[Federal Register Volume 67, Number 249 (Friday, December 27, 2002)]
[Proposed Rules]
[Pages 79466-79477]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32731]



[[Page 79465]]

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Part VII





Securities and Exchange Commission





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17 CFR Parts 230, et al.



Mandated Electronic Filing and Web Site Posting for Forms 3, 4, and 5; 
Proposed Rule

  Federal Register / Vol. 67, No. 249 / Friday, December 27, 2002 / 
Proposed Rules  

[[Page 79466]]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 230, 232, 239, 240, 249, 250, 259, 260, 269 and 274

[Release Nos. 33-8170, 34-47069, 35-27627, IC-25872; File No. S7-52-02]
RIN 3235-AI26


Mandated Electronic Filing and Web Site Posting for Forms 3, 4 
and 5

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

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SUMMARY: We are proposing rule and form amendments to mandate the 
electronic filing, and website posting by issuers with corporate 
websites, of beneficial ownership reports filed by officers, directors 
and principal security holders under Section 16(a) of the Securities 
Exchange Act of 1934, generally as required by Section 403 of the 
Sarbanes-Oxley Act of 2002. We intend to adopt the amendments to 
implement the statutory changes as soon as reasonably practicable 
before the July 30, 2003 date mandated by the statute. We are also 
implementing changes to the EDGAR system in order to facilitate 
electronic filing. In addition, we are proposing rule changes to 
eliminate magnetic cartridges as a means of electronic filing. The 
intended general effect of the proposals is to facilitate compliance 
with the will of Congress, as reflected in amended Section 16(a), and 
to facilitate the more efficient transmission, dissemination, analysis, 
storage and retrieval of insider ownership and transaction information 
in a manner that will benefit investors, filers and the Commission.

DATES: Please submit your comments on or before February 10, 2003.

ADDRESSES: To help us process and review your comments more 
efficiently, please send your comments by one method only.
    Please submit three copies of your comments to Jonathan G. Katz, 
Secretary, U.S. Securities and Exchange Commission, 450 Fifth Street, 
NW., Washington, DC 20549-0609. You also may submit your comments 
electronically at the following e-mail address: [email protected]. 
Please have your comment letter refer to File No. S7-52-02 and include 
this file number in the subject line if you use e-mail. We will make 
comment letters available for public inspection and copying in our 
Public Reference Room, 450 Fifth Street, NW., Washington, DC 20549-
0102. We will post electronically submitted comments on our 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. 
Submit only information that you wish to make publicly available.

FOR FURTHER INFORMATION CONTACT: Mark W. Green, Senior Special Counsel 
(Regulatory Policy), at (202) 942-1940, or Anne M. Krauskopf, Special 
Counsel, at (202) 942-2900, Division of Corporation Finance, U.S. 
Securities and Exchange Commission, 450 Fifth Street, NW., Washington, 
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DC 20459-0301.

SUPPLEMENTARY INFORMATION: We propose to amend Rule 101 \2\ under 
Regulation S-T \3\ and Rule 16a-3(h) \4\ and Forms 3, 4 and 5 \5\ under 
the Securities Exchange Act of 1934 (``Exchange Act'').\6\ We also 
propose to add new Rule 16a-3(k) under the Exchange Act. Finally, we 
propose to rescind Form ET \7\ and amend Rule 12 of Regulation S-T,\8\ 
Rule 110 \9\ under the Securities Act of 1933 (``Securities Act''),\10\ 
Rule 0-2 \11\ under the Exchange Act, Rule 21 \12\ under the Public 
Utility Holding Company Act of 1935 (``Public Utility Act'') \13\ and 
Rule 0-5 \14\ under the Trust Indenture Act of 1939 (``Trust Indenture 
Act'').\15\
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    \2\ 17 CFR 232.101.
    \3\ 17 CFR 232.10 et seq.
    \4\ 17 CFR 240.16a-3(h).
    \5\ 17 CFR 249.103, 249.104 and 249.105. Forms 3 and 4 also are 
authorized under the Investment Company Act of 1940 [15 U.S.C. 80a-1 
et seq.] under 17 CFR 274.202 and 274.203.
    \6\ 15 U.S.C. 78 et seq.
    \7\ 17 CFR 239.62, 249.445, 259.601, 269.6 and 274.401.
    \8\ 17 CFR 232.12.
    \9\ 17 CFR 230.110.
    \10\ 15 U.S.C. 77a et seq.
    \11\ 17 CFR 240.0-2.
    \12\ 17 CFR 250.21.
    \13\ 15 U.S.C. 79a et seq.
    \14\ 17 CFR 260.0-5.
    \15\ 15 U.S.C. 77aaa et seq.
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I. Background

