a concern 
that investor ``raiders'' may initially characterize themselves as 
``passive investors'' and subsequently delay acknowledging their 
control intent.
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    The Commission preliminarily believes that the reproposed cooling-
off period is necessary and appropriate when the beneficial owner 
determines that it now holds the securities with a disqualifying 
purpose or effect and may seek to influence control. The earlier 
commencement of the cooling-off period would encourage the prompt 
filing of a Schedule 13D.33 The cooling-off period would prevent 
further acquisitions or the voting of the subject securities until the 
market and investors have been given time to react to the information 
in the Schedule 13D filing.
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    \33\ The sooner the Schedule 13D filing is made, the sooner the 
cooling-off period will end since the cooling-off period ends 10 
calendar days from the date the Schedule 13D is filed.
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    Comment is again requested on the necessity of the 10 calendar day 
cooling-off period. Is the dissemination of information concerning 
these filings, even for smaller companies, so rapid and widespread in 
the media that such period could be shortened (e.g., to 3 or 5 days)? 
One commenter on the 1989 proposals suggested a longer cooling-off 
period. Should such period be lengthened (e.g., 15 or 20 days)? Comment 
is requested as to the time at which the cooling-off period should 
begin--upon the change in purpose or effect, or upon the filing of the 
Schedule 13D. If the cooling-off period begins upon the change in 
purpose or effect, should it end upon the filing of the Schedule 13D?

D. Twenty-Percent Limit on Ownership Interest Reportable on Schedule 
13G and Related Standstill Period

    As originally proposed, the amendments to Regulation 13D-G would 
have restricted the use of Schedule 13G for all 13G eligible filers 
(other than Exempt Investors) by limiting the aggregate amount of 
securities that an investor could report on that Schedule to less than 
20 percent. An investor would have been required to report on Schedule 
13D within 10 calendar days after reaching the 20 percent threshold. 
The proposed amendments would have subjected the investor to a 
standstill period commencing at the time the threshold was reached and 
continuing until the filing of the Schedule 13D.
    The original proposals reflected the Commission's concern regarding 
the need for prompt disclosure of sizeable blocks of securities because 
of inherent control implications corresponding to such ownership 
positions.34 In this regard, the Commission specifically requested 
comment on the appropriateness of the 20 percent threshold level and 
the appropriateness and length of the standstill period.35

[[Page 36526]]

Most of the commenters strongly opposed subjecting institutional 
investors to the 20 percent threshold and the corresponding standstill 
period. Although recognizing the Commission's concerns regarding the 
need for prompt disclosure of sizeable blocks of securities, these 
commenters questioned the usefulness of an expedited Schedule 13D 
reporting obligation based solely upon reaching the 20 percent 
threshold level. The commenters stressed that the increased disclosure 
requirements of Schedule 13D are unwarranted where securities are 
purchased by otherwise eligible institutions in the ordinary course of 
business and that such a provision would impose too many costs with 
little, if any, benefit to the market.
---------------------------------------------------------------------------

    \34\ As stated in the Proposing Release, the Commission does not 
intend these proposed rules to create a presumption that beneficial 
ownership of 20 percent or more of subject securities indicates 
control or a control purpose.
    \35\ Three commenters favored a threshold limiting the 
availability of Schedule 13G to those filers whose securities 
holdings fall below a certain level and also favored the proposed 
standstill period. All three, however, believed that a 20 percent 
level is too high. One believed that a 10 percent threshold is the 
correct level because of the increasingly important role large 
institutional investors play in contested voting situations. Another 
suggested a 15 percent limit for non-institutional investors because 
of the possibility of abuse by those investors and suggested that 
such a requirement would not impose undue burdens on institutional 
investors.
---------------------------------------------------------------------------

    In particular, one commenter asserted that (1) where sizeable 
blocks are held by institutional investors, such disclosure is already 
fulfilled pursuant to the current requirement that a Schedule 13G 
filing be made within 10 days after the end of the month where either 
an excess of 10 percent ownership or an increase or decrease of more 
than five percent ownership occurs, computed as of the last of the 
month 36 and (2) institutions cross the 20 percent level most 
often because the institutional investor holds convertible stock.
---------------------------------------------------------------------------

    \36\ Rule 13d-1(b)(2) [17 CFR 240.13d-1(b)(2)].
---------------------------------------------------------------------------

    Certain commenters strongly opposed the 20 percent threshold level 
as it would apply to registered broker-dealers. One noted that a 
marketmaker's function is to provide the issuer with an efficient 
pricing mechanism and to provide purchasers and sellers with liquidity 
thereby enabling them to dispose of or acquire securities.
    The Commission is proposing today that the 20 percent limit would 
apply only with respect to Passive Investors reporting on Schedule 13G 
pursuant to new Rule 13d-1(b)(2). Consistent with the current 
regulatory scheme, Qualified Institutional Investors would not be 
subject to the 20 percent limitation. The Commission recognizes that 
institutions that purchase securities in the ordinary course of 
business may be burdened by a limitation on the amount of securities 
that can be reported on the short-form Schedule 13G. Further, the 
Commission preliminarily believes that Schedule 13G strikes an 
appropriate balance between furnishing disclosure to the market and the 
burdens placed on such institutions.
    Upon reaching the 20 percent level, Passive Investors would be 
required to report the acquisition within 10 calendar days on Schedule 
13D, and would be subject to a standstill period during which time such 
investor would not be permitted to vote or direct the voting of the 
securities or acquire an additional beneficial ownership interest in 
any equity securities of the issuer until the investor files the 
Schedule 13D.37 Comment is requested on the appropriateness of 
adopting a 20 percent limit on reporting on Schedule 13G and a 
standstill period with respect to Passive Investors and with respect to 
institutional investors who acquire securities other than in the 
ordinary course of business that remain eligible to file on Schedule 
13G as Passive Investors. Comment is also requested on whether a higher 
or lower threshold should be adopted (e.g., 10 or 15 percent, or 25 or 
30 percent.). Is a cap on ownership reported on Schedule 13G by Passive 
Investors or the proposed standstill period necessary if the Commission 
applies, as proposed, the current Schedule 13D amendment requirements 
to Passive Investors? Would a lower threshold, for example 10 percent, 
be more appropriate in the event the Commission instead decides to 
permit Passive Investors to take advantage of the more liberal Schedule 
13G amendment requirements?
---------------------------------------------------------------------------

    \37\ As proposed, the acquisition that causes the reporting 
person to hold 20 percent or more and therefore triggers the 
Schedule 13D filing obligation, may also trigger an amendment 
requirement for such person's Schedule 13G (e.g., an acquisition of 
one percent or more of the class). The Schedule 13G amendment would 
be required to be filed promptly upon such acquisition and the 
Schedule 13D would be required to be filed within 10 days of the 
acquisition. The reporting person may forego filing the amendment to 
the Schedule 13G if the Schedule 13D is filed promptly.
---------------------------------------------------------------------------

