[Federal Register Volume 67, Number 78 (Tuesday, April 23, 2002)]
[Proposed Rules]
[Pages 19896-19912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-9454]



[[Page 19895]]

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Part V





Securities and Exchange Commission





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17 CFR Parts 229, 240 and 249



Acceleration of Periodic Report Filing Dates and Disclosure Concerning 
Website Access to Reports; Proposed Rule

  Federal Register / Vol. 67, No. 78 / Tuesday, April 23, 2002 / 
Proposed Rules  

[[Page 19896]]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 229, 240 and 249

[Release No. 33-8089; 34-45741; File No. S7-08-02]
RIN 3235-AI33


Acceleration of Periodic Report Filing Dates and Disclosure 
Concerning Website Access to Reports

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rules.

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SUMMARY: We are proposing to accelerate the filing of quarterly reports 
and annual reports under the Securities Exchange Act of 1934 by 
domestic reporting companies that have a public float of at least $75 
million, that have been subject to the Exchange Act reporting 
requirements for at least 12 calendar months, and that previously have 
filed at least one annual report. We propose to shorten the filing 
deadlines for these companies from 45 to 30 calendar days after period 
end for quarterly reports and from 90 to 60 calendar days after fiscal 
year end for annual reports. We also are proposing to require companies 
subject to the accelerated filing deadlines to disclose in their annual 
reports where investors can obtain access to company filings, including 
whether the company provides access to its reports on Forms 10-K, 10-Q 
and 8-K on its Internet website, free of charge, as soon as reasonably 
practicable, and in any event on the same day as, those reports are 
electronically filed with or furnished to the Commission.

DATES: Comments should be received on or before May 23, 2002.

ADDRESSES: Comments should be submitted in triplicate to Jonathan G. 
Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, 
NW, Washington, DC 20549. Comments also may be submitted electronically 
at the following electronic mail address: [email protected]. All 
comment letters should refer to File No. S7-08-02. This file number 
should be included in the subject line if electronic mail is used. 
Comment letters will be available for public inspection and copying in 
the Commission's Public Reference Room, 450 Fifth Street, NW, 
Washington, DC 20549. Electronically submitted comment letters will be 
posted on the Commission's Internet website (http://www.sec.gov).\1\
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    \1\ We do not edit personal identifying information, such as 
names or electronic mail addresses, from electronic submissions. You 
should submit only information that you wish to make available 
publicly.

FOR FURTHER INFORMATION CONTACT: Jeffrey J. Minton, Special Counsel, or 
Elizabeth M. Murphy, Chief, Office of Rulemaking, at (202) 942-2910, 
Division of Corporation Finance, U.S. Securities and Exchange 
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Commission, 450 Fifth Street, NW, Washington, DC 20549-0312.

SUPPLEMENTARY INFORMATION: We are proposing amendments to Item 101 \2\ 
of Regulation S-K \3\ under the Securities Act of 1933 (``Securities 
Act''),\4\ Forms 10-Q \5\ and 10-K \6\ under the Securities Exchange 
Act of 1934 (``Exchange Act'') \7\ and Exchange Act Rules 12b-2,\8\ 
13a-10 \9\ and 15d-10.\10\
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    \2\ 17 CFR 229.101.
    \3\ 17 CFR 229.10 et seq.
    \4\ 15 U.S.C. 77a et seq.
    \5\ 17 CFR 249.308a.
    \6\ 17 CFR 249.310.
    \7\ 15 U.S.C. 78a et seq.
    \8\ 17 CFR 240.12b-2.
    \9\ 17 CFR 240.13a-10.
    \10\ 17 CFR 240.15d-10.
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I. Introduction

    The U.S. system of federal securities regulation is based on full 
and fair disclosure. Congress, in enacting the federal securities laws, 
embraced full disclosure as the best way to permit the financial 
markets to allocate capital. For this system to function most 
effectively, the markets must have access to information that is clear, 
accurate, and timely.
    The Exchange Act requires companies to make information publicly 
available to investors on an ongoing basis to aid in their investment 
and voting decisions.\11\ Moreover, seasoned issuers (that is, those 
that have been subject to the reporting requirements for a certain 
period of time) incorporate information from their Exchange Act reports 
into their registration statements under the Securities Act. Investors 
purchasing securities in public offerings therefore also rely on 
Exchange Act disclosure.
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    \11\ The following types of companies are subject to the 
obligation to provide information to the secondary markets through 
reports filed with the Commission:
    A company that has registered a class of equity or debt 
securities under Section 12(b) of the Exchange Act [15 U.S.C. 
78l(b)] so that the securities can be listed and traded on a 
national securities exchange;
    A company that has registered a class of equity securities under 
Section 12(g)(1) of the Exchange Act [15 U.S.C. 78l(g)(1)] and 
Exchange Act Rule 12g-1 [17 CFR 240.12g-1] because it had total 
assets of more than $10 million and the class of equity securities 
is held by more than 500 record holders as of the last day of the 
company's fiscal year (and cannot rely on an exemption from such 
registration);
    A company that has voluntarily registered a class of equity 
securities under Section 12(g) of the Exchange Act;
    Under Section 15(d) of the Exchange Act [15 U.S.C. 78o(d)], a 
company that filed registration statement under the Securities Act 
that became effective and has not met the thresholds for suspension 
of the reporting requirement; and
    Under Exchange Act Rules 12g-3 and 15d-5 [17 CFR 240.12g-3 and 
240.15d-5], a company that has succeeded to the obligation of 
another reporting company.
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    Generally, the rules adopted by the Commission under the Exchange 
Act require disclosure at quarterly and annual intervals, with 
specified significant events reported on a more current basis.\12\ 
Specifically, domestic issuers subject to the Exchange Act must, among 
other obligations, file the following reports:\13\
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    \12\ See, for example, Exchange Act Rules 13a-1, 13a-11, 13a-13, 
15d-1, 15d-11 and 15d-13 [17 CFR 240.13a-1, 13a-11, 13a-13, 15d-1, 
15d-11 and 15d-13].
    \13\ Reporting companies that are foreign private issuers, as 
defined in Exchange Act Rule 3b-4(c) [17 CFR 240.3b-4(c)], are 
subject to different requirements for periodic reports. They are not 
required to file quarterly reports. They file annual reports on Form 
20-F [17 CFR 249.220f]. Instead of current reporting on Form 8-K, 
foreign issuers provide reports on Form 6-K [17 CFR 249.306]. 
Certain Canadian issuers may file different reports under the 
Multijurisdictional Disclosure System. Foreign government issuers, 
as defined in Exchange Act Rule 3b-4(c), also are subject to 
different reporting requirements. They file annual reports on Form 
18-K [17 CFR 249.318]. Foreign private issuers may elect to file the 
forms used by domestic reporting companies and then are subject to 
the same deadlines.
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     Annual reports on Form 10-K (or Form 10-KSB in the case of 
small business issuers \14\);\15\
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    \14\ The term ``small business issuer'' is defined in Exchange 
Act Rule 12b-2 as a U.S. or Canadian issuer with less than $25 
million in revenues and public float that is not an investment 
company.
    \15\ Form 10-K (and Form 10-KSB [17 CFR 249.310b]) provides a 
comprehensive overview of the reporting company on an annual basis. 
The form consists of four parts (Form 10-KSB has three parts, but 
the categories of required information are similar). Part I requires 
disclosure regarding the company's business, its properties, legal 
proceedings, and matters submitted to a security holder vote. Part 
II requires disclosure regarding the market for the company's common 
equity, sales of unregistered securities, the use of proceeds from 
recent sales of securities, specified financial statements and 
information, management's discussion and analysis of financial 
condition and results of operations, and quantitative and 
qualitative disclosure about market risk. Part III requires 
disclosure regarding the company's directors and executive officers, 
executive compensation, security ownership and certain 
relationships, and related party transactions. Part IV requires 
disclosure of exhibits, financial statement schedules, and a list of 
current reports filed on Form 8-K.
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     Quarterly reports on Form 10-Q (or Form 10-QSB in the case 
of small business issuers) for the first three quarters of its fiscal 
year;\16\ and
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    \16\ Form 10-Q (and Form 10-QSB [17 CFR 249.308b]) consists of 
two parts. Part I requires disclosure of specified financial 
statements, management's discussion and analysis of financial 
condition and results of operations, and quantitative and 
qualitative disclosure about market risk. Part II requires 
disclosure regarding legal proceedings, changes in securities, sales 
of unregistered securities, the use of proceeds from recent sales of 
securities, defaults on senior securities, exhibits, and a list of 
current reports filed on Form 8-K.

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[[Page 19897]]

     Current reports on Form 8-K for a number of specified 
events.\17\
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    \17\ 17 CFR 249.308. These events currently include change in 
control of the registrant, the acquisition or disposition of a 
significant amount of assets, the bankruptcy or receivership of the 
registrant, changes in the registrant's certifying accountant, the 
resignation of a member of the registrant's board of directors, and 
any other event that the registrant deems of significance to 
security holders.
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    A domestic reporting company must file a quarterly report no later 
than 45 calendar days after the end of each of its first three fiscal 
quarters, and an annual report no later than 90 calendar days after the 
end of its fiscal year. In addition, a company may be required to file 
transition reports on Form 10-K or 10-KSB or Form 10-Q or 10-QSB when 
it changes its fiscal year.\18\
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    \18\ See Exchange Act Rules 13a-10 and 15d-10.
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    Over 30 years have passed since we last changed these deadlines. In 
the interim, advances in communications and information technology have 
made it easier for companies to process and disseminate information 
swiftly. Many large seasoned reporting companies capture and evaluate 
information and announce their quarterly and annual financial results 
well before they file their formal reports with the Commission. These 
earnings announcements are generally less complete in their disclosure 
than quarterly or annual reports and can emphasize information that is 
less prominent in quarterly or annual reports.\19\ Investors also 
process, evaluate and react to information on a much shorter timeframe. 
The delayed filing of reports, however, means investors often make 
decisions without access to the more extensive disclosure in the 
company's Exchange Act reports.
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    \19\ See Release No. 33-8039 (Dec. 4, 2001) [66 FR 63731].
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    Investors also need ready access to corporate information to make 
their investment and voting decisions. An effective and economical 
method for companies to make information available about themselves is 
through their Internet websites. We therefore strongly encourage 
companies to provide investors with website access to their Exchange 
Act reports. We believe company disclosure should be more readily 
available to investors on a timely basis in a variety of locations to 
facilitate investor access to that information. We believe it is 
important for companies to make investors aware of the different 
sources that provide access to company information.
    As a step in modernizing the periodic reporting system and 
improving the usefulness of quarterly and annual reports to investors, 
we are proposing to shorten the filing due dates for these reports for 
many companies. We also are proposing to require a company subject to 
these accelerated filing deadlines to disclose in its annual report on 
Form 10-K where investors can obtain timely access to company filings, 
including whether the company provides access to its reports on Forms 
10-K, 10-Q and 8-K on its Internet website, free of charge, as soon as 
reasonably practicable, and in any event on the same day as, these 
reports are electronically filed with or furnished to the 
Commission.\20\ If the company does not provide website access in this 
manner, it also must disclose why it does not do so and where else 
investors can access these filings electronically immediately upon 
filing. The company also would be required to disclose its website 
address, if it has one.
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    \20\ Even if a company chooses not to make its reports available 
on its website, investors still would be able to access information 
about the company through our EDGAR system. A company's posting of 
its reports on its website would not be a substitute for filing 
documents with the Commission.
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II. Proposed Changes

A. Acceleration of Quarterly and Annual Report Due Dates

1. Reasons for Proposal
    While the specific disclosure required in quarterly reports and 
annual reports has evolved over the past 30 years, and the integrated 
disclosure system has placed added emphasis on Exchange Act reporting, 
the basic structure and timeframes that were established in 1970 remain 
in place today. Since that time, annual reports for domestic companies 
have been due 90 calendar days after a reporting company's fiscal year 
end.\21\ Transition reports filed on Form 10-K or 10-KSB also have a 
90-day deadline. Since 1946, quarterly periodic reports have been due 
within 45 calendar days after the end of a quarter, although from 1955 
to 1970, companies filed semi-annual reports instead of quarterly 
reports.\22\ Transition reports filed on Form 10-Q or 10-QSB also have 
a 45-day deadline.
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    \21\ See General Instruction A of Forms 10-K and 10-KSB and 
Release No. 34-9000 (Oct. 21, 1970) [35 FR 16919]. Before 1970, the 
due date for filing annual reports was 120 days after a company's 
fiscal year end.
    \22\ See General Instruction A.1 of Forms 10-Q and 10-QSB; 
Release No. 34-3803 (Mar. 28, 1946) [11 FR 10988]; and Release No. 
34-9004 (Oct. 28, 1970) [35 FR 17537].
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    The ``Report of the Advisory Committee on Corporate Disclosure to 
the Securities and Exchange Commission'' in 1977 led to the 
establishment of the current integrated disclosure system.\23\ The 
system involves significant reliance on Exchange Act reports to satisfy 
the disclosure requirements for registration statements filed under the 
Securities Act. The Advisory Committee did not recommend changing, and 
the Commission did not change, the periodic report filing dates when it 
established the integrated disclosure system.
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    \23\ See Report of the Advisory Committee on Corporate 
Disclosure to the Securities and Exchange Commission (Nov. 3, 1977).
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    We believe that periodic reports contain valuable information for 
investors. Commentators have long remarked, however, that because the 
due dates for periodic reports are so lengthy, the information included 
in the reports often is stale by the time the reports are filed.\24\ 
While quarterly and annual reports at present generally reflect 
historical information, it is important that a lengthy delay before 
that information becomes available does not make the information less 
valuable to investors. Significant technological advances over the last 
three decades have both increased the market's demand for more timely 
corporate disclosure and the ability of companies to capture, process 
and disseminate this information.\25\ Computers, sophisticated 
financial software, electronic mail, teleconferencing, 
videoconferencing and other technologies available today have replaced 
the paper and pencil, typewriter, adding machines, carbon paper, mail 
system, travel and face-to-face meetings relied on in 1970.
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    \24\ As far back as 1969, former SEC Chairman Manuel Cohen said: 
``because companies need not file the [quarterly] report until 45 
days after the end of the quarter, the information is often stale.'' 
See J. Robert Brown, Corporate Communications and the Federal 
Securities Laws, 53 Geo. Wash. L. Rev. 741 (1985).
    \25\ See, for example, Report to the Congress: The Impact of 
Recent Technological Advances on the Securities Markets, (Sept. 
1997). That report, like all Commission reports issued after 1996, 
is available on our Internet website (http://www.sec.gov).
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    In our 1998 release proposing reform of the Securities Act 
registration process,\26\ we noted that hundreds of public companies 
issue press releases to announce quarterly and annual results