    Section 16 \16\ applies to every person who is the beneficial owner 
of more than 10% of any class of equity security registered under 
Section 12 of the Exchange Act \17\ and each officer and director 
(collectively, ``reporting persons'' or ``insiders'') of the issuer of 
the security. Upon becoming a reporting person, or upon the Section 12 
registration of that class of securities, Section 16(a) \18\ requires a 
reporting person to file an initial report \19\ with the Commission 
disclosing the amount of his or her beneficial ownership of all equity 
securities of the issuer.\20\ To keep this information current, Section 
16(a) also requires reporting persons to report to the Commission \21\ 
changes in this ownership, or the purchase or sale of a security-based 
swap agreement \22\ involving these equity securities.\23\
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    \16\ 15 U.S.C. 78p.
    \17\ 15 U.S.C. 78l.
    \18\ 15 U.S.C. 78p(a).
    \19\ Insiders file initial reports on Form 3.
    \20\ Rule 3a12-3 [17 CFR 240.3a12-3] provides that securities 
registered by a foreign private issuer, as defined in Rule 3b-4 [17 
CFR 240.3b-4], are exempt from Section 16. The legislative and 
regulatory actions addressed in this release do not change this 
exemption.
    \21\ Section 16(a) also requires reporting persons to file their 
initial and transactional reports with each national securities 
exchange on which the issuer lists its equity securities. For 
classes of securities listed on the New York Stock Exchange, the 
American Stock Exchange and the Chicago Stock Exchange, filing 
Section 16(a) reports on EDGAR satisfies the requirements of Section 
16(a)(1) (as amended) and Rule 16a-3(c) to file the reports with the 
exchange on which the securities are listed. See staff no-action 
letters to New York Stock Exchange (Jul. 22, 1998), American Stock 
Exchange (Jul. 22, 1998) and Chicago Stock Exchange (Jan. 18, 1998).
    \22\ As defined in Section 206B of the Gramm-Leach-Bliley 
Financial Modernization Act of 1999, as amended by H.R. 4577, Pub. 
L. 106-554, 114 Stat. 2763.
    \23\ Insiders file transaction reports on Forms 4 and 5.
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    Before the enactment of the Sarbanes-Oxley Act of 2002 (the 
``Sarbanes-Oxley Act''),\24\ Section 16(a) required insiders to file 
reports of these transactions within 10 days after the close of each 
calendar month in which the change in ownership or purchase or sale of 
a security-based swap agreement occurred. The Sarbanes-Oxley Act 
amended Section 16(a), effective for transactions on or after August 
29, 2002, to require insiders to file reports of these transactions 
``before the end of the second business day following the day on which 
the subject transaction has been executed, or at such other time as the 
Commission shall establish, by rule, in any case in which the 
Commission determines that such 2-day period is not feasible.'' \25\ On 
August 27, 2002, we adopted rule and form amendments to