E. Re-establishing Schedule 13G Eligibility

    The Commission is proposing to amend Regulation 13D-G to allow 
persons who have lost their eligibility to file on Schedule 13G to re-
establish their Schedule 13G-eligibility and file on Schedule 
13G.38 Specifically, a Qualified Institutional Investor who has 
lost its Schedule 13G eligibility because it is no longer a qualified 
entity under Rule 13d-1(b)(1)(ii) or cannot certify that it acquired or 
holds the securities in the ordinary course of business and not with 
the purpose or effect of changing or influencing control would be 
allowed to switch back to Schedule 13G pursuant to the Qualified 
Institutional Investor provision 39 once it re-establishes its 
status under Rule 13d-1(b)(1)(ii) or can again make the necessary 
certifications. Similarly, a Passive Investor that has lost its 
Schedule 13G-eligibility under proposed Rule 13d-1(b)(2) because it can 
no longer certify that it does not have a disqualifying purpose or 
effect or because it exceeded the 20 percent threshold, would be able 
to switch back to Schedule 13G when it is once again able to make the 
certification or when its beneficial ownership falls below 20 percent. 
The Commission preliminarily believes that investors and the market 
would be better informed if reporting persons were able to switch back 
to Schedule 13G after re-establishing their eligibility, since the 
filing of a Schedule 13D would be a clearer indicator of an investor 
that currently has a disqualifying purpose or effect or an investor 
that holds 20 percent or more of the class. Comment is requested on 
whether the proposal would provide better information or whether it 
would lead to abuse by filing persons.
---------------------------------------------------------------------------

    \38\ Proposed Rule 13d-1(b)(7).
    \39\ Rule 13d-1(b)(1).
---------------------------------------------------------------------------

F. Expansion of the Class of Qualified Institutional Investors

    As reproposed, the use of the short-form Schedule 13G pursuant to 
the Qualified Institutional Investor provisions of Rule 13d-1(b)(1) 
would continue to be limited essentially to institutions such as 
brokers, dealers, investment companies, and investment advisers 
registered with the Commission, or regulated banks or insurance 
companies. Use of the Schedule 13G by similar non-domestic institutions 
has been limited in the past to those institutions that have obtained 
an exemptive order from the Commission 40 or, under the current 
practice, a no-action position from the Division of Corporation Finance 
based on the requester's undertaking to grant the Commission access to 
information that would otherwise be disclosed in a Schedule 13D and the 
comparability of the foreign regulatory scheme applicable to the 
particular category of institutional investor.
---------------------------------------------------------------------------

    \40\ See Exchange Act Release No. 14692 (April 21, 1978) [43 FR 
18484].
---------------------------------------------------------------------------

    Since the Passive Investor provisions of proposed Rule 13d-1(b)(2) 
would make Schedule 13G available to all investors that do not have a 
disqualifying purpose or effect, including foreign investors, it is 
unclear whether foreign institutions would still seek relief to file on 
Schedule 13G under the Qualified Institutional

[[Page 36527]]

Investor provisions of Rule 13d-1(b)(1). The use of Schedule 13G 
pursuant to the Passive Investor provisions would require the schedule 
to be filed within 10 calendar days of the acquisition as opposed to 
within 45 days after the calendar year in which the institution holds 
more than five percent at year end under the Qualified Institutional 
Investor provision, and could not be used to report beneficial 
ownership of 20 percent or more. Similarly, a prompt amendment 
requirement may make reliance on the Passive Investor provision less 
useful for foreign institutions than the Qualified Institutional 
Investor provision. Comment is requested as to whether the accelerated 
filing and amendment requirement, and the 20 percent limit under 
proposed Rule 13d-1(b)(2) would discourage foreign investors from using 
that provision and cause those foreign institutional investors to 
continue to seek relief to file pursuant to Rule 13d-1(b)(1).
    The Commission continues to believe that a non-U.S. institution 
seeking relief to file pursuant to Rule 13d-1(b)(1) should be subject 
to a regulatory scheme in its country comparable to the U.S. regulatory 
scheme for the particular category of institution and that such 
institutions should undertake to grant the Commission access to 
information that would otherwise be disclosed on Schedule 13D.41 
Accordingly, no change to current practice is proposed. However, 
comment is requested as to whether Rule 13d-1(b)(1) should be amended 
expressly to allow foreign institutional investors that are the 
functional equivalent of the domestic institutions enumerated in Rule 
13d-1(b)(1)(ii) (A)-(G) to file on Schedule 13G pursuant to that 
provision without having to obtain individual relief from the 
Commission. In this regard, should the foreign institution be required 
to certify on the Schedule 13G that it is subject to a regulatory 
scheme comparable to the U.S. for the particular category of 
institution? Additionally, should filing on Schedule 13G under either 
provision only be available to non-U.S. persons who consent on the 
Schedule 13G to furnish the Commission with information, at its 
request, that would otherwise be disclosed in a Schedule 13D?
---------------------------------------------------------------------------

    \41\ Under the Qualified Institutional Investor provision, the 
initial Schedule 13G is filed based upon the amount beneficially 
owned as of the last day of the calendar year unless the beneficial 
ownership exceeded 10 percent of the outstanding securities at any 
time during the year. Consequently, issuers and the market are not 
informed during the year that such an investor holds more than five 
percent of the issuer's securities. The Commission preliminarily 
believes that since the Qualified Institutional Investor provision 
do not require disclosure of such initial acquisitions or the 
existence of such investors until the end of the year, these more 
lenient filing requirements should be limited to regulated 
institutions as enumerated in Rule 13d-1(b)(1)(ii).
---------------------------------------------------------------------------

    Additionally, the Commission is proposing that control persons of 
Qualified Institutional Investors be allowed to report indirect 
beneficial ownership through the controlled entity on Schedule 13G so 
long as the control person does not own directly, or indirectly through 
an ineligible entity or affiliate, more than one percent of the subject 
company's stock and is not seeking to change or influence control of 
the subject company.42 Control persons filing on Schedule 13G 
pursuant to this provision would not be subject to the 20 percent 
limitation as they would if they filed on Schedule 13G pursuant to the 
Passive Investor provision.43 The Commission is also proposing to 
make a conforming change under Section 16 of the Exchange Act.44
---------------------------------------------------------------------------

    \42\ Proposed Rule 13d-1(b)(1)(ii)(G). This proposed amendment 
codifies the no-action position set forth in Warren E. Buffet & 
Berkshire Hathaway, Inc., (available December 5, 1986). Under the 
original proposals, the no-action position would have continued to 
be necessary because of the timing difference (45-day versus 10-day) 
in the filing of the Schedule 13G by eligible institutions and 
individuals. However, the current proposal would allow the 
qualifying control person to file its Schedule 13G within the same 
filing period as the qualifying institution it controls.
    \43\ Proposed Rule 13d-1(b)(2).
    \44\ The Commission proposes to amend Rule 16a-1(a)(1)(vii) to 
include control persons of institutions in the list of persons that 
are not deemed to be beneficial owners of securities held for the 
benefit of third parties or in customer or fiduciary accounts in the 
ordinary course of business as long as the shares are acquired 
without the purpose or effect of changing or influencing control of 
the issuer or engaging in any arrangement subject to Rule 13d-3(b). 
This proposed amendment codifies the interpretive position set forth 
in Edward C. Johnson 3d., (available August 20, 1991).
---------------------------------------------------------------------------