[[Page 19898]]

well before they file their reports with us.\27\ While these press 
releases do not contain all of the information included in quarterly 
and annual reports, it appears that companies and their auditors have 
developed efficiencies over the years that allow them to generate 
financial data quickly.\28\ Companies are responsible for the 
information in these announcements. We understand as a general matter 
that the audit work is essentially completed and other steps have been 
taken to ensure their accuracy.
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    \26\ See Release No. 33-7606A (Nov. 13, 1998). In that release, 
we solicited comment on whether we should shorten the due dates of 
annual and quarterly reports. Comments received on that release are 
available through our Public Reference Room under File No. S7-30-98.
    \27\ Our Office of Economic Analysis has determined that, over 
the past 10 years, registrants on average issued their year-end 
earnings announcements approximately 43 days after fiscal year end. 
In addition, registrants on average issued their quarterly earnings 
announcements approximately 27 days after period end.
    \28\ See, for example, Tad Leahy, ``The Reality of Real-Time 
reporting,'' Business Finance, March 2000, at 93.
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    These earnings announcements also reflect the importance of the 
financial information and investors' demand for it at the earliest 
possible time. While we applaud companies' practices of issuing press 
releases to keep investors promptly informed of important corporate 
developments, the amount of information and the manner of its 
presentation in press releases varies from company to company. 
Investors often must wait for the periodic reports to receive financial 
statements and the accompanying notes prepared in accordance with 
generally accepted accounting principles, management's discussion and 
analysis, and other vitally important financial disclosures. Shortening 
the due date of quarterly and annual reports would provide more timely 
disclosure to investors and the market.
    In establishing the appropriate timeframes for filing periodic 
reports, however, we must balance the market's need for information 
with the time companies need to prepare that information without undue 
burden. We recognize that it may be necessary for a new public company 
to develop experience with the preparation and filing of periodic 
reports. Similarly, smaller issuers may not have the resources or 
infrastructure to prepare their reports on a shorter timeframe without 
undue burden or expense.
    In our 1998 release, we requested comment as to whether we should 
shorten the due dates for quarterly and annual reports.\29\ We received 
a significant number of comments in response to that request. Several 
commenters supported or did not object to the acceleration of quarterly 
and annual report due dates, with some arguing that accelerated due 
dates are necessary in today's fast-paced marketplaces to ensure the 
efficient allocation of capital and the timely flow of information to 
the market.\30\
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    \29\ See note 26 above.
    \30\ See, for example, the Letters in File No. S7-30-98 of 
American Federation of Labor and Congress of Industrial 
Organizations (``AFL-CIO''); Association of Investment Management 
and Research; Michael J. Connell; Council of Institutional Investors 
(``CII''); Ford Motor Company; Ford Motor Credit Company; 
Institutional Shareholder Services (``ISS''); Investment Company 
Institute (``ICI''); North American Securities Administrators 
Association, Inc. (``NASAA''); Pennsylvania Securities Commission; 
Service Employees International Union Master Trust (``SEIU''); and 
Teachers Insurance and Annuity Association-College Retirement 
Equities Fund (``TIAA-CREF'').
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    A larger number of commenters, however, thought that a shortening 
of due dates would be overly burdensome,\31\ particularly for small 
companies.\32\ Several of the commenters that argued against shortening 
deadlines also were concerned that the benefits derived from 
technological advances over the past 30 years have been offset by 
additional and more complex reporting requirements. They were concerned 
that accelerated due dates would result in less accurate filings.\33\
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    \31\ See, for example, the Letters in File No. S7-30-98 of 
American Bar Association (``ABA''); American Corporate Counsel 
Association (``ACCA''); Agway, Inc.; Association of the Bar of the 
City of New York (``NYCBA''); Association of Publicly Traded 
Companies; Baldwin & Lyons, Inc.; BostonFed Bancorp, Inc.; Business 
Roundtable; Cabot Corporation; Charles Schwab & Co., Inc.; Chevron 
Corporation; Citigroup Inc.; Cleary, Gottlieb, Steen & Hamilton 
(``Cleary''); Diamond Home Services, Inc.; Duke Energy Corporation; 
Emerson Electric Co.; Financial Executives Institute (``FEI''); 
Financial Institutions Accounting Committee (``FIAC''); FirstEnergy 
Corp.; Fried, Frank, Harris, Shriver & Jacobson (``Fried Frank''); 
General Motors Corporation (``GM''); Goldman, Sachs & Co.; Grubb & 
Ellis Company; Home Federal Savings; Jacobs Engineering Group Inc. 
(``Jacobs''); John Hancock Mutual Life Insurance Company; J.P. 
Morgan & Co.; KPMG LLP; Mellon Bank Corporation; National 
Association of Real Estate Investment Trusts (``NAREIT''); New York 
State Society of Certified Public Accountants (``NYSSCPA''); PennFed 
Financial Services, Inc.; PPG Industries, Inc.; 
PricewaterhouseCoopers LLP; R.R. Donnelley & Sons Company 
(``Donnelley''); Schering-Plough Corporation; Southern Company; 
Sullivan & Cromwell (``S&C''); Toyota Motor Credit Corporation; USX 
Corporation; and Wells Fargo & Company.
    \32\ See, for example, the Letters in File No. S7-30-98 of CCF 
Holding Company; The CIT Group, Inc.; Equality Bancorp, Inc.; Ernst 
& Young LLP; First National Bank of West Chester; First Northern 
Capital Corp.; FirstBank Northwest; Frankfort First Bancorp, Inc.; 
Green Street Financial Corp.; Home Building Bancorp, Inc.; Malizia, 
Spidi, Sloane & Fisch, P.C. (``Malizia''); New York State Bar 
Association; Provident Bancorp; Security of Pennsylvania Financial 
Corp.; Seven Silicon Valley law firms and Prof. Joseph A. Grundfest; 
Tri-County Bancorp, Inc.; Weinbaum & Yalamanchi; Wells Financial 
Corp.; Westerfed Financial Corp.; West Essex Bank; and WVS Financial 
Corporation.
    \33\ See, for example, the Letters in File No. S7-30-98 of 
Agway, Inc.; Business Roundtable; Chevron Corporation; Citigroup 
Inc.; Cleary; FEI; FIAC; FirstEnergy Corp.; GM; Jacobs; Malizia; 
Mellon Bank Corporation; NAREIT; NYSSCPA; PPG Industries, Inc.; S&C 
and Toyota Motor Credit Corporation.
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    Some of the commenters who objected to an acceleration of filing 
deadlines and several other commenters offered alternative suggestions 
that might help mitigate the impact of such a change if the Commission 
was committed to an acceleration proposal. One suggestion was a more 
gradual acceleration of due dates, where large or seasoned issuers 
would be the first group subject to shortened filing dates or the 
filing deadline would be shortened in incremental steps (for example, 
initially to 40 days for quarterly reports and 75 days for annual 
reports).\34\ Another commenter suggested that companies should file 
their reports by the earlier of the current due dates or a specified 
date after the company's first release of earnings.\35\ Some commenters 
requested that we propose changes in a separate release specifically 
addressing filing deadlines, which we are doing today.\36\
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    \34\ See, for example, the Letters in File No. S7-30-98 of the 
ABA, ACCA; American Institute of Certified Public Accountants; 
Baldwin & Lyons, Inc.; Michael J. Connell; Ernst & Young LLP; Fried 
Frank; Shering-Plough Corporation; Southern Company; and Weinbaum & 
Yalamanchi.
    \35\ See the ABA Letter in File No. S7-30-98.
    \36\ See the Michael J. Connell and Donnelley Letters in File 
No. S7-30-98.
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    On February 13, 2002, we announced our intention to propose 
shortened filing deadlines as part of a series of initial steps to 
modernize and improve the corporate disclosure system.\37\ We recently 
hosted roundtable discussions in New York, Washington, DC, and Chicago 
at which investor relations professionals, corporate executives, 
academics, and experienced legal counsel discussed financial disclosure 
and auditor oversight.\38\ Several of the participants at these 
roundtables

[[Page 19899]]

indicated that reporting within the proposed shortened deadlines was 
feasible.\39\ Some participants, however, referred to the comment 
letters on our 1998 Securities Act reform proposals,\40\ and were 
concerned about the ability of companies, and smaller companies in 
particular, to report in a shorter timeframe.\41\ They thought that 
accelerating deadlines could cause the quality of reports to 
diminish.\42\ One participant was concerned that shortened deadlines 
may present more problems for quarterly reports than for annual 
reports.\43\
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    \37\ In our Press Release No. 2002-22 (Feb. 13, 2002), we stated 
that in addition to the proposed amendments discussed in this 
release, we intend to propose rules to (1) expand the list of 
significant events requiring disclosure on Form 8-K; (2) require 
disclosure on a current basis of certain transactions involving 
securities of a company entered into with any of its executive 
officers and directors; and (3) require disclosure regarding 
critical accounting policies. In a companion release being issued 
today, we propose to amend Form 8-K to require disclosure on a 
current basis of certain transactions involving securities of a 
company entered into with any of its executive officers and 
directors. See Release No. 34-45742 (Apr. 12, 2002).
    \38\ See SEC Press Release Nos. 2002-28 (Feb. 22, 2002) and 
2002-46 (Mar. 27, 2002). The New York roundtable was held on March 
4, 2002. The Washington DC roundtable was held on March 6, 2002. The 
Chicago roundtable was held on April 4, 2002. Archived broadcasts of 
the roundtables are available to the public on our Internet website 
at www.sec.gov.
    \39\ See, for example, Richard Carbone and Raymond Groves, 
Remarks at the Financial Disclosure and Auditor Oversight Roundtable 
in Washington, DC (Mar. 6, 2002) (archived broadcast available at 
www.sec.gov).
    \40\ See, for example, John White, Remarks at the Financial 
Disclosure and Auditor Oversight Roundtable in New York, NY (Mar. 4, 
2002) (archived broadcast available at www.sec.gov); and James 
Cheek, Remarks at the Financial Disclosure and Auditor Oversight 
Roundtable in Washington, DC (Mar. 6, 2002) (archived broadcast 
available at www.sec.gov).
    \41\ See, for example, Edward Nusbaum, Remarks at the Financial 
Disclosure and Auditor Oversight Roundtable in Chicago, IL (Apr. 4, 
2002) (archived broadcast available at www.sec.gov).
    \42\ See note 40 above.
    \43\ See, for example, Phil Livingston, Remarks at the Financial 
Disclosure and Auditor Oversight Roundtable in Washington, DC (Mar. 
6, 2002) (archived broadcast available at www.sec.gov).
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2. Description of Proposal
    After evaluating the discussions at the roundtables, the comments 
from our 1998 release, and technological and other market developments 
since the 1998 release, we propose to accelerate the due dates of 
quarterly and annual reports only for companies:
     With a public float \44\ of $75 million or more as of a 
date within no more than 60 and no less than 30 days before the end of 
the company's last fiscal year; \45\
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    \44\ Public float is the aggregate market value of a company's 
outstanding voting and non-voting common equity (i.e., market 
capitalization) minus the value of common equity held by affiliates 
of the company. Public float is also one of the key determinants for 
eligibility for short-form registration under the Securities Act 
(Form S-3 [17 CFR 239.13] and Form F-3 [17 CFR 239.33]).
    \45\ The company could select any date within this period to 
establish whether it met the public float requirement for purposes 
of establishing the due date for that year's Form 10-K and the 
subsequent year's Form 10-Q reports.
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     That have been subject to the reporting requirements of 
Section 13(a) \46\ or 15(d) of the Exchange Act for a period of at 
least 12 calendar months preceding the filing of the report; and
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    \46\ 15 U.S.C. 78m(a).
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     That have filed at least one annual report pursuant to 
Section 13(a) or 15(d) of the Exchange Act.
    For a company meeting these requirements, which we define as an 
``accelerated filer,'' we propose to shorten the due date for annual 
reports on Form 10-K to 60 calendar days after the company's fiscal 
year end. We propose to shorten the due date for quarterly reports on 
Form 10-Q to 30 calendar days after the end of each of the first three 
quarters of the company's fiscal year. We propose similar changes to 
the transition reports that an accelerated filer must make when it 
changes its fiscal year. Specifically, we propose to accelerate the due 
date of transition reports to 60 calendar days for transition reports 
filed on Form 10-K and 30 calendar days for transition reports filed on 
Form 10-Q.\47\
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    \47\ If our proposals are adopted, we would make appropriate 
conforming updates to the Codification of Financial Reporting 
Policies.
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    Although our proposed changes would not eliminate entirely the 
information gap between a company's announcement of earnings and the 
filing of more extensive information in its periodic reports, they 
would lessen the gap. We seek to minimize this gap while still giving 
companies enough time to prepare their reports. We are aware that it 
takes companies time to prepare and verify the more extensive 
disclosures that must be included in the reports, and we appreciate the 
importance of allowing sufficient preparation time to ensure accurate 
presentation of results, as well as to permit the mandated audit or 
review of financial information by independent auditors and 
consideration by audit committees and boards of directors. We 
acknowledge that, while the deadlines for filing quarterly and annual 
reports have not changed in over 30 years, the disclosure requirements 
have changed and some companies, particularly those with widespread 
operations, face additional complexities in today's environment. 
However, for the reasons discussed above, we anticipate that these 
changes have not outweighed fully the ability of companies to report in 
shorter timeframes, particularly with respect to companies that would 
meet our proposed public float and reporting history requirements. We 
believe that these companies may be able to disclose information within 
the shortened timeframes without sacrificing accuracy or completeness, 
although we request comment on these preliminary beliefs. Accordingly, 
we propose a 30 day period for quarterly reports and a 60 day period 
for annual reports. A 30 and 60 day period also represents common and 
easily measurable periods for investors and companies to calculate 
filing deadlines. We propose conforming deadlines for transition 
reports so that they remain similar to the deadlines for periodic 
reports.\48\
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    \48\ See, for example, Release No. 33-6823 (Mar. 13, 1989) [54 
FR 10306] (Revising transition report rules to conform their filing 
requirements to those for periodic reports).
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Questions Regarding Accelerating Filing Due Dates