[[Page 79467]]

implement the accelerated filing deadline.\26\
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    \24\ Pub. L. 107-204, 116 Stat. 745.
    \25\ Section 16(a)(2)(C) (15 U.S.C. 78p(a)(2)(C)), as amended by 
Section 403 of the Act. Section 30(h) of the Investment Company Act 
of 1940 (15 U.S.C. 80a-29(h)) provides that ``Every person who is 
directly or indirectly the beneficial owner of more than 10 per 
centum of any class of outstanding securities (other than short-term 
paper) of which a registered closed-end company is the issuer or who 
is an officer, director, member of an advisory board, investment 
adviser, or affiliated person of an investment adviser of such a 
company shall in respect of his transactions in any securities of 
such company (other than short-term paper) be subject to the same 
duties and liabilities as those imposed by section 16 of the 
Securities Exchange Act of 1934 upon certain beneficial owners, 
directors, and officers in respect of their transactions in certain 
equity securities.'' Accordingly, the Sarbanes-Oxley Act's 
amendments also accelerate the deadline for change of beneficial 
ownership reports required under Section 30(h).
    \26\ Release No. 34-46421 (September 3, 2002) [56 FR 56462].
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    The Sarbanes-Oxley Act also amended Section 16(a) to require, not 
later than July 30, 2003, insiders to file electronically, and the 
Commission and issuers with corporate websites to post on their 
websites, change in beneficial ownership reports.\27\ Today we propose 
rule and form amendments to implement the electronic filing and website 
posting requirements and make related changes.
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    \27\ Section 16(a)(4), as amended by Section 403 of the 
Sarbanes-Oxley Act.
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    Currently, insiders may file reports on Forms 3, 4 and 5 in paper 
or electronically on the Commission's Electronic Data Gathering, 
Analysis and Retrieval System (``EDGAR'').\28\ We initially launched 
EDGAR as a pilot program in 1984, which enabled companies to 
participate voluntarily in the EDGAR system until 1993. At that time, 
we adopted rules, primarily Regulation S-T,\29\ to implement the 
operational phase of EDGAR, which imposed electronic filing 
requirements only on domestic issuers.\30\ Initially, the rules 
prohibited electronic filing of Forms 3, 4 and 5. The adopting release, 
however, stated that the Commission expected to address later the 
electronic filing of these forms.
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    \28\ Rule 101(b)(4) of Regulation S-T [17 CFR 232.101(b)(4)]. 
The percentage of Forms 3, 4 and 5 filed electronically on the 
current EDGAR system increased from approximately 8% in June 2002 
(the last month before the Sarbanes-Oxley Act was enacted) to 
approximately 15% in August 2002 (the month the accelerated filing 
deadline took effect). The percentage held at approximately 15% in 
September 2002 but increased to approximately 25% in October 2002 
and remained at that level in November 2002.
    \29\ Release No. 33-6977 (February 23, 1993) [58 FR 14628].
    \30\ In 2002, we adopted rules generally requiring foreign 
issuers to file electronically beginning in early November, 2002. 
Release No. 33-8099 (May 14, 2002).
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    Since the adoption of mandated EDGAR for domestic issuers, we have 
been moving toward requiring electronic filing of Forms 3, 4 and 5. In 
1995, we revised Regulation S-T to permit voluntary electronic filing 
of Forms 3, 4 and 5.\31\ In 1996, we asked for comment on whether to 
require EDGAR filing of any documents then allowed to be filed 
electronically on a voluntary basis.\32\ Early in 2000, we announced 
that we intended to propose mandated electronic filing of Forms 3, 4 
and 5 and asked for comments.\33\ Later in 2000, we reiterated our 
expectation of proposing these requirements and stated that we would 
consider the comments received in connection with future 
rulemaking.\34\
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    \31\ Release No. 33-7241 (November 13, 1995) [60 FR 57682].
    \32\ Release No. 33-7369 (Dec. 5, 1996) [61 FR 65440]. Only one 
commenter, an organization consisting of issuers, clearly responded 
as to Forms 3, 4, and 5. This commenter favored permitting the 
voluntary EDGAR filing of these forms and opposed their mandated 
EDGAR filing. The commenter claimed as reasons unnecessary 
additional hardship on insiders, disparate treatment between foreign 
insiders who would be required to file on EDGAR and foreign issuers 
who would not, the burden faced by insiders' companies who would be 
forced by the new mandate to file for their insiders, the 
Commission's uncertain capacity to process all the forms at peak 
time, and the lack of a compelling public interest in somewhat 
accelerating the dissemination of information that often is somewhat 