    Finally, under the current requirements, only pension funds that 
are subject to the Employee Retirement Income Security Act of 1974 
(``ERISA'') are eligible to use Schedule 13G.45 The Commission 
limited the category of pension funds eligible to use Schedule 13G to 
pension funds subject to ERISA because such funds are subject to 
uniform regulatory controls.46 The staff has granted no-action 
relief to a state pension fund to use Schedule 13G based upon a showing 
that the fund's fiduciaries were subject to similar regulatory 
standards as those imposed by ERISA.47 The Commission 
preliminarily believes that employee benefit plans maintained primarily 
for the benefit of state or local government employees are now 
generally subject to fiduciary obligations and standards for investment 
that are substantially similar to those imposed by ERISA. Therefore, 
the Commission proposes to amend Rule 13d-1(b)(1)(ii)(F) to allow 
employee benefit plans maintained primarily for the benefit of 
employees of a state or local government or instrumentality to report 
beneficial ownership on Schedule 13G for securities acquired or held in 
the ordinary course of business and not with the purpose or effect of 
influencing the control of the issuer. Comment is requested as to 
whether such proposal is necessary or appropriate. The Commission is 
proposing to revise the current language in Rule 13d-1(b)(1)(ii)(F) to 
clarify that employee benefit plans and pension funds must both be 
subject to ERISA. The language will also be modified to eliminate a 
redundancy. The Commission is proposing to eliminate the phrase 
``pension fund'' because such entities are included in the definition 
of employee benefit plan in Section 3(3) of ERISA. The Commission is 
also proposing to make a conforming change under Section 16 to amend 
Rule 16a-1(a)(1)(vi) to include state and local government employee 
benefit plans in the list of persons that are not deemed to be the 
beneficial owners of securities held for the benefit of third parties. 
Comment is requested on the appropriateness of conforming the list of 
institutional investors in Rule 16a-1(a)(1) (i)-(viii) to reflect the 
changes made to the list of Qualified Institutional Investors in Rule 
13d-1(b)(1)(ii) (A)-(H).
---------------------------------------------------------------------------

    \45\ See Rule 13d-1(b)(1)(ii)(F).
    \46\ See Exchange Act Release No. 14692, Section II(A)(1)(b) 
(April 21, 1978) [43 FR 18484].
    \47\ See State of Wisconsin Investment Board and Wisconsin 
Retirement System, (available December 8, 1992); see also, Ontario 
Teachers' Pension Plan Board, (available May 6, 1992).
---------------------------------------------------------------------------

G. Related and Clarifying Amendments

    The Commission is also proposing amendments to clarify the 
beneficial ownership reporting requirements. Amendments are proposed to 
eliminate the redundancies that currently exist in Regulation 13D-G 
regarding the filing and dissemination requirements by setting forth 
such requirements in one rule, proposed Rule 13d-7(b). Amendments are 
also proposed to revise the dissemination requirements of Schedule 13G. 
Since the Commission believes that a majority of investors will file 
Schedule 13G in lieu of Schedule 13D as a result of the proposed 
amendments to Regulation 13D-G, Schedule 13G will become the primary 
reporting document for beneficial ownership. Therefore, amended Rule 
13d-7(b) would require that the original and amendments to Schedules 
13G be provided to each exchange where the

[[Page 36528]]

security is traded as is currently required for Schedules 13D. Comment 
is requested as to whether it is necessary or appropriate to require 
that copies of Schedules 13G be provided to each exchange since such 
filings are required to be filed electronically on the Commission's 
Electronic Data Gathering and Retrieval System and therefore available 
in the electronic media, such as the Commission's World Wide Web site. 
Additionally, Schedules 13G for exempt acquisitions would continue to 
be sent only to the issuer at its principal executive offices and be 
filed with the Commission. Amendments to Schedule 13G relating to 
exempt acquisitions would no longer be required to be sent to an 
exchange.
    The Commission is also reproposing that a copy of a Schedule 13D, 
Schedule 13G or amendment filed to report ownership of a class of 
securities quoted on the National Association of Securities Dealers 
Automated Quotation System be provided to the National Association of 
Securities Dealers (``NASD'') to parallel the requirements for 
exchange-traded securities.48 Comment is requested as to whether 
it is necessary or appropriate to require that copies of the schedules 
be provided to the NASD.
---------------------------------------------------------------------------

    \48\ Proposed Rule 13d-7(b).
---------------------------------------------------------------------------

    Amendments to Regulation 13D-G are proposed to clarify the number 
of copies required to be filed. Additionally, Rule 13d-7 would be 
revised to clarify that a Schedule 13D filed with respect to holdings 
reported until then on Schedule 13G, and vice versa, does not require 
an additional fee, if beneficial ownership had not fallen below five 
percent.49 Finally, technical amendments to Schedules 13D and 13G 
are being reproposed to conform the schedules to the proposed rules and 
to amend the filing deadlines and the number of copies in the 
instruction.
---------------------------------------------------------------------------

    \49\ The Commission has proposed eliminating the filing fee 
required for Schedules 13D and 13G. See Exchange Act Release No. 
37220 (May 16, 1996) [61 FR 25601]. If such fee is eliminated, Rule 
13d-7 will be revised accordingly.
---------------------------------------------------------------------------

H. Effects of Proposed Amendments to Regulation 13D-G

----------------------------------------------------------------------------------------------------------------
                                          Proposed schedule                                                     
      Issue        Current schedule 13D          13D            Current schedule 13G      Proposed schedule 13G 
----------------------------------------------------------------------------------------------------------------
Person Filing....  Any person acquiring  No change..........  Qualified Institutional   Qualified Institutional 
                    more than 5% of an                         Investors--Eligible       Investors--Expanded to 
                    equity security.                           institutions acquiring    include control persons
                    Rule 13d-1(a).                             more than 5% of an        of qualified           
                                                               equity security. Rule     institutions and state 
                                                               13d-1(b).                 and local employee     
                                                                                         benefit plans.         
                                                              Exempt Investors--        Exempt Investors--No    
                                                               Persons holding more      change.                
                                                               than 5% of an equity                             
                                                               security who are not                             
                                                               subject to, or whose                             
                                                               acquisitions are exempt                          
                                                               from Section 13(d).                              
                                                               Rule 13d-1(c).                                   
                                                                                        Passive Investors--Any  
                                                                                         person holding more    
                                                                                         than 5% but less than  
                                                                                         20% of an equity       
                                                                                         security and did not   
                                                                                         acquire such securities
                                                                                         with a purpose or      
                                                                                         effect of changing or  
                                                                                         influencing control of 
                                                                                         the issuer or in a     
                                                                                         transaction having such
                                                                                         effect. Proposed Rule  
                                                                                         13d-1(b)(2).           
Initial Filing...  Within 10 days after  No change..........  Qualified Institutional   Qualified Institutional 
                    the acquisition.                           Investors--45 days        Investors--No change.  
                    Rule 13d-1(a).                             after calendar year in                           
                                                               which the person                                 
                                                               becomes obligated to                             
                                                               file, Rule 13d-1(b)(1),                          
                                                               or within 10 days after                          
                                                               the end of the first                             
                                                               month in which such                              
                                                               person's beneficial                              
                                                               ownership exceeds 10%                            
                                                               of the class of equity                           
                                                               securities. Rule 13d-                            
                                                               1(b)(2).                                         
                                                              Exempt Investors--45      Exempt Investors--No    
                                                               days after calendar       change. Passive        
                                                               year in which the         Investors--Within 10   
                                                               person becomes            days after the         
                                                               obligated to file. Rule   acquisition. Proposed  
                                                               13d-1(c).                 Rule 13d-1(b)(2).      
Amendment........  Filed promptly to     No change..........  All Filers--45 days                               
                    reflect any                                after the end of the                             
                    material change                            calendar year to report                          
                    including a change                         any change in the                                
                    in investment                              information. Rule 13d-                           
                    intent. An                                 2(b).                                            
                    acquisition or                                                                              
                    disposition of                                                                              
                    beneficial                                                                                  
                    ownership of                                                                                
                    securities equal to                                                                         
                    1% or more of the                                                                           
                    class is deemed a                                                                           
                    material change.                                                                            
                    Rule 13d-2(a).                                                                              