     To what extent would shortening the due dates for 
quarterly, annual and transition reports improve the flow of 
information to investors and the markets?
     Should the proposed filing periods be longer or shorter 
than proposed? What factors should we consider in making these filing 
periods longer or shorter?
     Should we only accelerate the annual report due date, or 
only the quarterly report due date?
     Should we require companies to file their reports by the 
earlier of the existing deadlines or some earlier time after their 
first release of earnings information for that period? What timeframe 
would be appropriate? For example, would a 15 or 30 day period after 
the earnings announcement provide enough time for a company to finalize 
the corresponding periodic report? Would such a requirement delay 
earnings announcements?
     Are there ways other than our proposal to get important 
information out to investors sooner? Would our proposals cause a delay 
in the release of earnings announcements? Should we only require that 
certain information, such as the audited or reviewed financial 
statements and management's discussion and analysis, be filed on an 
accelerated basis?
     Do the proposed Form 10-Q and 10-K due dates provide 
affected companies with enough time to prepare their reports? Do 
affected companies anticipate any significant problems in complying 
with the accelerated deadlines?\49\ If so, what types of problems?
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    \49\ Shortly after we announced our intention to propose changes 
to corporate disclosure, the National Investor Relations Institute 
(``NIRI'') conducted a survey of its corporate members to assess 
initial reactions to these changes. See ``NIRI Releases Survey 
Results on SEC Proposed Changes to Corporate Disclosure,'' Executive 
Alert (National Investor Relations Institute, Vienna, VA), Mar. 20, 
2002. Based on 406 responses, an 11% response rate, 40% of the 
respondents stated they would not anticipate any significant 
problems filing their annual reports within 60 days after the end of 
the fiscal year, and 46% stated they would not anticipate any 
significant problems filing their quarterly reports within 30 days 
after the end of each fiscal quarter.
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     Would the proposal impose any significant costs on these 
companies? If so, what type and amount of costs? Are these short-term 
or one-time costs to

[[Page 19900]]

adjust a company's reporting procedures, or long-term, ongoing costs?
     Would auditors, audit committees and boards of directors 
have sufficient time to perform their review functions?
     It is our understanding that a company's audit (or review 
in the case of interim financial statements) is complete or 
substantially complete by the time the company issues its earnings 
announcement. Is our understanding accurate? How often do these 
earnings numbers change between their announcement and the filing of 
the corresponding periodic report? What steps are involved, and how 
much time does it take, to prepare the necessary disclosures for the 
corresponding periodic report after the earnings announcement or the 
completion of the audit (or review)?
     Would the reliability and accuracy of the reports suffer 
as a result of shortened due dates?
     As part of our proposal, we also propose to make a 
conforming change to the date by which all schedules required by 
Article 12 \50\ of Regulation S-X \51\ may be filed as an amendment to 
the annual report. We propose to change this date from 120 calendar 
days to 90 calendar days for accelerated filers to maintain a 30 day 
period after the due date of the report to file the amendment. Should 
we make this conforming change?
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    \50\ 17 CFR 210.12-01 et seq.
    \51\ 17 CFR 210.1-01 et seq.
---------------------------------------------------------------------------

     We do not propose to make a conforming change to the 120-
day period companies have to file their definitive proxy or information 
statements involving the election of directors to allow the 
incorporation by reference of the information required by Part III of 
Form 10-K.\52\ We request comment on whether not changing the 120-day 
proxy and information statement filing deadline would cause 
difficulties for companies or decrease the benefits of the proposals to 
investors because of the delay before receipt of the incorporated 
information. Should this period also be shortened by 30 days?
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    \52\ See General Instruction I.G(3) of Form 10-K.
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     We also are strongly considering making conforming 
revisions to accelerate the timeliness requirements in Regulation S-X 
(for example, Rules 3-01, 3-05 and 3-12 of Regulation S-X) \53\ for the 
inclusion of financial statements by accelerated filers in other 
Commission filings, such as Securities Act registration statements, 
registration statements under Section 12 of the Exchange Act and proxy 
and information statements under Section 14 of the Exchange Act.\54\ We 
preliminarily believe there would be no countervailing reasons why we 
should not make these conforming changes, and note that if we do not 
make these changes, there would be inconsistencies between these 
requirements and the periodic report filing requirements. Should we 
make these conforming revisions? Should we also make similar revisions 
to the financial statement filing requirements in Item 7 of Form 8-K 
(i.e., reducing the filing deadlines by one-third from 60 to 40 days)? 
What ramifications might there be if we make these conforming changes, 
or if we do not make these changes? Should there be other exceptions or 
changes made for certain categories of issuers or types of filings? 
Should changes only be made for accelerated filers that would meet the 
conditions in Rule 3-01(c) of Regulation S-X? Should we provide a 
transition period for any such changes?
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    \53\ 17 CFR 210.3-01, 3-05 and 3-12.
    \54\ 15 U.S.C. 78n.
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3. ``Accelerated Filer'' Definition
    The public float and reporting history requirements that we propose 
to use to identify the companies that would be subject to accelerated 
filing are intended to include the companies that are least likely to 
find such a change overly burdensome. We are not proposing to change 
the due dates for annual, quarterly or transition reports for other 
companies, including small business issuers that file on Forms 10-KSB 
and 10-QSB, at this time.\55\ Those companies will remain subject to 
the existing filing deadlines. The proposed public float and reporting 
history requirements are based on the current eligibility requirements 
for registration of primary offerings for cash on Form S-3.\56\ As 
these companies can take advantage of short-form registration, 
including the resultant benefits of incorporation by reference and 
quick access to the capital markets through ``shelf registration,'' 
\57\ a shortening of the deadlines for these companies seems 
appropriate. In identifying companies that would be subject to this new 
requirement, we thought it would be appropriate to use a pre-existing 
threshold to reduce regulatory complexity.
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    \55\ The definition of ``small business issuer'' excludes 
issuers with a public float of $25 million or more. As a result, all 
small business issuers are effectively excluded from our proposal.
    \56\ See General Instructions I.A.3 and I.B.1 of Form S-3.
    \57\ ``Shelf registration'' is the commonly used term for 
delayed offerings under Securities Act Rule 415 [17 CFR 230.415]. 
Rule 415 permits offerings to be delayed until some point determined 
by the registrant after effectiveness of the relevant registration 
statement.
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    If a company was not already an accelerated filer, a company would 
determine its public float for purposes of determining whether it will 
become an accelerated filer as of a date no more than 60 and no less 
than 30 days before the end of its fiscal year. Hence, a company that 
meets the float requirement on this determination date would be subject 
to shortened deadlines for that year's Form 10-K and the reports on 
Form 10-Q filed in the company's next fiscal year, if it also meets the 
reporting history requirements on the date the reports are due. If a 
company meets the public float requirement on the determination date 
but does not yet meet the reporting history requirements, it would not 
become an accelerated filer until it does meet the reporting 
requirements, which could occur at any time during the next fiscal 
year.
    Once a company became an accelerated filer, it would remain an 
accelerated filer subject to shortened deadlines unless it became 
eligible to use Forms 10-KSB and 10-QSB for its annual and quarterly 
reports.\58\ In that case, the issuer would no longer be an accelerated 
filer unless it subsequently became ineligible to use Forms 10-KSB and 
10-QSB and once again met the public float and reporting history 
requirements.
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    \58\ See Item 10(a)(2) of Regulation S-K [17 CFR 228.10(a)(2)] 
for the conditions for entering and exiting the small business 
reporting system. A reporting company that is not a small business 
issuer must meet the definition of a small business issuer at the 
end of two consecutive fiscal years before it will be considered a 
small business issuer for purposes of Form 10-KSB and Form 10-QSB.
---------------------------------------------------------------------------

    For example, if in December, 2002, a company with a December 31st 
fiscal year end determines that it meets the public float requirement 
but has not filed its first annual report, its annual report for fiscal 
year 2002, due in 2003, would be subject to a 90 day deadline. However, 
once it filed its 2002 annual report, and assuming by that time it had 
also been subject to the Exchange Act reporting requirements for 12 
months, the company would now be subject to accelerated deadlines for 
subsequent Form 10-Q reports filed during the 2003 fiscal year and all 
annual and quarterly reports filed thereafter. If, in subsequent years, 
the company's public float fell to the point that it became eligible to 
use Forms 10-KSB and 10-QSB for its annual and quarterly reports, it 
would no longer be an accelerated filer subject to accelerated 
deadlines. If the company subsequently became ineligible to use Forms 
10-KSB and 10-QSB and once

[[Page 19901]]

again met the public float and reporting history conditions, it would 
again become an accelerated filer subject to accelerated deadlines.
    Currently, companies are required to disclose on the cover page of 
their annual reports on Form 10-K the company's public float as of a 
specified date within 60 days before filing. To assist the Commission 
and investors in evaluating whether a company is subject to accelerated 
deadlines, we propose to revise this requirement. For a company that 
was not previously an accelerated filer, we would require disclosure of 
the public float computed as of a date no more than 60 and no less than 
30 days before the last day of the company's most recently completed 
fiscal year to determine whether the company was an accelerated filer, 
and the date used for purposes of that computation. If a company was 
previously an accelerated filer, we would require disclosure of the 
public float as of a specified date no more than 60 and no less than 30 
days before the last day of the company's most recently completed 
fiscal year.

Questions Regarding Our Proposed Definition of Accelerated Filer

     Would the proposed public float and reporting history 
requirements exclude the companies that are the least able to comply 
with shortened deadlines?
     Would different filing deadlines for different companies 
confuse companies and/or investors?
     Should all reporting companies be subject to shortened 
filing deadlines? \59\ Is the exclusion of small issuers appropriate? 
Is the need for timely information about these issuers greater than the 
additional burden or expense these issuers might incur from shortened 
deadlines? Should all reporting companies be subject to the shortened 
filing deadlines, except for companies eligible to file under our small 
business reporting system? Are there additional or alternate factors we 
should consider?
---------------------------------------------------------------------------

    \59\ In our 1998 release, we solicited comment on accelerating 
deadlines for all reporting companies. See note 26 above.
---------------------------------------------------------------------------