stale even if filed timely. As discussed below, technological 
advances and a user-friendly approach should minimize hardship on 
insiders. As noted above, rules recently took effect generally 
mandating foreign issuer EDGAR filing. The Commission plans to have 
the capacity to process all the forms at peak time. In addition to 
the Act's mandate, there is now a strong public interest in 
facilitating electronic access to the forms whose filing has been 
accelerated due to the new two-business day filing requirements 
described above.
    \33\ Release No. 33-7803 (Feb. 25, 2000) [65 FR 11507]. We 
received four comment letters on our anticipated EDGAR rulemaking 
for Forms 3, 4 and 5. Three commenters favored mandating EDGAR 
filing for all these forms. Reasons given for mandating included 
ease of filing using a template and ease of access to the underlying 
information. The commenter that provided its views on Release No. 
33-7369, as described in the note above, favored permitting the 
voluntary EDGAR filing of the forms and opposed their mandated EDGAR 
filing. This commenter cited essentially the same reasons it raised 
in its prior comment letter.
    \34\ Release No. 33-7855 (Apr. 27, 2000) [65 FR 24788]. We 
generally have addressed the electronic filing of Form 144 [17 CFR 
239.144] in the same releases as we have addressed the electronic 
filing of Forms 3, 4 and 5. Although the current proposals do not 
address Form 144, we may in the future propose to require that form 
to be filed electronically.
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    In implementing Congress' directive to require Forms 3, 4 and 5 to 
be filed on EDGAR, we seek to achieve the same benefits for investors, 
filers and the Commission that we sought when we first mandated 
electronic filing for most documents. Since its inception, the primary 
goals of our EDGAR system have been to facilitate the rapid 
dissemination of financial and business information about companies and 
other parties participating in U.S. capital markets while making the 
transmission and the Commission's processing of filings more efficient.
    Mandated electronic filing benefits members of the investing public 
and the financial community by making information contained in 
Commission filings available to them minutes after receipt by the 
Commission. Information concerning insiders' transactions in issuer 
equity securities will be publicly accessible substantially sooner than 
it was before. In addition, the electronic format of the information 
facilitates research and data analysis. The new accelerated Section 
16(a) filing requirement described above makes electronic filing even 
more valuable. Finally, investors clearly want electronic access to 
these forms.\35\ Many investors believe that reports of directors' and 
executive officers' transactions in company equity securities provide 
useful information as to management's views of the performance or 
prospects of the company and that more timely and transparent access to 
reports will be even more useful.
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    \35\ A number of commenters on Release No. 33-8090 (Apr. 12, 
2002) [67 FR 19914] (the ``Form 8-K Proposing Release'') regarding 
Form 8-K disclosure of management transactions as well as commenters 
on accelerated Section 16 filing addressed electronic filing of 
Section 16(a) reports. Many of the commenters supported mandated 
Section 16(a) report filing.
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    Filers will benefit from changes to the electronic filing system 
specifically designed to make electronic filing easier while continuing 
to provide speedy, secure and reliable transmission, as discussed 
below. We note that many companies help their insiders or make the 
insiders' filings for them. We encourage this practice to facilitate 
accurate and timely filing. Our intention, however, is to create a 
system that insiders can use relatively easily themselves, particularly 
as an insider is legally responsible for filing regardless of who 
submits a filing on the insider's behalf.\36\
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    \36\ Cf. In the Matter of Bettina Bancroft, Release No. 34-32033 
(Mar. 23, 1993).
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    The use of EDGAR also will facilitate more efficient storage, 
retrieval and analysis of ownership and transaction information than 
paper filing. Quicker access to ownership and transaction information 
should not only facilitate review of the information but also enhance 
the Commission's ability to study and address issues that relate to 
this information.
    Website posting of Forms 3, 4 and 5 by issuers with corporate 
websites will provide a convenient, rapidly disseminated electronic 
source in addition to EDGAR that is conducive to research and data 
analysis. One of the objectives of the proposal is to encourage the 
availability of this information in a variety of locations so that it 
is broadly accessible.