[[Page 36529]]

                                                                                                                
                                                              Qualified Institutional   Qualified Institutional 
                                                               Investors only--In        Investors--No Change.  
                                                               addition to the                                  
                                                               requirement stated                               
                                                               above, within 10 days                            
                                                               after the end of the                             
                                                               first month in which                             
                                                               such person's                                    
                                                               beneficial ownership                             
                                                               exceeds 10% of the                               
                                                               class of equity                                  
                                                               securities, and                                  
                                                               thereafter within 10                             
                                                               days of the end of any                           
                                                               month in which such                              
                                                               person's beneficial                              
                                                               ownership increases or                           
                                                               decreases more than 5%,                          
                                                               computed as of the end                           
                                                               of the month. Rule 13d-                          
                                                               1(b)(2).                                         
                                                                                        Exempt Investors--No    
                                                                                         change.                
                                                                                        Passive Investors--Same 
                                                                                         as requirement for     
                                                                                         persons filing Schedule
                                                                                         13D. Proposed Rule 13d-
                                                                                         2(a).                  
Purpose of         Disclose purpose of   No change..........  Qualified Institutional   Qualified Institutional 
 Acquisition.       the transaction.                           Investors--Requires       Investors--No change   
                    Schedule 13D, Item                         certification that the    except for a technical 
                    4.                                         securities were           change to the          
                                                               acquired in the           certification.         
                                                               ordinary course of                               
                                                               business, were not                               
                                                               acquired for the                                 
                                                               purpose of and not have                          
                                                               the effect of changing                           
                                                               or influencing control                           
                                                               of the issuer, and were                          
                                                               not acquired in a                                
                                                               transaction having such                          
                                                               an effect. Schedule                              
                                                               13G, Item 10. Rule 13d-                          
                                                               1(b).                                            
                                                              Exempt Investors--No      Exempt Investors--No    
                                                               certification required.   change.                
                                                                                        Passive Investors--Same 
                                                                                         certification as       
                                                                                         Qualified Institutional
                                                                                         Investors except that  
                                                                                         acquisitions need not  
                                                                                         occur in the ordinary  
                                                                                         course of business.    
                                                                                         Schedule 13G, proposed 
                                                                                         Item 10(b). Proposed   
                                                                                         Rule 13d-1(b)(2).      
Initial Schedule   Qualified             Qualified                                      Note: Ability to refile 
 13D following      Institutional         Institutional                                  on Schedule 13G once   
 filing on          Investors--Promptly   Investors--No                                  disqualification has   
 Schedule 13G.      , but no later than   change. Proposed                               lapsed clarified.      
                    10 days after such    Rules 13d-1(b)(4)                                                     
                    person ceases to be   and (b)(6).                                                           
                    an eligible                                                                                 
                    institution or                                                                              
                    determines that it                                                                          
                    no longer holds                                                                             
                    such securities in                                                                          
                    the ordinary course                                                                         
                    of business or not                                                                          
                    with the purpose or                                                                         
                    effect of changing                                                                          
                    or influencing the                                                                          
                    control of the                                                                              
                    issuer. Rule 13d-                                                                           
                    1(b)(3).                                                                                    
                   Exempt Investors--    Exempt Investors--                                                     
                    Within 10 days upon   No change.                                                            
                    making an                                                                                   
                    acquisition subject                                                                         
                    to, or not exempt                                                                           
                    from Section 13(d).                                                                         
                                         Passive Investors--                                                    
                                          Within 10 days of:                                                    
                                         (1) acquiring or                                                       
                                          holding the                                                           
                                          securities with                                                       
                                          the purpose or                                                        
                                          effect of changing                                                    
                                          or influencing                                                        
                                          control of the                                                        
                                          issuer or in a                                                        
                                          transaction having                                                    
                                          such effect.                                                          
                                          Proposed Rule 13d-                                                    
                                          1(b)(4), or.                                                          

[[Page 36530]]

                                                                                                                
                                         (2) the person's                                                       
                                          beneficial                                                            
                                          ownership equals                                                      
                                          or exceeds 20% of                                                     
                                          the class of                                                          
                                          equity securities.                                                    
                                          Proposed Rule 13d-                                                    
                                          1(b)(5).                                                              
Cooling-Off        Qualified             Qualified                                                              
 Period.            Institutional         Institutional                                                         
                    Investors--10 day     Investors--From                                                       
                    period after the      the time the                                                          
                    filing of a           person no longer                                                      
                    Schedule 13D          holds the                                                             
                    because the person    securities without                                                    
                    no longer holds       the purpose or                                                        
                    such securities in    effect of changing                                                    
                    the ordinary course   or influencing                                                        
                    of business or not    control of the                                                        
                    with the purpose or   issuer until the                                                      
                    effect of changing    tenth day from the                                                    
                    or influencing the    date the Schedule                                                     
                    control of the        13D is filed.                                                         
                    issuer. Rule 13d-     Proposed Rule 13d-                                                    
                    1(b)(3).              1(b) (4)(ii).                                                         
                                         Passive Investors--                                                    
                                          Same as Qualified                                                     
                                          Institutional                                                         
                                          Investors.                                                            
                                          Proposed Rule 13d-                                                    
                                          1(b) (4)(ii).                                                         
Standstill Period                        Passive Investors--                                                    
                                          From the time the                                                     
                                          person's                                                              
                                          beneficial                                                            
                                          ownership equals                                                      
                                          or exceeds 20% of                                                     
                                          the class of                                                          
                                          equity securities                                                     
                                          until the filing                                                      
                                          of the Schedule                                                       
                                          13D. Proposed Rule                                                    
                                          13d-1(b)(5).                                                          
----------------------------------------------------------------------------------------------------------------