     Should non-accelerated filers be subject to deadlines 
shorter than the current deadlines, but not as short as those proposed 
for accelerated filers (e.g., 75 days for annual reports and 40 days 
for quarterly reports)?
     Would our proposed changes affect some companies or 
industries more than others (such as those with complex transactions or 
accounting or those that regularly access the debt markets instead of 
equity markets, and therefore may not have a public float)? Should we 
make exceptions to the proposed due dates for certain companies or 
industries? If so, which ones and why?
     Currently, foreign private issuers must file their annual 
reports on Form 20-F within six months after the end of their fiscal 
years.\60\ We are not proposing today to change that interval,\61\ 
although we are continuing to consider this issue and Exchange Act 
filing requirements generally for foreign issuers. If today's proposal 
is adopted, the discrepancy between the filing deadlines for larger 
seasoned U.S. issuers and those for foreign private issuers will 
increase. The speed with which foreign issuers can capture and analyze 
information has also probably improved since the six-month interval was 
established. Foreign issuers are subject to similar obligations as to 
the information to be reported. There are some categories of 
information, for example executive compensation, where requirements for 
foreign issuers are less onerous. Foreign issuers that do not prepare 
their financial statements in accordance with U.S. GAAP, however, must 
go through the additional step of preparing a reconciliation of their 
financial statements to U.S. GAAP. In light of the requirements of Form 
20-F and the situation of foreign private issuers, should the deadline 
for annual reports on Form 20-F be shortened? If so, should it be 
shortened to five months or four months after the end of the company's 
fiscal year? To some other period? What would be the impact of such a 
change?
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    \60\ In addition, foreign private issuers that undertake 
registered offerings under the Securities Act are effectively 
subject to a three-month reporting deadline for their audited annual 
financial statements. See Item 8.A.4 of Form 20-F.
    \61\ In our 1998 release, we proposed to shorten the interval to 
five months. See note 26 above.
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     Should the public float requirement be higher or lower 
than that currently proposed? If higher, how would that level be 
consistent with the level currently required for short-form 
registration on Form S-3 (or should that level also be raised)? If a 
different level is appropriate, what levels should be considered, and 
why?
     Is the method for determining the measurement date for the 
public float test clear? Is the delineation of which reports would be 
subject to accelerated deadlines appropriate? Should the determination 
of which reports would be subject to accelerated deadlines be made at a 
point other than a date no more than 60 and no less than 30 days before 
the last date of the issuer's fiscal year?
     While we have proposed to use the public float test, we 
are seriously considering alternative thresholds and request comment on 
such alternatives. For example, should all reporting companies be 
subject to shortened filing deadlines, except for companies below a 
certain revenue or asset threshold (for example, $5 million)? Should we 
accelerate the filing dates only for companies whose equity securities 
are listed or actively traded on an exchange or Nasdaq? How would we 
define ``actively traded?'' Are there other alternatives that will 
balance the need for timely, high quality disclosure with the ability 
of companies to prepare the disclosure without undue burden?
     Should the reporting history requirement be shorter or 
longer than proposed? Is a history of preparing reports relevant to the 
ability of a company to report on an accelerated timeframe? Is less or 
more experience needed than that proposed?
     We are proposing the requirement that a company file at 
least one annual report to provide reasonable opportunity for a company 
to gain enough filing experience before it is subject to shortened 
deadlines. Is such experience relevant to prepare information in a 
shorter timeframe?
     Is the proposed method for entering and exiting 
accelerated filing status that relies on the small business issuer 
reporting system clear? Is it appropriate? In the alternative, should 
there be some other mechanism for companies to enter and exit 
accelerated filer status? For example, should a company be permitted to 
exit accelerated filer status if its public float has fallen below some 
specified threshold (i.e., $25 million or $50 million) and has remained 
below that threshold for some specified period of time? Should a 
threshold other than public float be considered? What factors should be 
considered in formulating such an alternative?
     Should we require a company to provide notice that it is 
entering or exiting accelerated filer status? Should such a notice be 
through a filing on Form 8-K and/or through some other method or 
combination of methods to ensure broad dissemination of this 
announcement? Would the lack of an affirmative requirement to announce 
a change in a company's filing status disadvantage investors or the 
markets?
4. Impact of Accelerated Filing Deadlines
    The proposed shortening of the due dates for quarterly and annual 
reports could create the risk that more companies would file their 
reports late or would need a filing extension.

[[Page 19902]]

Moreover, if a company was late in filing its reports, it would lose 
the availability of short-form registration for at least one year from 
the date of the late filing. Being late also could render Securities 
Act Rule 144 temporarily unavailable for security holders' resales of 
restricted and control securities, and make new filings on Form S-8 
temporarily unavailable for resales of employee benefit plan 
securities.\62\
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    \62\ Securities Act Rule 144 [17 CFR 230.144] requires that for 
such a resale to be valid, the issuer of the securities must have 
made all filings required under the Exchange Act during the 
preceding 12 months. Form S-8 [17 CFR 239.16b] requires that an 
issuer be current in its reporting for the last 12 calendar months 
(or such shorter period that the issuer was required to file such 
reports and materials). If a company was late in filing its reports, 
the company would lose Rule 144 eligibility and eligibility to file 
a Form S-8 during the time that the company was not current in its 
reporting.
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Questions Regarding the Impact of Accelerating Filing Deadlines

     Are there ways we can minimize these negative effects 
aside from continuing to permit companies to rely on Exchange Act Rule 
12b-25 for extensions of the annual report and quarterly report 
deadlines?\63\
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    \63\ 17 CFR 240.12b-25. If a company complies with Rule 12b-25, 
it can file its annual report no later than the fifteenth calendar 
day following the prescribed due date for that report, and the 
report will be deemed to be filed on the prescribed due date. For 
quarterly reports, the company can file its quarterly report no 
later than the fifth calendar day following the prescribed due date 
for that report, and the report will be deemed to be filed on the 
prescribed due date.
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     Would the current filing extension periods remain 
sufficient under accelerated deadlines? Should these periods be 
shortened (for example, to 10 days for an annual report or three days 
for a quarterly report) to conform to the accelerated filing due dates 
of these reports and to ensure timely filings? Would shorter periods 
provide companies with enough time to make Exchange Act Rule 12b-25 
useful? Instead, should these periods be lengthened (for example, to 20 
days for an annual report or 10 days for a quarterly report) to provide 
companies more time to file their reports because of the effect of 
accelerated filing due dates? What factors should we consider in 
determining whether and by how much these periods should be changed?
     Would companies not subject to the accelerated deadlines 
find it more difficult to retain the necessary outside advisors to 
prepare their reports in the appropriate timeframe? Would the quality 
of their reports suffer?
     Would companies that currently integrate their annual or 
quarterly reports to security holders with their Form 10-K or Form 10-Q 
reports, or publish and mail both in a single document, encounter 
difficulty in meeting the accelerated due dates? \64\
---------------------------------------------------------------------------

    \64\ See General Instructions G and H of Form 10-K and General 
Instructions D and E of Form 10-Q.
---------------------------------------------------------------------------

     Are there special circumstances associated with the 
preparation of transition reports that weigh against reducing the 
filing periods for those reports?
5. Transition Period
    We expect that, if adopted, the proposal would have a delayed 
effectiveness date to provide affected companies with time to prepare 
for the transition to shortened due dates. Companies could, of course, 
voluntarily file their reports sooner during this transition period, 
just as they may today. If we adopt the proposal, we expect to make the 
proposal effective for companies that meet the public float and 
reporting history requirements as of the end of their first fiscal year 
ending after October 31, 2002. We request comment on the factors we 
should consider in selecting an appropriate transition period.

B. Website Access to Information

1. Reasons for Proposal
    Widespread access to timely corporate information promotes the 
efficient functioning of the secondary markets by enabling investors to 
make informed investment and voting decisions. Further, ready access to 
Exchange Act information is critical to short-form registration of 
securities offerings by seasoned issuers under the Securities Act. Our 
system of short-form registration, which is available in varying 
degrees for domestic issuers on Forms S-2,\65\ S-3, S-4,\66\ and S-
8,\67\ allows certain information about the company conducting the 
offering to be incorporated by reference from the company's Exchange 
Act reports without, in many instances, separate delivery of these 
reports. One rationale for these abbreviated registration forms is that 
the information in a company's Exchange Act reports already has been 
adequately disseminated and evaluated by the marketplace.
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    \65\ 17 CFR 239.12.
    \66\ 17 CFR 239.25.
    \67\ 17 CFR 239.16b.
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    The development of the Internet has revolutionized information 
production, availability, and dissemination.\68\ The increased 
availability of information has helped to promote transparency, 
liquidity, and efficiency in our capital markets. One of the key 
benefits of the Internet is that companies can make information 
available to many investors and the financial markets quickly and in a 
cost-effective manner. Online access to Internet information also helps 
to democratize the capital markets by enabling many small investors to 
access corporate information just as readily as large institutional 
investors.\69\
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    \68\ See, for example, note 25 above.
    \69\ See, for example, Ianthe Jeanne Dugan, ``Small Investors 
United by Web Find New Power,'' The Washington Post, May 30, 1999, 
at A01.
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    We have taken a number of steps to encourage companies and market 
intermediaries to take advantage of electronic media to communicate 
with, and deliver information to, investors.\70\ We also have relaxed 
restrictions on communications by companies with security holders and 
the financial markets in connection with business combinations and 
similar transactions, thereby allowing companies greater flexibility to 
communicate, including via the Internet.\71\ For 18 years, we have been 
continually improving and modernizing electronic access to companies' 
Exchange Act reports through our EDGAR system, including by providing 
Internet access to these reports.\72\
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    \70\ We have issued a series of interpretive releases to 
encourage the use of electronic media to satisfy document delivery 
requirements under the federal securities laws. See, for example, 
Release No. 33-7233 (Oct. 6, 1995) [60 FR 53458] (the ``1995 
Release''); Release No. 33-7289 (May 9, 1996) [61 FR 24652]; and 
Release No. 33-7856 (Apr. 28, 2000) [65 FR 25843] (the ``2000 
Release''). Last October, we announced that we are currently 
reviewing whether our previous pronouncements on electronic delivery 
should be modified. See In the Matter of The American Separate 
Account 5 of The American Life Insurance Company of New York, 
Release No. 33-8027 (Oct. 25, 2001) (available at www.sec.gov).
    \71\ See Release No. 33-7760 (Oct. 22, 1999) [64 FR 61408]. In 
that release, we adopted a new regulatory system that relaxes 
restrictions on communications in cash tender offers, mergers, 
exchange offers, and proxy solicitations.
    \72\ Numerous third-party vendors also make information filed 
with the Commission electronically available to investors, but many 
charge fees for this service.
---------------------------------------------------------------------------

    An efficient and economical method for companies to make 
information available about themselves to many investors is through an 
Internet website. In addition to other existing sources of company 
information, such as our website, a company's website is often an 
obvious place for investors to find information about a company. 
Investors following particular companies can use electronic devices to 
alert them to the posting of new information about the companies on a 
website. Many companies, realizing the benefits of this technology for 
information dissemination, have established websites to furnish company 
and industry information. As discussed

[[Page 19903]]

below, a substantial number of these companies also already provide 
access to their Commission filings through their websites.
    Modernizing the disclosure system under the federal securities laws 
involves recognizing the importance of the Internet in fostering prompt 
and more widespread dissemination of information. We believe company 
disclosure should be more readily available to investors on a timely 
basis in a variety of locations to facilitate investor access to that 
information. We believe it is important for companies to make investors 
aware of the different sources that provide access to company 
information.
2. Description of Proposal
    We encourage companies to make their Commission filings as broadly 
available to the public as possible. In particular, we encourage every 
reporting company to make its filings available to investors free of 
charge on its Internet website, if it has one, as soon as reasonably 
practicable after, and in any event on the same day as, such material 
is electronically filed with or furnished to the Commission. We applaud 
the efforts already being made by many reporting companies to provide 
access to their Commission filings through their websites. We would 
like more companies to make similar efforts. We also would like to 
encourage companies to disseminate their Exchange Act reports via their 
websites to promote consistent and relative uniform access to these 
reports in the place where investors may most likely look for them. 
Website access to Exchange Act reports helps to promote consistent, 
direct, timely, and more widespread access of information to investors 
and the financial markets. It also furthers the proper functioning of 
the integrated disclosure and short-form registration systems. However, 
we do not want to impose undue burdens and expenses on companies that 
may not have the resources to provide such access.
    Accordingly, we propose to require companies that would be subject 
to our proposed accelerated filing deadlines (that is, companies with 
at least a $75 million public float, that have been subject to the 
Exchange Act reporting requirements for at least 12 calendar months, 
and that have filed at least one annual report) to disclose in their 
annual reports on Form 10-K the following:\73\
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    \73\ See proposed revisions to Item 101(e) of Regulation S-K.
---------------------------------------------------------------------------

     That the public may read and copy the company's filings at 
our Public Reference Room, and can access information electronically 
filed on our website; \74\
---------------------------------------------------------------------------

    \74\ This disclosure element is currently required of electronic 
filers in Securities Act registration statements by Item 101(e) of 
Regulation S-K. In this regard, our proposed amendments also would 
require this disclosure element for accelerated filers that file 
annual reports on Form 10-K.
---------------------------------------------------------------------------

     The company's website address, if it has one; \75\
---------------------------------------------------------------------------

    \75\ The inclusion of the company's website address would not, 
by itself, include or incorporate by reference the information on 
the site into the company's Commission filing (unless the company 
otherwise acts to incorporate the information by reference). In this 
instance, we would not consider the presence of the Internet address 
to make the company's website part of the company's filing if the 
company takes reasonable steps to ensure that the address is 
inactive (for example, by removing ``a>href'' tagging) and includes 
a statement to denote that the address is an inactive textual 
reference only. See, for example, the 2000 Release, note 70 above, 
at n.41 and the accompanying text.
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     Whether the company makes available free of charge on its 
website, if it has one, its annual report on Form 10-K, quarterly 
reports on Form 10-Q, current reports on Form 8-K, and all amendments 
to those reports as soon as reasonably practicable after, and in any 
event on the same day as, such material is electronically filed with or 
furnished to the Commission;
     If the company does not make its filings available in this 
manner, the reasons why it does not do so (including, where applicable, 
that it does not have an Internet website);
     If the company does not make its filings available in this 
manner, one or more locations where the public can access these filings 
electronically immediately upon filing, if any, and whether there is a 
fee for such access; and
     Whether the company voluntarily will provide electronic or 
paper copies of its filings free of charge upon request.
    We understand that companies currently provide website access to 
their Exchange Act reports in a variety of ways, including by 
establishing a hyperlink to its Exchange Act reports via a third-party 
service in lieu of maintaining the reports itself.\76\ In this case, we 
encourage companies to hyperlink directly to the company's reports (or 
to a list of its reports) instead of just to the home page of the 
third-party service. Currently, hyperlinking to our EDGAR system would 
not allow a company to state that it provides website access to its 
reports as soon as reasonably practicable after, and in any event on 
the same day, as those reports are filed. This is because filings on 
the Commission's EDGAR website currently are posted after a 24-hour 
delay. Similarly, if a company did not provide website access to its 
reports in the manner proposed, reference to our EDGAR website would 
not currently qualify as one of the locations where those filings are 
available immediately in electronic form. We anticipate eliminating 
this 24-hour delay for filings posted to our website, thus providing 
real-time posting of disseminated filings.
---------------------------------------------------------------------------

    \76\ In the 2000 Release, we provided interpretive guidance on 
the possible effects of hyperlinking to a third party website. See 
the 2000 Release, note 70 above, at n.48 and the accompanying text.
---------------------------------------------------------------------------

    Whether a company provides access to its Exchange Act reports 
either directly or through a third-party service, we recognize that 
some companies display the reports in electronic formats (for example, 
PDF) other than the official electronic format used to transmit the 
filing to our EDGAR system. In fact, we encourage companies to do so if 
alternative formats enhance readability and accessibility of the 
reports, so long as all of the information in the reports remains 
retrievable. However, the use of a particular medium to access the 
reports should not be so burdensome that the intended recipients cannot 
effectively access the information provided.\77\
---------------------------------------------------------------------------

    \77\ See, for example, the 1995 Release, note 70 above, at n. 24 
and the accompanying text.
---------------------------------------------------------------------------

    We also encourage companies at a minimum to provide website access 
to their previous reports for at least a twelve month period. Of 
course, we encourage companies to provide access to their previous 
reports on an appropriately archived portion of their website over an 
even longer timeframe. We also encourage companies to provide website 
access to all of their filings with the Commission, including their 
filings under the proxy rules and their Securities Act filings.