II. The Proposed Rule Amendments

A. Required Electronic Filing of Forms 3, 4 and 5

    We propose to amend Regulation S-T \37\ to require insiders to file 
Forms 3,

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4 and 5 with us on EDGAR.\38\ As noted above, Rule 101(b)(4) of 
Regulation S-T currently permits reporting persons to file Forms 3, 4 
and 5 on EDGAR. The proposed amendments would revise Rule 101 by:
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    \37\ Regulation S-T is the general regulation governing EDGAR 
filing. In addition to complying with Regulation S-T, filers must 
submit electronic documents in accordance with the instructions in 
the EDGAR Filer Manual.
    \38\ Regulation S-T also requires the electronic filing of any 
related correspondence and supplemental information pertaining to a 
document that is the subject of mandated EDGAR. Regulation S-T Rule 
101(a)(1) [17 CFR 232.101(a)(1)]]. These materials are not 
disseminated publicly but are available to the Commission staff. 
This requirement would apply to persons who file Forms 3, 4 and 5 
upon adoption of the proposed amendments.
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    [sbull] Removing subparagraph (4) from subparagraph (b) (the 
voluntary EDGAR filing paragraph); and
    [sbull] Adding a reference to forms filed under Section 16(a) to 
subparagraph (a)(1)(iii) (located in the mandated EDGAR filing 
paragraph).

B. Required Website Posting of Forms 3, 4 and 5

    We propose to amend Rule 16a-3\39\ to add a new paragraph (k) to 
require an issuer that maintains a corporate website to post on its 
website all Forms 3, 4 and 5 filed with respect to its equity 
securities by the end of the business day after filing.\40\ An issuer 
could satisfy this requirement whether it provides access directly or 
by hyperlinking \41\ to them via a third-party service \42\ in lieu of 
maintaining the forms itself if the following conditions were met:
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    \39\ 17 CFR 240.16a-3.
    \40\ Rule 16a-3(e) [17 CFR 240.16a-3(e)] requires insiders to 
send or deliver a copy of each form to the issuer not later than 
when the form is transmitted for filing with the Commission. This 
copy must go to the person designated to receive such 
communications, or in the absence of this designation, to the 
issuer's corporate secretary or person performing equivalent 
functions. Issuers will most likely want to designate a manner of 
receiving these communications electronically.
    \41\ In Release No. 33-7856 (Apr. 28, 2000) [65 FR 25843] (the 
``2000 Release''), we provided interpretive guidance on the possible 
effects of hyperlinking to a third-party website. See the 2000 
Release, at n. 48 and the accompanying text.
    \42\ Hyperlinking via EDGAR would satisfy the posting 
requirement if the conditions in this section otherwise are met. 
EDGAR currently displays Forms 3, 4 and 5 filed electronically and 
will do so under the contemplated on-line system, in both cases 
shortly after filing and within the period required by Section 
16(a)(4)(B) (by the end of the business day after filing).
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    [sbull] The forms are made available in the appropriate time frame;
    [sbull] Access to the reports is free of charge to the user;
    [sbull] The display format allows retrieval of all information in 
the forms; \43\
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    \43\ In this regard, we note that some third-party service 
providers publish only Table I information, which would not satisfy 
this condition. The display format would need to publish all form 
information.
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    [sbull] The medium to access the forms is not so burdensome that 
the intended users cannot effectively access the information provided; 
\44\
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    \44\ See, for example, Release No. 33-7233 (Oct. 6, 1995) [60 FR 
53458], at n. 24 and the accompanying text.
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    [sbull] The access includes any exhibits or attachments;
    [sbull] The forms are accessible for at least a 12-month period;
    [sbull] Access to the forms is through the issuer website address 
the issuer normally uses for disseminating information to investors; 
\45\ and
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    \45\ If the issuer has a corporate website but does not normally 
disseminate information to investors through the website, it must 
provide access to the forms through a location on its website that 
it reasonably believes will facilitate user access to the forms.
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    [sbull] Any hyperlink is directly to the Section 16 forms (or to a 
list of the Section 16 forms) instead of just to the home page or 
general search page of the third-party service.\46\
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    \46\ An issuer could present the viewer with an intermediate 
screen stating that the visitor is leaving the issuer's website. 
Also, a disclaimer of responsibility for the accuracy of the third-
party service would not make the website posting ineffective for 
purposes of the posting requirement. See generally regarding issuer 
website posting Release No. 33-8128 (Sept. 16, 2002) [67 FR 58480], 
at n. 132 and accompanying text.
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    It is our intent to make the website posting requirement become 
effective at the same time as the electronic filing requirement. 
However, we encourage issuers to post Section 16(a) reports on their 
websites before the implementation date.