III. Initial Regulatory Flexibility Analysis

    An Initial Regulatory Flexibility Analysis has been prepared in 
accordance with 5 U.S.C. 603 concerning the proposed amendments to the 
beneficial ownership rules and related Schedules 13D and 13G and the 
proposed amendments to Rules 16a-1(a)(1)(vi) and (vii). The analysis 
notes that the principal effect of the revisions to Regulation 13D-G 
will be to reduce the disclosure obligations and associated costs to a 
majority of persons, including small entities, required to report 
beneficial ownership under Sections 13(d) and 13(g) of the Exchange Act 
and would eliminate the reporting obligations under Section 16 of the 
Exchange Act of certain state and local government employee benefit 
plans and certain control persons of Qualified Institutional Investors. 
The analysis also indicates that there are no current federal rules 
that duplicate, overlap or conflict with the rules and forms to be 
amended.
    As stated in the analysis, alternatives to the proposed amendments 
were considered, including, among other things, changing or simplifying 
the compliance or reporting requirements for small entities or 
exempting small entities from all requirements to file the schedules 
under Regulation 13D-G. As discussed in the analysis, there is no less 
restrictive alternative to the proposed rule amendments that would 
serve the purposes of the beneficial ownership provisions of the 
Exchange Act.
    Written comments are encouraged with respect to any aspect of the 
analysis. Such comments will be considered in the preparation of the 
Final Regulatory Flexibility Analysis if the proposed revisions are 
adopted. A copy of the Initial Regulatory Flexibility Analysis may be 
obtained by contacting Dennis O. Garris in the Office of Mergers and 
Acquisitions, Division of Corporation Finance, Securities and Exchange 
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.

IV. Paperwork Reduction Act

    Certain provisions of Regulation 13D-G contain ``collection of 
information'' requirements within the meaning of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501 et seq.), and the Commission has 
submitted proposed revisions to Regulation 13D-G to the Office of 
Management and Budget (``OMB'') for review in accordance with 44 U.S.C. 
3507(d) and 5 C.F.R. Sec. 1320.11. The titles for the collections of 
information are ``Schedule 13D'' and ``Schedule 13G''.
    The beneficial ownership reporting requirements are intended to 
provide investors and the subject issuer with information about 
accumulations of securities that may have the ability to change or 
influence control of the issuer. Regulation 13D-G currently requires 
that most persons file a detailed disclosure statement on Schedule 13D 
upon acquiring more than five percent of the subject securities. 
Certain qualified institutions (Qualified Institutional Investors) and 
persons who

[[Page 36531]]

have not made an acquisition subject to Section 13(d) (Exempt 
Investors) may file the short-form disclosure statement Schedule 13G 
which requires less detailed disclosure than Schedule 13D.50
---------------------------------------------------------------------------

    \50\ See fn. 13 supra for a comparison of the primary 
differences between the disclosure required by Schedules 13D and 
13G.
---------------------------------------------------------------------------

    The Commission anticipates that the proposal to make Schedule 13G 
available, in lieu of Schedule 13D, to all Passive Investors 
beneficially owning less than 20 percent would reduce the existing 
information collection requirements associated with Regulation 13D-G 
and Schedules 13D and 13G. The proposed amendments will allow more 
individuals and non-institutional investors to file the short-form 
Schedule 13G. It is estimated that 803 Schedules 13D would be filed 
each year if the proposals were adopted.51 Each Schedule 13D would 
impose an estimated burden of 14.75 hours for a total annual burden of 
11,844.25 hours.52 It is estimated that 9,065 Schedules 13G would 
be filed each year if the proposals were adopted.53 Each Schedule 
13G would impose an estimated burden of 10 hours for a total annual 
burden of 90,650 hours.
---------------------------------------------------------------------------

    \51\ This estimated number of respondents is based upon the 
number of Schedules 13D filed in fiscal year 1995 and assumes no 
increase each year. This represents an estimated 76 percent 
reduction from the 3,347 Schedules 13D filed in fiscal year 1995. 
The estimated 76 percent reduction in Schedule 13D filings is based 
upon the sample data provided by the Office of Economic Analysis.
    \52\ Total annual burden hours are determined by multiplying the 
estimated average burden hours for completing the particular 
schedule by the estimated number of respondents that file that 
schedule.
    \53\ This number of respondents is based upon the number of 
Schedules 13G filed in fiscal year 1995 (6,521) plus the additional 
2,544 respondents that are expected to file on Schedule 13G under 
the proposed rules and assumes no increase each year.
---------------------------------------------------------------------------

    Providing the information required by Schedules 13D and 13G is 
mandatory under Sections 13(d) and 13(g) and Regulation 13D-G of the 
Exchange Act. The information will not be kept confidential. Unless a 
currently valid OMB control number is displayed on the Schedules 13D 
and 13G, the Commission may not sponsor or conduct or require response 
to an information collection.
    Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits 
comments to: (i) evaluate whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (ii) evaluate the accuracy of the Commission's estimate of the 
burden of the proposed collection of information; (iii) enhance the 
quality, utility, and clarity of the information to be collected; and, 
(iv) minimize the burden of collection of information on those who are 
to respond, including through the use of automated collection 
techniques or other forms of information technology.
    Persons desiring to submit comments on the collection of 
information requirements should direct the comments to the Office of 
Management and Budget, Attention: Desk Officer for the Securities and 
Exchange Commission, Office of Information and Regulatory Affairs, 
Washington, D.C. 20503, and should send a copy to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., 
Washington, D.C. 20549, with reference to File No. S7-16-96. The Office 
of Management and Budget is required to make a decision concerning the 
collection of information between 30 and 60 days after publication of 
this release. Consequently, a comment to OMB is best assured of having 
its full effect if OMB receives it within 30 days of publication.

V. Cost-Benefit Analysis

    No specific data was provided in response to the Commission's 
original request regarding the costs and benefits associated with 
amending the filing requirements under Regulation 13D-G.54 It 
appears that making Schedule 13G available to all Passive Investors 
holding less than 20 percent of subject securities should significantly 
reduce the reporting costs incurred by those investors. Regulation 13D-
G applies to any person that acquires more than five percent of a class 
of equity securities. Although it is difficult to determine reasonably 
the number of small entities and the costs to small entities of 
complying with the proposed amendments, the Commission believes that 
the proposed amendments would not result in a substantial economic 
impact to a significant number of small entities but rather should 
result in a substantial savings to entities (both small and large) that 
qualify to file Schedule 13G in lieu of Schedule 13D. The proposed 
amendments would decrease the disclosure obligations of a significant 
number of persons currently required to file the long-form Schedule 
13D. Based upon data provided by the Commission's Office of Economic 
Analysis, 76 percent of Schedules 13D studied by that office did not 
disclose a purpose or effect for changing or influencing control of the 
issuer and, therefore, would benefit from the amendments proposed 
today.55
---------------------------------------------------------------------------

    \54\ However, eight commenters expressed general views as to the 
costs and benefits associated with the amendments, without 
attempting to quantify either the costs or benefits. Five commenters 
stated that the proposed amendments would reduce passive filers' 
reporting burdens and associated costs. Seven commenters expressed 
concern that the proposed 20 percent limitation upon the 
availability of Schedule 13G to passive institutional investors 
would impose increased compliance burdens and costs without 
providing any useful information to the public. Finally, three 
commenters believed that requiring Schedule 13G filers to provide 
each exchange upon which the security is traded a copy of the 
Schedule would be overly burdensome because such information is not 
readily available.
    \55\ See Section I.B. supra.
---------------------------------------------------------------------------

    In response to comments in connection with the potential increased 
costs that institutional investors could incur if subject to the 20 
percent threshold level, the Commission is not reproposing the 
amendment with respect to Qualified Institutional Investors.
    The Commission again requests commenters to provide views and data 
as to the costs and benefits associated with amending the filing 
requirements for beneficial ownership statements.