Questions Regarding Our Website Access Proposal

     Would our proposal aid in encouraging companies to make 
information available in a variety of locations and hence make 
corporate information more widely accessible and disseminated? Would 
investors find this information useful? Would the proposed disclosure 
requirement provide sufficient notice to investors of the available 
sources of corporate information?
     The proposed new disclosure requirement only would apply 
to companies subject to the accelerated filing deadlines. Is excluding 
small issuers appropriate? Is the need for timely information about 
these issuers greater than the additional burden or expense these 
issuers would incur due

[[Page 19904]]

to the proposed new requirement? Should all reporting companies be 
subject to the proposed new requirement?
     The proposal only would apply to companies that file on 
Form 10-K. Should we also include foreign private issuers that file on 
Form 20-F? Would expanding this requirement be overly burdensome?
     What are the expected additional costs of posting Exchange 
Act reports on company websites, either directly or by hyperlinking to 
a third-party service? Please specify the types of costs that would be 
incurred and quantify them, if possible.
     Would the proposed new disclosure be overly burdensome? 
Should additional disclosure be required? Is some of the proposed 
disclosure not necessary or appropriate?
     Is additional guidance necessary in how to comply with the 
proposal? If so, in what areas would guidance be helpful?
     Should the disclosure appear in other company filings, 
such as quarterly reports? We encourage companies also to put this 
disclosure in their annual report to shareholders.
     Our proposal would require disclosure of a company's 
Internet address. Is this requirement helpful to investors? What are 
the ramifications of requiring disclosure of a company's website 
address? Are there reasons why a company would not want to provide 
disclosure of its website address?
     We have not proposed a conforming change to require 
disclosure of a company's website address in Securities Act 
registration statements. Currently, companies are only encouraged to 
provide their website address in these documents. We request comment on 
whether we should make this conforming change. Would there be any 
negative impacts from this change?
     Should a company be required to disclose whether it 
provides access to all of its Exchange Act filings (and not just its 
periodic and current reports)? Should access to exhibits or 
supplemental schedules be excluded? Should Securities Act filings be 
included? Should information under the proxy rules be included, or at 
least the information required by Part III of Form 10-K incorporated by 
reference from a company's definitive proxy or information statement?
     We recognize that not all investors may have ready access 
to the Internet. Are there additional ways to facilitate access to 
Commission information for those without Internet access?
3. Impact of Website Proposal
    The participants at the financial disclosure and auditor oversight 
roundtables noted that many companies already provide website access to 
their Exchange Act reports as a matter of good corporate practice.\78\ 
Our Office of Economic Analysis examined a sample of 152 companies with 
at least a $75 million public float to determine how many of these 
companies have websites and how many already provide access to their 
Commission filings through their websites. According to this analysis, 
all of the companies sampled maintained an Internet website. 
Approximately 83% of those with websites provided some form of access 
to their Commission filings through their websites, either via a 
hyperlink with a third-party service providing real-time access to the 
filings (45%), by posting the filings directly on their websites (29%) 
or via a hyperlink to our EDGAR database (15%). Not all of the 
companies providing access directly on their websites provided access 
to all of their Exchange Act reports.
---------------------------------------------------------------------------

    \78\ In addition, according to the NIRI survey, 89% of the 
respondents did not anticipate that they would encounter any 
significant problems if required to post Exchange Act reports on 
their websites at the same time they transmitted the filings to the 
Commission. See note 49 above.
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    While we believe that this proposal would benefit investors of all 
companies, we seek to minimize any new costs or burdens that affected 
companies may incur. Therefore, we are only proposing this new 
requirement for companies subject to the accelerated filing deadlines. 
According to available data, most of these companies already provide 
some form of Internet access to corporate information. As with our 
proposal to accelerate filing deadlines, disclosure of real-time access 
to the filings of these companies may be particularly appropriate given 
their ability to rely on short-form registration.
4. Transition Period
    As with the proposal to shorten the deadlines for quarterly and 
annual reports, we anticipate that a transition period would be 
necessary for this proposal, if adopted. This transition period would 
give affected companies sufficient time to modify their websites or 
make other arrangements as necessary to provide the new disclosure. 
Accordingly, we propose to make the new disclosure requirement 
effective three months after the date of adoption. We request comment 
on the appropriate length of this transition period.

C. General Request for Comment

    We invite any interested person wishing to submit written comments 
on the proposed amendments, and any other matters that might have an 
impact on the proposed amendments, to do so. We specifically request 
comment from companies that would be subject to the accelerated filing 
deadlines and new website disclosure requirements, investors, and other 
users of Exchange Act information, as well as facilitators of capital 
formation, such as underwriters. We also specifically request comment 
on any conforming changes that should be made to rules and regulations 
under the Securities Act or Exchange Act for other Commission filings.

III. Paperwork Reduction Act

    The proposed amendments contain ``collection of information'' 
requirements within the meaning of the Paperwork Reduction Act of 1995 
(``PRA'').\79\ We are submitting the proposed amendments to the Office 
of Management and Budget (``OMB'') for review in accordance with the 
PRA.\80\ The titles for the collection of information are ``Form 10-K'' 
and ``Form 10-Q.'' An agency may not conduct or sponsor, and a person 
is not required to respond to, a collection of information unless it 
displays a currently valid OMB control number.
---------------------------------------------------------------------------

    \79\ 44 U.S.C. 3501 et seq.
    \80\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.
---------------------------------------------------------------------------

    Form 10-K (OMB Control No. 3235-0063) was adopted pursuant to 
Sections 13 and 15(d) of the Exchange Act and prescribes information 
that a registrant must disclose annually to the market about its 
business. Preparing and filing an annual report on Form 10-K is a 
collection of information.
    Form 10-Q (OMB Control No. 3235-0070) was adopted pursuant to 
Sections 13 and 15(d) of the Exchange Act and prescribes information 
that a registrant must disclose quarterly to the market about its 
business. Preparing and filing a quarterly report on Form 10-Q is a 
collection of information.
    We currently estimate that Form 10-K results in a total annual 
compliance burden of 4,035,120 hours and an annual cost of 
$3,631,608,000. The burden was calculated by multiplying the estimated 
number of respondents filing Form 10-K annually (9,384) by the 
estimated average number of hours each entity spends completing the 
form (1,720 hours). We estimate that 25% of the burden is prepared by 
the respondent (9,384  x  1,720  x  0.25 = 4,035,120). We estimate that 
75% of the burden is prepared by outside advisors retained by the 
respondent at an average

[[Page 19905]]

cost of $300 per hour (9,384  x  1,720  x  0.75  x  $300 = 
$3,631,608,000). This portion of the burden is reflected as a cost.
    We currently estimate that Form 10-Q results in a total annual 
compliance burden of 909,364 hours and an annual cost of $818,427,600. 
The burden was calculated by multiplying the estimated number of 
reports on Form 10-Q filed annually (26,746) by the estimated average 
number of hours each entity spends completing the form (136 hours). We 
estimate that 25% of the burden is prepared by the respondent (26,746 
x  136  x  0.25 = 909,364). We estimate that 75% of the burden is 
prepared by outside advisors retained by the respondent at an average 
cost of $300 per hour (26,746  x  136  x  0.75  x  $300 = 
$818,427,600). This portion of the burden is reflected as a cost.

A. Summary of Proposed Amendments

    The proposed amendments, if adopted, would accelerate the filing 
deadlines of quarterly reports on Form 10-Q and annual reports on Form 
10-K by companies subject to our proposed public float and reporting 
history requirements. The proposed amendments, if adopted, also would 
require those companies to disclose in their annual reports on Form 10-
K where investors can obtain access to company filings, including 
whether the company provides access to its Exchange Act reports free of 
charge on its Internet website, as soon as reasonably practicable, and 
in any event on the same day as, those reports are electronically filed 
with or furnished to the Commission. If a company does not provide 
website access in this manner, it must also disclose the reasons why it 
does not do so, and where else investors can access its Exchange Act 
reports. We also propose to require companies to disclose their website 
address if they have one. We believe that the proposed revisions would 
promote direct, uniform and more widespread dissemination of timely 
information to investors and the markets and further the purposes of 
short-form registration under the Securities Act.

B. Reporting and Cost Burden Estimates

    We estimate that approximately 59% of Form 10-K and Form 10-Q 
respondents, or 5,494 respondents, would satisfy our proposed 
definition of accelerated filers, and thus would be subject to 
accelerated deadlines and the requirement to make the enhanced 
disclosure in their Form 10-K regarding website access to their 
Exchange Act reports.\81\
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    \81\ We arrived at this estimate by multiplying the approximate 
number of respondents that file on Form 10-K that do not only have a 
class of securities registered under Section 15(d) of the Exchange 
Act (and hence are less likely to have listed equity and therefore a 
public float) (7,384) by 74.4%, which represents the percentage of 
companies in Standard & Poors Research Insight Compustat Database 
with a market capitalization above $75 million out of the total 
number of companies in the Compustat Database with a market 
capitalization above $25 million (the upper limit for small business 
filers on Form 10-KSB). It is our understanding that the data in the 
Compustat Database is derived principally from larger companies, so 
our estimate may overstate the actual percentage of companies that 
would be affected by the proposals.
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    For our proposal regarding filing deadlines, the amount of 
information required to be included in Exchange Act reports would 
remain the same. Accordingly, for purposes of the Paperwork Reduction 
Act, our preliminary estimate is that the amount of time necessary to 
prepare the reports, and hence, the total amount of burden hours, would 
not change. However, there is the possibility that preparing these 
reports on a shorter timeframe may result in the respondent investing 
more resources in technology, relying to a greater extent on outside 
advisors, or that the average cost associated with the portion of the 
burden prepared by outside advisors may increase. Accelerating the 
filing deadline may, on the other hand, increase efficiencies in 
preparing these reports and decrease the burden over time. We request 
comment on whether, for purposes of the Paperwork Reduction Act, the 
burden will increase or decrease. If so, by what amount? Would the 
proposal have any other effect on the total compliance burden?
    We estimate that the preparation of the required disclosure 
regarding information access in a respondent's Form 10-K would add 0.50 
burden hours to each annual report on Form 10-K. Thus, we estimate this 
aspect of the proposal will add an additional 2,747 burden hours to the 
current Form 10-K (0.50 hours  x  5,494 respondents). We estimate that 
25% of the burden is prepared by the respondent (0.50  x  5,494  x  
0.25 = 687). We estimate that 75% of the burden is prepared by outside 
advisors retained by the respondent at an average cost of $300 per hour 
(0.50  x  5,494  x  0.75  x  $300 = $618,075). This portion of the 
burden is reflected as a cost.
    As a result, we estimate the total annual compliance burden for 
Form 10-K after our proposed revisions to be 4,035,807 hours and an 
annual cost of $3,632,226,075, an increase of 687 hours and $618,075 in 
cost. Compliance with the disclosure requirement would be mandatory. 
There would be no mandatory retention period for the information 
disclosed, and responses to the disclosure requirements will not be 
kept confidential. We do not believe that the imposition of this 
requirement would alter significantly the number of respondents that 
file on Form 10-K.

C. Request for Comment

    We request comment in order to (a) evaluate whether the proposed 
collections of information are necessary for the proper performance of 
the functions of the Commission, including whether the information will 
have practical utility; (b) evaluate the accuracy of our estimates of 
the burden of the proposed collections of information; (c) determine 
whether there are ways to enhance the quality, utility, and clarity of 
the information to be collected; (d) evaluate whether there are ways to 
minimize the burden of the collections of information on those who 
respond, including through the use of automated collection techniques 
or other forms of information technology; and (e) evaluate whether the 
proposed amendments will have any effects on any other collections of 
information not previously identified in this section.
    Any member of the public may direct to us any comments concerning 
the accuracy of these burden estimates and any suggestions for reducing 
the burdens. Persons who desire to submit comments on the collection of 
information requirements should direct their comments to the OMB, 
Attention: Desk Officer for the Securities and Exchange Commission, 
Office of Information and Regulatory Affairs, Washington, DC 20503, and 
send a copy of the comments to Jonathan G. Katz, Secretary, Securities 
and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549, 
with reference to File No. S7-08-02. Requests for materials submitted 
to the OMB by us with regard to these collections of information should 
be in writing, refer to File No. S7-08-02, and be submitted to the 
Securities and Exchange Commission, Records Management, Office of 
Filings and Information Services, 450 Fifth Street NW., Washington DC 
20549. Because the OMB is required to make a decision concerning the 
collections of information between 30 and 60 days after publication, 
your comments are best assured of having their full effect if the OMB 
receives them within 30 days of publication.

[[Page 19906]]

IV. Cost-Benefit Analysis

    The proposed amendments are part of our initiative to modernize and 
improve the regulatory system for periodic disclosure under the 
Exchange Act. We are sensitive to the costs and benefits that result 
from our rules. In this section, we examine the benefits and costs of 
our proposed amendments. We request that commenters provide views and 
supporting information as to the benefits and costs associated with the 
proposals. We seek estimates of these costs and benefits, as well as 
any costs and benefits not already identified.
    The proposed rule and form changes would enhance the timeliness and 
availability of disclosure in Exchange Act reports in two ways:
     Shortening the due dates of quarterly and annual reports 
(and transition reports) for domestic reporting companies that meet 
certain public float and reporting history requirements; and
     Requiring companies to disclose in their annual reports on 
Form 10-K where investors can obtain access to company filings, 
including whether companies provide access to their Exchange Act 
reports on their Internet websites.

A. Acceleration of Quarterly and Annual Report Due Dates

    The due dates for quarterly and annual reports by domestic issuers 
have not changed in over 30 years, despite enormous advances in 
information technology and productivity. Many companies now routinely 
release quarterly and annual results well before they file their formal 
reports with us. However, the presentation of these results vary and 
may not contain all of the information found in a company's Exchange 
Act reports. Delayed filing of reports means investors often make 
decisions without the more extensive information in the company's 
Exchange Act reports.
    Shortening the due dates for quarterly, annual and transition 
reports would provide many benefits. Most importantly, it would 
accelerate the delivery of information to investors and the capital 
markets, enabling them to make more informed investment and valuation 
decisions.\82\ This helps the capital markets function more 
efficiently, which means more efficient valuation and pricing. 
Shortening the due dates would help shorten the information gaps 
between the end of a fiscal year or quarter, a company's announcement 
of earnings results and the filing of more extensive information in its 
periodic reports. The information in Exchange Act reports, due to its 
required nature and the liability to which it is subject, provides a 
verification function against other statements made by the company. 
Investors can judge previous informal statements by the company against 
the more extensive disclosure provided in the reports, including 
financial statements prepared in accordance with generally accepted 
accounting principles. Accelerating the availability of this 
information thus shortens the delay before this verification can occur. 
In addition, the information in these reports often is used in 
comparative and other quantitative financial analyses. Accordingly, 
earlier availability of this information may decrease the time before 
these analyses can occur.
---------------------------------------------------------------------------

    \82\ Some academic evidence shows that annual reports on Form 
10-K filed through the EDGAR system provide incremental information 
to the market even after the firm has made an earnings announcement. 
See, for example, Daqing Qi, Woody Wu, and In-Mu Haw, 2000, ``The 
Incremental Information Content of SEC 10-K Reports Filed Under the 
EDGAR System,'' Journal of Accounting, Auditing, and Finance 15 
(Winter) : 25-45.
---------------------------------------------------------------------------

    Also, the accelerated filing of reports could serve to make them 
more relevant to investors, thereby increasing the use of such reports 
and investor scrutiny of them. Increased focus on and scrutiny of the 
reports may in turn cause an increase in their quality. Moreover, 
seasoned issuers incorporate information from their Exchange Act 
reports in their Securities Act registration statements. Hence, 
investors buying in these public offerings, particularly in on-going 
shelf offerings, would also benefit from more timely disclosure. All of 
these benefits are difficult to quantify.
    The proposed amendments may increase the costs to the affected 
reporting companies, although companies may, and some already do, 
report within the proposed deadlines voluntarily. Specifically, the 
amendments may increase the costs in preparing quarterly and annual 
reports because although companies already must prepare their quarterly 
and annual reports, they may have to delay other projects or use 
additional resources, including in-house personnel, outside legal 
counsel and outside auditors to prepare the information in a shorter 
timeframe. These costs may vary by company given their individual 
circumstances, such as the complexity of their business or industry. 
Some companies also may need to make additional capital investments, 
such as in additional information systems, to prepare their reports in 
a shorter timeframe.
    We anticipate that some, and perhaps most, of these costs may be 
short-term or one-time costs to adjust a company's reporting procedures 
to a shorter timeframe. Our proposed requirements that limit the 
application of shortened due dates only to companies with a minimum 
public float and reporting history also may help to minimize the impact 
on companies that may find it more difficult to bear these costs. In 
addition, it is our understanding that a company's audit (or review in 
the case of interim financial statements) is complete or substantially 
complete by the time it issues its earnings announcement, which often 
occurs today well before the proposed filing due dates. We request 
comment on the type, amount and duration of these costs.
    The proposed amendments may have indirect effects as well. 
Preparing the information on a 33% shorter timeframe could create a 
risk that the quality or accuracy of the information would diminish. We 
do not propose to change the liability standards for these reports, nor 
do we propose to decrease the amount of information required in these 
reports. Investors and the capital markets may suffer if quality or 
accuracy diminished, causing the markets to function less efficiently 
and investment decisions to be impaired. Another possible effect is 
that more affected companies may be late in filing their periodic 
reports, or more companies may request additional time to file their 
reports under Exchange Act Rule 12b-25. Either result could delay the 
delivery of information to investors and the market. Moreover, if a 
company was late in filing its reports, it would lose eligibility for 
short-form registration for at least one year, and Securities Act Rule 
144 and Form S-8 would be temporarily unavailable during the period of 
noncompliance. This could negatively affect shareholders reselling or 
attempting to resell securities or employees whose securities are 
subject to Form S-8.
    Smaller companies are likely to be more sensitive to any increased 
costs in preparing their reports. These entities may not have the 
infrastructure and resources available or necessary to prepare their 
reports on a shorter timeframe. As a result, shorter timeframes could 
discourage companies near the accelerated filer threshold from becoming 
public companies or accessing the public securities markets. This may 
adversely impact their ability to raise capital, the ability of their 
investors to obtain adequate information and the liquidity of their 
securities. Our proposal limits the application of

[[Page 19907]]

shortened deadlines to issuers with a certain public float and 
reporting history, effectively excluding all issuers that may rely on 
our small business reporting system. We request comment regarding these 
matters, including empirical data if possible.
    We considered several regulatory alternatives in formulating our 
proposals. In our 1998 release proposing Securities Act reform, we 
proposed requiring companies to report selected financial information 
on Form 8-K on the earlier of the date they issue a press release 
containing earnings information or either the date that is 30 days 
after the end of each of the first three quarters of their fiscal year 
or 60 days after the end of their fiscal year. However, this 
information would not contain the more extensive information found in 
the quarterly and annual periodic reports, and in many instances only 
would repeat the information in the earnings press release. Moreover, 
we have subsequently adopted Regulation FD to address some of the 
concerns over selective disclosure of information.\83\ We also 
considered linking the filing of a company's annual and quarterly 
reports to its public earnings announcements, but we were concerned 
that this only would serve to delay earnings releases, which may not be 
helpful to investors.
---------------------------------------------------------------------------

    \83\ See 17 CFR 243.100-103.
---------------------------------------------------------------------------

    We have been considering shortening filing deadlines for all 
reporting companies, although we do not propose to do so at this time. 
Although we believe investors in less large or unseasoned companies may 
want and benefit from more timely disclosures just as much as investors 
in larger, listed companies, we are concerned that this may impose 
undue burden and expense on these companies. Accordingly, we propose 
shortening the filing deadlines only for companies with a minimum 
public float or reporting history. Of course, smaller companies may 
file their reports earlier voluntarily. We have been considering 
several different conditions for shortening deadlines, but based on our 
research and past experience, we believe the public float test 
currently used in Form S-3 is consistent with our purposes. We request 
comment regarding the relative costs and benefits of pursuing 
alternative regulatory approaches.

B. Website Access to Information

    Widespread access to timely company information promotes the 
efficient functioning of the capital markets. Also, ready access to 
Exchange Act information is critical to short-form registration of 
securities offerings by seasoned issuers. One rationale for short-form 
registration is that the information in a company's Exchange Act 
reports already has been adequately disseminated and absorbed by the 
market place.
    Many aspects of our disclosure system were adopted well before the 
revolutions in information technology brought about by the Internet. In 
modernizing and improving our disclosure system, we should recognize 
the benefits of the Internet in promoting the more widespread 
dissemination of information. An efficient and cost effective method 
for companies to make information available about themselves is through 
their Internet website. In addition to other existing sources of 
company information, such as our website, a company's website is one 
obvious place for many investors to find information about a company. 
We encourage companies to provide investors with website access to 
their Exchange Act reports. We believe company disclosure should be 
more readily available to investors on a timely basis in a variety of 
locations to facilitate investor access to that information. We believe 
it is important for investors to know of additional sources where they 
can access company information.
    Providing this disclosure and encouraging companies to post their 
Exchange Act reports on their websites would provide many benefits. The 
proposal protects investors by alerting them to sources where they can 
obtain direct and easy access to the information they should have to 
make informed investment and valuation decisions. It would help promote 
consistent, direct, timely and more widespread access of information to 
investors and the markets, and further the proper functioning of the 
integrated disclosure and short-form registration system. An 
efficiently functioning registration system facilitates capital 
formation. Not all reporting companies now make their Exchange Act 
filings available through their websites, and not all the ones that do 
make information available provide access in real-time. Our proposal 
would encourage uniform best practices to aid in an investor's search 
for timely information, thereby potentially reducing the costs to 
gather such information. For those companies that elect not to provide 
website access, our proposed disclosure requirement would provide 
investors with the information necessary to locate this information on 
an ongoing basis. These potential benefits are difficult to quantify. 
We request comment on our assessment of these benefits, including 
information on the ability to quantify these benefits.
    The proposed amendments may also increase the costs to affected 
companies, although we seek to minimize those costs. Companies would be 
required to include minimal additional disclosure in their annual 
report on Form 10-K. For purposes of the Paperwork Reduction Act, we 
estimate this will result in a total additional burden of 687 hours and 
$618,075 in additional costs for all affected companies. Our proposal 
would only apply to companies that meet our proposed public float and 
reporting history requirements, which should help to minimize the 
impact on companies potentially less able to bear additional costs. Our 
proposal also would not require a company to provide website access. Of 
course, we encourage all reporting companies to make their reports 
widely available through their websites. We request comment on the 
number of issuers our proposal would impact and the amount of any 
additional costs they may incur.
    We considered several regulatory alternatives in formulating our 
proposal. Many companies already voluntarily provide at least some 
access to their filings on their websites, but not all provide access 
to all of their filings or in real-time. Also, our proposed disclosure 
requirement for companies that do not provide website access provides 
investors with information on where else they can obtain access to 
these filings on an ongoing basis. We considered requiring website 
access to company reports as an additional eligibility requirement for 
short-form registration under the Securities Act. However, we were 
concerned that the potential loss of form eligibility from non-
compliance with the requirement would be overly burdensome on 
companies. We request comment regarding the relative costs and benefits 
of pursuing alternative regulatory approaches.

V. Consideration of Impact on the Economy, Burden on Competition, 
and Promotion of Efficiency, Competition, and Capital Formation

    For purposes of the Small Business Regulatory Enforcement Fairness 
Act of 1996, or ``SBREFA,'' \84\ we solicit data to determine whether 
the proposed amendments constitute ``major'' rules. Under SBREFA, a 
rule is considered

[[Page 19908]]

``major'' where, if adopted, it results or is likely to result in:
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    \84\ Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996) 
(codified in various sections of 5 U.S.C., 15 U.S.C. and as a note 
to 5 U.S.C. 601).
---------------------------------------------------------------------------

     an annual effect on the economy of $100 million or more 
(either in the form of an increase or a decrease);
     a major increase in costs or prices for consumers or 
individual industries; or
     significant adverse effects on competition, investment or 
innovation.
    We request comment on the potential impact of the proposed 
amendments on the economy on an annual basis. Commenters are requested 
to provide empirical data and other factual support for their views if 
possible.
    Section 23(a)(2) of the Exchange Act \85\ requires us, when 
adopting rules under the Exchange Act, to consider the impact that any 
new rule would have on competition. In addition, Section 23(a)(2) 
prohibits us from adopting any rule that would impose a burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Exchange Act.
---------------------------------------------------------------------------

    \85\ 15 U.S.C. 78w(a)(2).
---------------------------------------------------------------------------

    The proposed amendments are intended to improve the timeliness and 
accessibility of Exchange Act reports to investors and the financial 
markets. We anticipate these proposals would enhance the proper 
functioning of the capital markets. This increases the competitiveness 
of companies participating in the U.S. capital markets. The proposals 
would affect certain companies and not others, so the impacts of the 
proposal may not be equally distributed. Also, if not all competitors 
in a given industry are subject to accelerated deadlines, information 
about some competitors may be disclosed ahead of other competitors (for 
example, the filing of material contracts).\86\ This could potentially 
give some competitors an informational advantage. If the proposals to 
shorten filing deadlines increased the number of companies who filed 
their reports late, this could reduce the number of companies eligible 
for short-form and delayed shelf registration. For our website access 
proposal, companies that would be subject to accelerated deadlines may 
incur increased minimal costs from providing additional disclosure that 
would not be incurred by companies not subject to these deadlines.
---------------------------------------------------------------------------

    \86\ The Commission does have rules in place that allow for the 
non-disclosure of certain limited information filed with the 
Commission. See, for example, Exchange Act Rule 24b-2 [17 CFR 
240.24b-2].
---------------------------------------------------------------------------

    We request comment on whether the proposed amendments, if adopted, 
would impose a burden on competition. Commenters are requested to 
provide empirical data and other factual support for their views if 
possible.
    Section 2(b) of the Securities Act \87\ and Section 3(f) of the 
Exchange Act \88\ requires us, when engaging in rulemaking where we are 
required to consider or determine whether an action is necessary or 
appropriate in the public interest, to consider, in addition to the 
protection of investors, whether the action will promote efficiency, 
competition, and capital formation. The proposed amendments would 
enhance our reporting requirements in light of technological advances. 
The purpose of the amendments is to promote greater timeliness and 
accessibility of this information so that investors can more easily 
make informed investment and voting decisions. Informed investor 
decisions generally promote market efficiency and capital formation. As 
noted above, however, the proposals could have certain indirect 
negative effects, such as discouraging or precluding some companies 
near the threshold from using short-form registration, which could 
adversely impact their ability to raise capital. The possibility of 
these effects and their magnitude if they were to occur are difficult 
to quantify.
---------------------------------------------------------------------------

    \87\ 17 U.S.C. 77b(b).
    \88\ 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    We request comment on whether the proposed amendments, if adopted, 
would promote efficiency, competition, and capital formation. 
Commenters are requested to provide empirical data and other factual 
support for their views if possible.