VI. Request for Comment

    Any interested persons wishing to submit written comments on the 
proposals, to suggest additional changes, or to submit comments on 
other matters that might have an impact on the proposals, are requested 
to do so. In addition to the specific inquiries made throughout this 
release, the Commission solicits comments on the usefulness of the 
proposed revisions to the Regulation 13D-G reporting scheme and the 
conforming changes under Section 16 to reporting persons, registrants, 
and the marketplace at large.
    The Commission also requests comment on whether the proposed rules, 
if adopted, would have an adverse effect on competition or would impose 
a burden on competition that is neither necessary nor appropriate in 
furthering the purposes of the Exchange Act. Comments on this inquiry 
will be considered by the Commission in complying with its 
responsibilities under Section 23(a)(2) of the Exchange Act.56
---------------------------------------------------------------------------

    \56\ 15 U.S.C. 78w(a)(2).
---------------------------------------------------------------------------

    The Commission also encourages the submission of written comments 
with respect to any aspect of the initial regulatory flexibility 
analysis. Such written comments will be considered in the preparation 
of the final regulatory flexibility analysis if the proposed rules are 
adopted.
    Persons wishing to submit written comments should file three copies 
thereof with Jonathan G. Katz, Secretary,

[[Page 36532]]

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: [email protected]. Comment letters should 
refer to File No. S7-16-96; this file number should be included on the 
subject line if e-mail is used. All comments received will be available 
for public inspection and copying in the Commission's public reference 
room at the same address. Electronically submitted comments will be 
posted on the Commission's Internet web site (http://www.sec.gov).

VII. Statutory Basis and Text of Amendments

    The amendments to Rules 13d-1, 13d-2 and 13d-7 and Schedules 13D 
and 13G and Rule 16a-1 are being proposed pursuant to the authority set 
forth in Sections 3(b), 13, 16 and 23 of the Securities Exchange Act of 
1934.

Lists of Subjects in 17 CFR Part 240

    Reporting and recordkeeping requirements, Securities.

Text of Proposed Amendments

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

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

    1. 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.
* * * * *
    2. By amending Sec. 240.13d-1 to revise paragraph (a), the 
introductory text of paragraph (b)(1), paragraphs (b)(1)(ii)(F) and 
(G), and paragraphs (b)(2), (b)(3), (b)(4), and (c) and to add 
paragraphs (b)(5), (b)(6) and (b)(7) to read as follows:


Sec. 240.13d-1  Filing of Schedules 13D and 13G.

    (a) Any person who, after acquiring directly or indirectly the 
beneficial ownership of any equity security of a class which is 
specified in paragraph (d) of this section, is directly or indirectly 
the beneficial owner of more than five percent of such class shall, 
within 10 days after such acquisition, file with the Commission, a 
statement containing the information required by Schedule 13D 
(Sec. 240.13d-101).
    (b)(1) A person who would otherwise be obligated under paragraph 
(a) of this section to file a statement on Schedule 13D (Sec. 240.13d-
101) may, in lieu thereof, file with the Commission, within 45 days 
after the end of the calendar year in which such person became so 
obligated, a short-form statement on Schedule 13G (Sec. 240.13d-102): 
Provided, That it shall not be necessary to file a Schedule 13G unless 
the percentage of the class of equity security specified in paragraph 
(d) of this section beneficially owned as of the end of the calendar 
year is more than five percent: And provided further, That:
* * * * *
    (ii) * * *
    (F) An employee benefit plan as defined in Section 3(3) of the 
Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. 
1001 et seq. (``ERISA'') which is subject to the provisions of ERISA, 
or any such plan that is not subject to ERISA that is maintained 
primarily for the benefit of the employees of a state or local 
government or instrumentality, or an endowment fund;
    (G) A parent holding company or control person, provided the 
aggregate amount held directly by the parent or control person, and 
directly and indirectly by their subsidiaries or affiliates that are 
not persons specified in Sec. 240.13d-1(b)(1)(ii) (A) through (F), does 
not exceed one percent of the securities of the subject class;
* * * * *
    (2) A person who would otherwise be obligated under paragraph (a) 
of this section to file a statement on Schedule 13D (Sec. 240.13d-101) 
may, in lieu thereof, file with the Commission, within 10 days after an 
acquisition described in paragraph (a) of this section, a short-form 
statement on Schedule 13G (Sec. 240.13d-102): Provided, That such 
person:
    (i) Has not acquired such securities with any purpose, or with the 
effect of, changing or influencing the control of the issuer, or in 
connection with or as a participant in any transaction having such 
purpose or effect, including any transaction subject to Sec. 240.13d-
3(b);
    (ii) Is not a person reporting pursuant to paragraph (b)(1) of this 
section; and
    (iii) Is not directly or indirectly the beneficial owner of 20 
percent or more of such class.
    (3) Any person relying on Sec. 240.13d-1(b)(1) or Sec. 240.13d-2(b) 
shall, in addition to filing any statements thereunder, file a 
statement on Schedule 13G (Sec. 240.13d-101), or amendment thereto, 
within 10 days after the end of the first month in which such person's 
direct or indirect beneficial ownership exceeds 10 percent of a class 
of equity securities specified in Sec. 240.13d-1(d), computed as of the 
last day of the month, and thereafter within 10 days after the end of 
any month in which such person's beneficial ownership of securities of 
such class, computed as of the last day of the month, increases or 
decreases by more than five percent of such class of equity securities. 
Once an amendment has been filed reflecting beneficial ownership of 
five percent or less of the class of securities, no additional filings 
are required by this paragraph (b)(3) unless the person thereafter 
becomes the beneficial owner of more than 10 percent of the class, 
computed as of the last day of the month.
    (4)(i) Notwithstanding paragraphs (b)(1), (b)(2) and (b)(3) of this 
section and Sec. 240.13d-2(b), a person that has reported that it is 
the beneficial owner of more than five percent of a class of equity 
securities in a statement on Schedule 13G (Sec. 240.13d-102) pursuant 
to paragraph (b)(1), (b)(2) or (b)(3) of this section, or is required 
to report such acquisition but has not yet filed the schedule, shall 
immediately become subject to Secs. 240.13d-1(a) and 240.13d-2(a) and 
shall file a statement on Schedule 13D (Sec. 240.13d-101) within 10 
days if, and shall remain subject to such requirements for so long as, 
such person:
    (A) Has acquired or holds such securities with a purpose or effect 
of changing or influencing control of the issuer, or in connection with 
or as a participant in any transaction having such purpose or effect, 
including any transaction subject to Sec. 240.13d-3(b); and
    (B) Is at that time the beneficial owner of more than five percent 
of a class of equity securities described in Sec. 240.13d-1(d).
    (ii) From the time such person has acquired or holds such 
securities with a purpose or effect of changing or influencing control 
of the issuer, or in connection with or as a participant in any 
transaction having such purpose or effect until the expiration of the 
tenth day from the date of the filing of a Schedule 13D (Sec. 240.13d-
101) pursuant to this section, such person shall not:
    (A) Vote or direct the voting of the securities described therein; 
or
    (B) Acquire an additional beneficial ownership interest in any 
equity securities of the issuer of such securities, nor of any person 
controlling such issuer.
    (5) Notwithstanding paragraph (b)(2) of this section and 
Sec. 240.13d-2(b),