VI. Initial Regulatory Flexibility Analysis

    This Initial Regulatory Flexibility Analysis, or IRFA, has been 
prepared in accordance with the Regulatory Flexibility Act.\89\ This 
IRFA involves proposed amendments to the rules and forms under the 
Securities Act and the Exchange Act to:
---------------------------------------------------------------------------

    \89\ 5 U.S.C. 603.
---------------------------------------------------------------------------

     Shorten the due dates of quarterly and annual reports (and 
transition reports) for domestic reporting companies that meet certain 
public float and reporting history requirements; and
     Requiring companies to disclose in their annual reports on 
Form 10-K where investors can obtain access to company filings, 
including whether companies provide access to their Exchange Act 
reports on their Internet websites.

A. Reasons for, and Objectives of, Proposed Amendments

    The proposed amendments have two primary objectives. First, we 
propose to accelerate disclosure of information to investors and the 
capital markets by shortening the due dates of quarterly and annual 
periodic reports and transition reports for domestic reporting 
companies that meet certain minimum public float and reporting history 
requirements. These due dates have not changed in over 30 years, 
despite advances in information technology and productivity and 
increases in the pace of and need for communications in the capital 
markets. Accelerating the delivery of information to the capital 
markets would help enhance the efficient functioning of those markets. 
Many companies routinely release quarterly and annual financial results 
before they file their formal reports with us. However, the 
presentation in these results vary and may not contain all of the more 
extensive information found in the company's formal reports. Shortening 
the deadlines would shorten this information gap, thereby increasing 
the relevancy of those reports. Investors buying in public offerings of 
issuers that incorporate their Exchange Act reports in their Securities 
Act registration statements also would benefit from more timely 
disclosure.
    Second, we wish to encourage more direct and widespread 
accessibility and dissemination of timely information to investors and 
the capital markets in a variety of locations. Accordingly, we propose 
to require companies subject to the accelerated filing deadlines to 
disclose in their annual reports on Form 10-K where investors can 
obtain access to company filings, including whether the company 
provides access to its Exchange Act reports free of charge on its 
Internet website, as soon as reasonably practicable, and in any event 
on the same day as, those reports are electronically filed with or 
furnished to the Commission. Our proposal would help promote 
consistent, direct, timely and more widespread access of information to 
investors and the markets and further the proper functioning of the 
integrated disclosure and short-form registration system. Not all 
public companies currently make their filings available on their 
websites, and not all provide access to all of their reports or in 
real-time. Our proposal would thus promote greater access for 
investors.

B. Legal Basis

    We are proposing the amendments to the forms and rules under the 
authority set forth in Sections 3(b) and 19(a) of the

[[Page 19909]]

Securities Act \90\ and Sections 12, 13, 15(d) and 23(a) of the 
Exchange Act.
---------------------------------------------------------------------------

    \90\ 15 U.S.C. 77c(b) and 77s(a).
---------------------------------------------------------------------------

C. Small Entities Subject to the Proposed Amendments

    The proposed amendments would affect certain small entities that 
are required to file quarterly and annual periodic reports and 
transition reports under the Exchange Act. For purposes of the 
Regulatory Flexibility Act, Exchange Act Rule 0-10(a) \91\ defines the 
term ``small business'' to be an issuer, other than an investment 
company, that, on the last day of its most recent fiscal year, has 
total assets of $5 million or less. The Securities Act defines a 
``small business'' issuer, other than investment companies, to be an 
issuer that, on the last day of its most recent fiscal year, has total 
assets of $5 million or less and is engaged in or proposes to engage in 
an offering of securities of $5 million or less.\92\
---------------------------------------------------------------------------

    \91\ 17 CFR 240.0-10(a).
    \92\ 17 CFR 230.157.
---------------------------------------------------------------------------

    We estimate that there are approximately 2,500 companies subject to 
the reporting requirements of Sections 13 or 15(d) of the Exchange Act 
that have assets of $5 million or less. The proposal to shorten the 
deadlines for annual and quarterly periodic and transition reports and 
the proposal regarding website access to Exchange Act reports would 
apply to these small entities if they have a public float of $75 
million or more, have been subject to the Exchange Act's reporting 
requirements for at least one year, and have filed at least one annual 
report. We have no way to determine exactly how many small entities 
meet these requirements, although it is unlikely that many of these 
entities would meet the public float requirement.
    According to the Standard & Poors Research Insight Compustat 
Database, of the 711 reporting companies listed with assets of $5 
million or less, 10, or 1.4%, had a market capitalization greater than 
$75 million.\93\ Assuming that this sample is representative of all 
small entities, the public float requirement would have the effect of 
almost completely excluding all small entities. We request comment on 
the number of small entities that would be impacted by our proposals, 
including any available empirical data.
---------------------------------------------------------------------------

    \93\ It is our understanding that the data in the Compustat 
Database is derived principally from larger companies, so our 
estimate could understate the actual percentage of companies that 
would be affected by the proposals.
---------------------------------------------------------------------------

D. Reporting, Recordkeeping, and Other Compliance Requirements

    For reporting companies that meet our proposed public float and 
reporting history requirements, we are proposing to shorten the due 
dates of annual reports on Form 10-K from 90 days to 60 days after a 
reporting company's fiscal year end and the due dates of quarterly 
reports on Form 10-Q from 45 days to 30 days after the first three 
quarters of a company's fiscal year. We propose similar changes to 
transition reports these companies must file when they change their 
fiscal year. We do not propose to change the filing deadlines for other 
companies, including small business issuers eligible to rely on our 
small business reporting system, at this time.
    While the amount of information required to be included in Exchange 
Act reports, and hence the amount of time necessary to prepare them, 
would remain the same, affected companies may be required to use 
additional resources, including in-house personnel, in preparing their 
reports on a shorter timeframe. Small entities that meet the public 
float and reporting history requirements may incur additional costs in 
seeking the help of outside experts, particularly outside legal counsel 
and auditors. We request comment on the ability of affected small 
entities to meet shortened filing deadlines. If they would incur 
additional costs, what are the particular types and amounts of costs 
that may be required, and would small entities be able to bear these 
costs? Would the proposal disproportionately impact small entities?
    Companies that were late in filing their reports would lose 
eligibility for short-form registration for at least one year, and 
Securities Act Rule 144 and Form S-8 would be temporarily unavailable 
during the period of noncompliance.\94\ On the margin, affected small 
entities that are unable, or cannot afford, to prepare their reports on 
a shorter timeframe may be discouraged from remaining public companies 
or accessing the public markets. This may adversely affect their 
ability to raise capital. We request comment on the likelihood of this 
possibility.
---------------------------------------------------------------------------

    \94\ One-time extensions of due dates are available under 
certain circumstances under Exchange Act Rule 12b-25.
---------------------------------------------------------------------------

    We also propose to require accelerated filers to disclose in their 
annual reports on Form 10-K where investors can obtain access to 
company filings, including whether the company provides access to its 
Exchange Act reports free of charge on its Internet website, as soon as 
reasonably practicable, and in any event on the same day as, those 
reports are electronically filed with or furnished to the Commission. 
If a company does not provide such access, it must also disclose why it 
does not do so and where else investors can access these filings 
electronically immediately upon filing. In formulating our proposal, we 
have sought to minimize its costs, particularly on small entities. The 
proposal would apply only to companies that met our proposed public 
float and reporting history requirements. Companies would not be 
required to establish an Internet website for purposes of this 
requirement if they did not otherwise have one. Also, a company could 
elect not to provide website access to their reports as long as they 
disclosed that they have elected not to do so, the reasons why they 
have elected not to do so (which could include cost) and where else the 
public can access the company's reports. We request comment on whether 
there are additional alternatives to further our goal that we have not 
mentioned.
    We seek comment on these views. How difficult would it be for 
affected small entities to comply with the website proposal? Would our 
proposal disproportionately impact small entities?

E. Duplicative, Overlapping or Conflicting Federal Rules

    We believe that there are no rules that duplicate, overlap or 
conflict with the proposed amendments.

F. Significant Alternatives

    The Regulatory Flexibility Act directs us to consider significant 
alternatives that would accomplish our stated objectives, while 
minimizing any significant adverse impact on small entities. In 
connection with our proposals, we considered the following 
alternatives:
     Establishing different compliance or reporting 
requirements or timetables that take into account the resources 
available to small entities;
     Clarifying, consolidating or simplifying compliance and 
reporting requirements under the rules for small entities;
     Using performance rather than design standards; and
     Exempting small entities from all or part of the 
requirements.
    Our proposals to shorten the filing deadlines would apply only to 
entities that meet minimum public float and reporting history 
requirements, which should serve to exclude almost all small

[[Page 19910]]

entities. As a result, different timetables would apply for most small 
entities. We strive to strike a balance between timely delivery of 
information to investors and giving companies enough time to prepare 
their reports. We have been considering the alternative of only 
shortening the filing deadlines for companies whose securities are 
listed on the NYSE or AMEX or quoted on Nasdaq National Market System 
or Small Cap Market. However, we believe investors in companies that 
are not as large or listed but nevertheless meet the public float or 
reporting history requirements may want and benefit from more timely 
disclosures just as much as investors in larger, listed companies. 
Accordingly, we are not proposing to exempt small entities in their 
entirety from the coverage of these proposals, but we will consider 
comments on this point.
    In addition, we are not aware of how to further clarify, 
consolidate or simplify these proposals for small entities. In this 
regard, we are proposing already to limit the shortened deadlines to 
entities that meet minimum public float and reporting history 
requirements. We do not consider using performance rather than design 
standards to be consistent with our statutory mandate of investor 
protection in the present context. Because specified information in 
Exchange Act reports must be reported in a timely manner to be useful, 
design standards are necessary to achieve the objectives of the 
proposal. We request comment, however, on these matters.
    Our proposals regarding disclosure of website access to company 
reports are designed to enhance the accessibility and dissemination of 
information to investors. These proposals also would apply only to 
entities that met minimum public float and reporting history 
requirements, which should serve to exclude almost all small entities. 
We believe our proposals strike a balance between providing investor 
access to information and giving companies alternatives in providing 
this access. Different compliance or reporting requirements for 
affected small entities or exemptions for all affected small entities 
are not considered warranted at this time because it is just as 
important that information be adequately disseminated and easily 
available for affected small entities as it is for large entities, if 
not more so. The expected low costs of complying with the proposal, as 
well as the effect of the proposed public float requirement in 
lessening the impact on small entities, also contributed to our 
proposal not to exclude small entities in their entirety.
    Companies could choose whether to provide website access and 
therefore the disclosure that would be necessary in their annual report 
on Form 10-K. This allows companies, including small entities, the 
flexibility to choose the alternative that bests suits their individual 
circumstances. We believe this freedom should apply to all entities, 
large and small. We are not aware of ways to further clarify, 
consolidate or simplify these proposals for small entities. We request 
comment, however, on these matters.

G. Request for Comments

    We encourage the submission of comments with respect to any aspect 
of this IRFA. In particular, we request comment on the number of small 
entities that would be affected by the proposed amendments, the nature 
of the impact, how to quantify the number of small entities that would 
be affected, and how to quantify the impact of, the proposed 
amendments. Commenters are requested to describe the nature of any 
effect and provide empirical data and other factual support for their 
views if possible. These comments will be considered in the preparation 
of the Final Regulatory Flexibility Analysis, if the proposed 
amendments are adopted, and will be placed in the same public file as 
comments on the proposed amendments.

VII. Statutory Authority

    The amendments contained in this release are being proposed under 
the authority set forth in Sections 3(b) and 19(a) of the Securities 
Act and Sections 12, 13, 15(d) and 23(a) of the Exchange Act.

Text of Proposed Amendments

List of Subjects in 17 CFR Parts 229, 240 and 249

    Reporting and recordkeeping requirements, Securities.