[[Page 36533]]

persons reporting on Schedule 13G (Sec. 240.13d-102) pursuant to 
paragraph (b)(2) of this section shall immediately become subject to 
Secs. 240.13d-1(a) and 240.13d-2(a) and shall remain subject to such 
requirements for so long as, and shall file a statement on Schedule 13D 
(Sec. 240.13d-101) within 10 days of the date on which, such person's 
beneficial ownership equals or exceeds 20 percent of the class of 
equity securities. Until the filing of a statement on Schedule 13D 
pursuant to this paragraph, such person shall not:
    (i) Vote or direct the voting of the securities described therein, 
or
    (ii) Acquire an additional beneficial ownership interest in any 
equity securities of the issuer of such securities, nor of any person 
controlling such issuer.
    (6)(i) Any person who has reported an acquisition of securities in 
a statement on Schedule 13G (Sec. 240.13d-102) pursuant to paragraph 
(b)(1) or (b)(3) of this section and thereafter ceases to be a person 
specified in paragraph (b)(1)(ii) of this section shall immediately 
become subject to Sec. 240.13d-1(a) or Sec. 240.13d-1(b)(2) (if such 
person satisfies the requirements specified in Sec. 240.13d-1(b)(2)), 
and Secs. 240.13d-2 (a) or (b) and shall remain subject to such 
requirements for so long as, and shall file, within 10 days thereafter, 
a statement on Schedule 13D (Sec. 240.13d-101) or amendment to Schedule 
13G, as applicable, if such person is a beneficial owner at that time 
of more than five percent of the class of equity securities.
    (ii) Any person that has reported beneficial ownership on Schedule 
13G (Sec. 240.13d-102) pursuant to Sec. 240.13d-1(b)(1) shall file an 
amendment on Schedule 13G within 10 days of the date that such person 
determines that it no longer has acquired or holds such securities in 
the ordinary course of business, Provided That such person may continue 
to file on Schedule 13G pursuant to Sec. 240.13d-1(b)(2).
    (7) Any person who has filed a Schedule 13D (Sec. 240.13d-101) 
pursuant to paragraph (b)(4), (b)(5) or (b)(6) of this section may 
again report its beneficial ownership on Schedule 13G (Sec. 240.13d-
102) pursuant to paragraphs (b)(1), (b)(2) or (b)(3) of this section 
provided such person qualifies thereunder, as applicable, by filing a 
Schedule 13G (Sec. 240.13d-102) once the person determines that the 
provisions of paragraph (b)(4), (b)(5) or (b)(6) of this section no 
longer apply.
    (c) Any person who is or becomes directly or indirectly the 
beneficial owner of more than five percent of any equity security of a 
class specified in paragraph (d) of this section and who is not 
required to file a statement under paragraph (a) of this section by 
virtue of the exemption provided by Section 13(d)(6) (A) or (B) of the 
Act (15 U.S.C. 78m(d)(6)(A) or 78m(d)(6)(B)), or because such 
beneficial ownership was acquired prior to December 22, 1970, or 
because such person otherwise (except for the exemption provided by 
Section 13(d)(6)(C) of the Act (15 U.S.C. 78m(d)(6)(C))) is not 
required to file such a statement, shall file with the Commission, 
within 45 days after the end of the calendar year in which such person 
became obligated to report under this paragraph (c), a statement 
containing the information required by Schedule 13G (Sec. 240.13d-102).
* * * * *
    3. By amending Sec. 240.13d-2 by revising paragraphs (a), (b), and 
the note following paragraph (c) to read as follows:


Sec. 240.13d-2  Filing of amendments to Schedules 13D or 13G.

    (a) If any material change occurs in the facts set forth in the 
Schedule 13D (Sec. 240.13d-101) required by Sec. 240.13d-1(a) or the 
Schedule 13G (Sec. 240.13d-102) filed pursuant to Sec. 240.13d-1(b)(2), 
including, but not limited to, any material increase or decrease in the 
percentage of the class beneficially owned, the person or persons who 
were required to file such statement shall promptly file or cause to be 
filed with the Commission an amendment disclosing such change. An 
acquisition or disposition of beneficial ownership of securities in an 
amount equal to one percent or more of the class of securities shall be 
deemed ``material'' for purposes of this section; acquisitions or 
dispositions of less than such amounts may be material, depending upon 
the facts and circumstances.
    (b) Notwithstanding paragraph (a) of this section, and provided 
that the person filing a Schedule 13G (Sec. 240.13d-102) pursuant to 
Sec. 240.13d-1(b)(1) continues to meet the requirements set forth 
therein, any person who has filed a Schedule 13G pursuant to 
Sec. 240.13d-1(b)(1) or Sec. 240.13d-1(c) shall amend such statement 
within forty-five days after the end of each calendar year if, as of 
the end of such calendar year, there are any changes in the information 
reported in the previous filing on that Schedule; Provided, however, 
That such amendment need not be filed with respect to a change in the 
percent of class outstanding previously reported if such change results 
solely from a change in the aggregate number of securities outstanding. 
Once an amendment has been filed reflecting beneficial ownership of 
five percent or less of the class of securities, no additional filings 
are required unless the person thereafter becomes the beneficial owner 
of more than five percent of the class and is required to file pursuant 
to Sec. 240.13d-1.
    (c) * * *

    Note to Sec. 240.13d-2: For persons filing a short-form 
statement pursuant to Rule 13d-1(b) (1) or (2), see also Rules 13d-
1(b) (3), (4), (5), and (6).

    4. By amending Sec. 240.13d-7 by revising the section heading, 
designating the current text as paragraph (a), revising the last 
sentence of newly designated paragraph (a) and adding paragraph (b) to 
read as follows:


Sec. 240.13d-7  Fees for filing Schedules 13D or 13G; Number of Copies; 
Dissemination.