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

PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES 
ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND 
CONSERVATION ACT OF 1975--REGULATION S-K

    1. The authority citation for part 229 continues to read, in part, 
as follows:

    Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 
77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 
77nnn, 77sss, 78c, 78i, 78j, 78l, 78m, 78n, 78o, 78u-5, 78w, 
78ll(d), 78mm, 79e, 79n, 79t, 80a-8, 80a-29, 80a-30, 80a-31(c), 80a-
37, 80a-38(a) and 80b-11, unless otherwise noted.
* * * * *
    2. Section 229.101 is amended by revising paragraph (e) to read as 
follows:


Sec. 229.101 (Item 101)  Description of business.

* * * * *
    (e) Available information. Disclose the information in paragraphs 
(e)(1) and (e)(2) of this section in any registration statement you 
file under the Securities Act (15 U.S.C. 77a et seq.), and disclose the 
information in paragraphs (e)(2) and (e)(3) of this section if you are 
an accelerated filer (as defined in Sec. 240.12b-2 of this chapter) 
filing an annual report on Form 10-K (Sec. 249.310 of this chapter).
    (1) Whether you file reports with the Securities and Exchange 
Commission. If you are reporting company, identify the reports and 
other information you file with the SEC.
    (2) That the public may read and copy any materials you file with 
the SEC at the SEC's Public Reference Room at 450 Fifth Street, NW., 
Washington, DC 20549. State that the public may obtain information on 
the operation of the Public Reference Room by calling the SEC at 1-800-
SEC-0330. If you are an electronic filer, state that the SEC maintains 
an Internet site that contains reports, proxy and information 
statements, and other information regarding issuers that file 
electronically with the SEC and state the address of that site (http://www.sec.gov). You are encouraged to give your Internet address, if 
available, except that if you are an accelerated filer filing an annual 
report on Form 10-K, you must disclose your Internet address, if you 
have one.
    (3)(i)Whether you make available free of charge on your Internet 
website, if you have one, your annual report on Form 10-K, quarterly 
reports on Form 10-Q (Sec. 249.308a of this chapter), current reports 
on Form 8-K (Sec. 249.308 of this chapter), and amendments to those 
reports filed or furnished pursuant to Section 13(a) or 15(d) of the 
Exchange Act (15 U.S.C. 78m(a) or 78o(d)) as soon as reasonably 
practicable after, and in any event on the same day as, you 
electronically file such material with, or furnish it to, the SEC;
    (ii) If you do not make your filings available in this manner, the 
reasons why you do not do so (including, where applicable, that you do 
not have an Internet website);
    (iii) If you do not make your filings available in this manner, one 
or more locations where the public can access

[[Page 19911]]

these filings electronically immediately upon filing, if any, and 
whether there is a fee for such access; and
    (iv) Whether you voluntarily will provide electronic or paper 
copies of your filings free of charge upon request.
* * * * *

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

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

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 
78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 
78w, 78x, 78ll, 78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-
3, 80b-4 and 80b-11, unless otherwise noted.
* * * * *
    4. Section 240.12b-2 is amended by adding the definition of 
``Accelerated filer'' before the definition of ``Affiliate'' to read as 
follows:


Sec. 240.12b-2  Definitions.

* * * * *
    Accelerated filer. (1)The term ``accelerated filer'' means an 
issuer filing a report pursuant to Sections 12, 13 or 15(d) of the Act 
(15 U.S.C. 78l, 78m or 78o(d)) after it first meets the following 
conditions:
    (i) The aggregate market value of the voting and non-voting common 
equity held by non-affiliates of the issuer is $75 million or more;
    (ii) The issuer has been subject to the requirements of Section 
13(a) or 15(d) of the Act for a period of at least twelve calendar 
months preceding the filing of the report; and
    (iii) The issuer has filed at least one annual report pursuant to 
Section 13(a) or 15(d) of the Act.

    Note to paragraph (1): The aggregate market value of the 
issuer's outstanding voting and non-voting common equity shall be 
computed by use of the price at which the common equity was last 
sold, or the average of the bid and asked prices of such common 
equity, in the principal market for such common equity, as of a date 
no more than 60 and no less than 30 days before the last day of the 
issuer's most recently completed fiscal year.

    (2) Once an issuer becomes an accelerated filer, it will remain an 
accelerated filer unless the issuer becomes eligible to use Forms 10-
KSB and 10-QSB (Sec. 249.310b and Sec. 249.308b) for its annual and 
quarterly reports. In that case, the issuer will not become an 
accelerated filer again unless it subsequently:
    (i) Becomes ineligible to use Forms 10-KSB and 10-QSB 
(Sec. 249.310b and Sec. 249.308b) for its annual and quarterly reports; 
and
    (ii) Meets the conditions in paragraph (1) of this definition.
* * * * *
    5. Section 240.13a-10 is amended by:
    a. Removing the phrase ``90 days'' and adding, in its place, the 
phrase ``the number of days specified in paragraph (j) of this 
section'' in the first sentence of paragraph (b) and the second 
sentence of paragraph (f);
    b. Removing the phrase ``45 days'' and adding, in its place, the 
phrase ``the number of days specified in paragraph (j) of this 
section'' in the first sentence of paragraph (c), the second sentence 
of paragraph (e)(2), and the third sentence of paragraph (f); and
    c. Adding paragraph (j) before the Note to read as follows:


Sec. 240.13a-10  Transition reports.

* * * * *
    (j)(1)For transition reports to be filed on the form appropriate 
for annual reports of the issuer, the number of days shall be 60 days 
for accelerated filers (as defined in Sec. 240.12b-2) filing on Form 
10-K (Sec. 249.310 of this chapter) and 90 days for all other issuers; 
and
    (2) For transition reports to be filed on Form 10-Q or Form 10-QSB 
(Sec. 249.308a or Sec. 249.308b of this chapter), the number of days 
shall be 30 days for accelerated filers filing on Form 10-Q and 45 days 
for all other issuers.
* * * * *
    6. Section 240.15d-10 is amended by:
    a. Removing the phrase ``90 days'' and adding, in its place, the 
phrase ``the number of days specified in paragraph (j) of this 
section'' in the first sentence of paragraph (b) and the second 
sentence of paragraph (f);
    b. Removing the phrase ``45 days'' and adding, in its place, the 
phrase ``the number of days specified in paragraph (j) of this 
section'' in the first sentence of paragraph (c), the second sentence 
of paragraph (e)(2), and the third sentence of paragraph (f); and
    c. Adding paragraph (j) before the Note to read as follows:


Sec. 240.15d-10  Transition reports.

* * * * *
    (j)(1) For transition reports to be filed on the form appropriate 
for annual reports of the issuer, the number of days shall be 60 days 
for accelerated filers (as defined in Sec. 240.12b-2) filing on Form 
10-K (Sec. 249.310 of this chapter) and 90 days for all other issuers; 
and
    (2) For transition reports to be filed on Form 10-Q or Form 10-QSB 
(Sec. 249.308a or Sec. 249.308b of this chapter), the number of days 
shall be 30 days for accelerated filers filing on Form 10-Q and 45 days 
for all other issuers.
* * * * *

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

    7. The authority citation for Part 249 continues to read, in part, 
as follows:

    Authority: 15 U.S.C. 78a, et seq., unless otherwise noted.
* * * * *
    8. Section 249.308a is revised to read as follows:


Sec. 249.308a  Form 10-Q, for quarterly and transition reports under 
sections 13 or 15(d) of the Securities Exchange Act of 1934.

    (a) Form 10-Q shall be used for quarterly reports under Section 13 
or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 
78o(d)), required to be filed pursuant to Sec. 240.13a-13 or 
Sec. 240.15d-13 of this chapter. A quarterly report on this form 
pursuant to Sec. 240.13a-13 or Sec. 240.15d-13 of this chapter shall be 
filed within the following period after the end of the first three 
fiscal quarters of each fiscal year, but no quarterly report need be 
filed for the fourth quarter of any fiscal year:
    (1) 30 days after the end of the fiscal quarter for accelerated 
filers (as defined in Sec. 240.12b-2 of this chapter); or
    (2) 45 days after the end of the fiscal quarter for all other 
registrants.
    (b) Form 10-Q also shall be used for transition and quarterly 
reports filed pursuant to Sec. 240.13a-10 or Sec. 240.15d-10 of this 
chapter. Such transition or quarterly reports shall be filed in 
accordance with the requirements set forth in Sec. 240.13a-10 or 
Sec. 240.15d-10 of this chapter applicable when the registrant changes 
its fiscal year end.
    9. Form 10-Q (referenced in Sec. 249.308a) is amended by revising 
General Instruction A.1. to read as follows:

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

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

GENERAL INSTRUCTIONS

    A. Rule as to Use of Form 10-Q.
    1. Form 10-Q shall be used for quarterly reports under Section 
13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 
78o(d)), filed pursuant to Rule 13a-13 (Sec. 240.13a-13 of this 
chapter) or Rule 15d-13 (Sec. 240.15d-13 of this chapter). A 
quarterly report on this form pursuant to Rule 13a-13 or Rule 15d-13 
shall be filed within the following period after the end of

[[Page 19912]]

each of the first three fiscal quarters of each fiscal year, but no 
report need be filed for the fourth quarter of any fiscal year:
    a. 30 days after the end of the fiscal quarter for accelerated 
filers (as defined in Sec. 240.12b-2 of this chapter); or
    b. 45 days after the end of the fiscal quarter for all other 
issuers.
* * * * *
    10. Section 249.310 is revised to read as follows:


Sec. 249.310  Form 10-K, for annual and transition reports pursuant to 
Sections 13 or 15(d) of the Securities Exchange Act of 1934.

    (a) This form shall be used for annual reports pursuant to Sections 
13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 
78o(d)) for which no other form is prescribed. This form also shall be 
used for transition reports filed pursuant to Section 13 or 15(d) of 
the Securities Exchange Act of 1934.
    (b) Annual reports on this form shall be filed within the following 
period:
    (1) 60 days after the end of the fiscal year covered by the report 
for accelerated filers (as defined in Sec. 240.12b-2 of this chapter); 
or
    (2) 90 days after the end of the fiscal year covered by the report 
for all other registrants.
    (c) Transition reports on this form shall be filed in accordance 
with the requirements set forth in Sec. 240.13a-10 or Sec. 240.15d-10 
of this chapter applicable when the registrant changes its fiscal year 
end.
    (d) Notwithstanding paragraphs (b) and (c) of this section, all 
schedules required by Article 12 of Regulation S-X (Secs. 210.12-01--
210.12-29 of this chapter) may, at the option of the registrant, be 
filed as an amendment to the report not later than the following 
periods:
    (1) In the case of an annual report, not later than:
    (i) 90 days after the end of the fiscal year covered by the report 
for accelerated filers (as defined in Sec. 240.12b-2 of this chapter); 
or
    (ii) 120 days after the end of the fiscal year covered by the 
report for all other registrants; and
    (2) In the case of a transition report, not later than 30 days 
after the due date of the report.
    11. Form 10-K (referenced in Sec. 249.310) is amended by revising 
General Instruction A. and the paragraph before the ``Note'' on the 
cover page to read as follows:

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

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

* * * * *

GENERAL INSTRUCTIONS

    A. Rule as to Use of Form 10-K.
    (1) This Form shall be used for annual reports pursuant to 
Section 13 or 15(d) of the Securities Exchange Act of 1934 (15 
U.S.C. 78m or 78o(d)) (the ``Act'') for which no other form is 
prescribed. This Form also shall be used for transition reports 
filed pursuant to Section 13 or 15(d) of the Act.
    (2) Annual reports on this Form shall be filed within the 
following period:
    (a) 60 days after the end of the fiscal year covered by the 
report for accelerated filers (as defined in Sec. 240.12b-2 of this 
chapter); or
    (b) 90 days after the end of the fiscal year covered by the 
report for all other registrants.
    (3) Transition reports on this Form shall be filed in accordance 
with the requirements set forth in Sec. 240.13a-10 or Sec. 240.15d-
10 of this chapter applicable when the registrant changes its fiscal 
year end.
    (4) Notwithstanding paragraphs (2) and (3) of this General 
Instruction A., all schedules required by Article 12 of Regulation 
S-X (Secs. 210.12-01--210.12-29 of this chapter) may, at the option 
of the registrant, be filed as an amendment to the report not later 
than the following periods:
    (a) In the case of an annual report, not later than:
    (i) 90 days after the end of the fiscal year covered by the 
report for accelerated filers (as defined in Sec. 240.12b-2 of this 
chapter); or
    (ii) 120 days after the end of the fiscal year covered by the 
report for all other registrants; and
    (b) In the case of a transition report, not later than 30 days 
after the due date of the report.
* * * * *

FORM 10-K

* * * * *
    If the registrant is an accelerated filer, state the aggregate 
market value of the voting and non-voting common equity held by non-
affiliates computed by reference to the price at which the common 
equity was last sold, or the average bid and asked price of such 
common equity, as of a specified date no more than 60 and no less 
than 30 days before the end of the registrant's most recently 
completed fiscal year. If the registrant is not an accelerated filer 
(as defined in Rule 12b-2 of the Act), state the aggregate market 
value of the voting and non-voting common equity held by non-
affiliates used to determine whether the registrant was an 
accelerated filer and specify the date used for purposes of this 
computation.

    Note. * * *

* * * * *

    By the Commission.

    Dated: April 12, 2002.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-9454 Filed 4-22-02; 8:45 am]
BILLING CODE 8010-01-P