    (a) * * * No fees shall be required with respect to the filing of 
any amended Schedule 13D (Sec. 240.13d-101) or amended Schedule 13G 
(Sec. 240.13d-102), and no fees shall be required with respect to an 
initial Schedule 13D or initial Schedule 13G if the filing person 
previously has filed a Schedule 13D or Schedule 13G reporting 
beneficial ownership of more than five percent of such class of equity 
securities and has not subsequently filed an amendment reporting 
beneficial ownership of five percent or less of such class; Provided, 
however, That once an amendment has been filed reflecting beneficial 
ownership of five percent or less of such class, an additional fee of 
$100 shall be paid with the next filing of that person that reflects 
ownership of more than five percent.
    (b) Schedules filed with the Commission pursuant to Secs. 240.13d-1 
and 240.13d-2 in paper format shall include a signed original and five 
copies of the schedule, including all exhibits. One copy of the 
Schedule filed pursuant to Secs. 240.13d-1 and 240.13d-2 shall be sent 
to the issuer of the security at its principal executive office, by 
registered or certified mail, and (except with respect to persons 
filing pursuant to Sec. 240.13d-1(c)) to each national securities 
exchange or the securities association that operates the automated 
inter-dealer quotation system where the security is traded or 
authorized to be quoted.
    5. By amending Sec. 240.13d-101 by revising the language preceding 
the first box on the cover page, and revising the note on the cover 
page to read as follows:

[[Page 36534]]

Sec. 240.13d-101  Schedule 13D--Information to be included in 
statements filed pursuant to Sec. 240.13d-1(a) and amendments thereto 
filed pursuant to Sec. 240.13d-2(a).

* * * * *
    If the filing person has previously filed a statement on Schedule 
13G to report the acquisition that is the subject of this Schedule 13D, 
and is filing this schedule because of Secs. 240.13d-1(b)(4), 240.13d-
1(b)(5) or 240.13d-1(b)(6), check the following box.

* * * * *
    Note: Schedules filed in paper format shall include a signed 
original and five copies of the schedule, including all exhibits. 
See Sec. 240.13d-7(b) for other parties to whom copies are to be 
sent.
* * * * *
    6. By amending Sec. 240.13d-102 by revising the section heading, 
adding a line for the date of the reportable event following the line 
for CUSIP Number, revising Instruction A, revising Items 3, 4, and 10, 
and revising the note at the end of the schedule, to read as follows:


Sec. 240.13d-102  Schedule 13G--Information to be included in 
statements filed pursuant to Sec. 240.13d-1 (b) and (c) and amendments 
thereto filed pursuant to Sec. 240.13d-1(b)(3) or Sec. 240.13d-2.

* * * * *
(Date of Event Which Requires Filing of this Statement)
* * * * *
    Instructions. A. Statements filed pursuant to Sec. 240.13d-1(b)(1) 
containing the information required by this schedule shall be filed not 
later than February 14 following the calendar year in which the person 
became obligated to report or within the time specified in 
Sec. 240.13d-1(b)(3), if applicable. Statements filed pursuant to 
Sec. 240.13d-1(b)(2) shall be filed not later than 10 days after the 
event requiring the filing.
* * * * *
    Item 3. If this statement is filed pursuant to Secs. 240.13d-
1(b)(1) or 240.13d-2(b), check whether the person filing is a:
    (a) [  ] Broker or dealer registered under section 15 of the Act.
    (b) [  ] Bank as defined in section 3(a)(6) of the Act.
    (c) [  ] Insurance company as defined in section 3(a)(19) of the 
Act.
    (d) [  ] Investment company registered under section 8 of the 
Investment Company Act of 1940.
    (e) [  ] Investment adviser registered under section 203 of the 
Investment Advisers Act of 1940.
    (f) [  ] Employee benefit plan as defined in Section 3(3) of the 
Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. 
1001 et seq. (``ERISA'') which is subject to the provisions of ERISA, 
or any such plan that is not subject to ERISA that is maintained 
primarily for the benefit of the employees of a state or local 
government or instrumentality, or an endowment fund.
    (g) [  ] Parent holding company or control person, in accordance 
with Sec. 240.13d-1(b)(1)(ii)(G).
    If this statement is filed pursuant to Sec. 240.13d-1(b)(2), check 
this box. ______
    Item 4. Ownership.
    Provide the following information regarding the aggregate number 
and percentage of the class of securities of the issuer identified in 
Item 1.
    (a) Amount beneficially owned: ____________.
    (b) Percent of class: ____________.
    (c) Number of shares as to which such person has:
    (i) Sole power to vote or to direct the vote ____________.
    (ii) Shared power to vote or to direct the vote ____________.
    (iii) Sole power to dispose or to direct the disposition of 
____________.
    (iv) Shared power to dispose or to direct the disposition of 
____________.
    Instruction. For computations regarding securities which represent 
a right to acquire an underlying security see Sec. 240.13d-3(d)(1).
* * * * *
    Item 10. Certification.
    (a) The following certification shall be included if the statement 
is filed pursuant to Sec. 240.13d-1(b)(1):
    By signing below I certify that, to the best of my knowledge and 
belief, the securities referred to above were acquired and held in the 
ordinary course of business and were not acquired or held for the 
purpose of and do not have the effect of changing or influencing the 
control of the issuer of such securities and were not acquired or held 
in connection with or as a participant in any transaction having such 
purpose or effect.
    (b) The following certification shall be included if the statement 
is filed pursuant to Sec. 240.13d-1(b)(2):
    By signing below I certify that, to the best of my knowledge and 
belief, the securities referred to above were not acquired or held for 
the purpose of and do not have the effect of changing or influencing 
the control of the issuer of such securities and were not acquired or 
held in connection with or as a participant in any transaction having 
such purpose or effect.
* * * * *
    Note: Schedules filed in paper format shall include a signed 
original and five copies of the schedule, including all exhibits. 
See Sec. 240.13d-7(b) for other parties for whom copies are to be 
sent.
* * * * *
    2. By amending Sec. 240.16a-1 to revise paragraphs (a)(1)(vi) and 
(vii) to read as follows:


Sec. 240.16a-1  Definition of terms.

* * * * *
    (a) * * *
    (1) * * *
    (vi) An employee benefit plan as defined in Section 3(3) of the 
Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. 
1001 et seq. (``Employee Retirement Income Security Act'') which is 
subject to the provisions of the Employee Retirement Income Security 
Act, or any such plan that is not subject to the Employee Retirement 
Income Security Act that is maintained primarily for the benefit of the 
employees of a state or local government or instrumentality, or an 
endowment fund;
    (vii) A parent holding company or control person, provided the 
aggregate amount held directly by the parent or control person, and 
directly and indirectly by its subsidiaries or affiliates that are not 
persons specified in Sec. 240.16a-1(a)(1) (i) through (vi), does not 
exceed one percent of the subject class; and
* * * * *
    Dated: July 3, 1996.

    By the Commission.
Jonathan G. Katz,
Secretary.
[FR Doc. 96-17579 Filed 7-10-96; 8:45 am]
BILLING CODE 8010-01-P