C. Rule 16a-3(h)

    We propose to delete as no longer necessary the deemed timely filed 
provision in Rule 16a-3(h) under the Exchange Act, effective at the 
same time the Forms 3, 4 and 5 electronic filing requirement becomes 
effective. Rule 16a-3(h) states that the date of filing generally is 
the date of receipt by the Commission. The proposed deletion would not 
affect this statement. However, the rule also has a provision that 
states, in general, that a Form 3, 4 or 5 will be deemed timely filed 
if the filing person establishes that the form was timely delivered to 
a third party entity providing delivery services in the ordinary course 
of business that guaranteed delivery of the filing to the Commission no 
later than the required filing date. This ``deemed timely filed'' 
provision was designed for and applies only to paper filings, and we 
believe it no longer will be needed once the electronic filing 
requirement is effective.\47\
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    \47\ Rule 13(b) under Regulation S-T [17 CFR 232.13(b)] 
addresses instances where an electronic filer attempts in good faith 
to file a document with the Commission in a timely manner but the 
filing is delayed due to technical difficulties beyond the filer's 
control. In those instances, the filer may request an adjustment of 
the document's filing date. We may grant the request if it appears 
that the adjustment is appropriate and consistent with the public 
interest and the protection of investors. A filing date adjustment 
will thus be available in what we expect to be rare appropriate 
circumstances.
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    The proposed amendments would not alter the provisions governing 
the availability of hardship exemptions under Regulation S-T. A filer 
that meets the requirements of Section 201 or 202 of Regulation S-T 
\48\ may obtain a temporary or continuing hardship exemption from EDGAR 
filing requirements.\49\ As is the case with forms currently required 
to be filed on EDGAR, we expect that hardship exemptions for Forms 3, 4 
and 5 will be available infrequently.\50\ A failure to obtain timely an 
identification number or access codes will not justify a hardship 
exemption.\51\ Moreover, as is also the case with forms currently 
required to be filed on EDGAR, upon effectiveness of the rules we 
propose today, our filing desk will not accept in paper format any Form 
3, 4 or 5 unless the filing satisfies the requirements for a temporary 
or continuing hardship exemption under Regulation S-T.\52\
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    \48\ 17 CFR 232.201 or 232.202. An EDGAR filer may obtain a 
temporary hardship exemption if it experiences unanticipated 
technical difficulties that prevent the timely preparation and 
submission of an electronic filing. See 17 CFR 232.201(a). An EDGAR 
filer may apply for a continuing hardship exemption if it cannot 
file all or part of a filing without undue burden or expense. See 17 
CFR 232.202(a).
    \49\ A filer obtains a temporary hardship exemption by filing a 
properly legended paper copy of the filing under cover of Form TH 
under Regulation S-T Rule 201. In contrast to this self-executing 
process, a filer can obtain a continuing hardship exemption only by 
submitting a written application under Regulation S-T Rule 202, upon 
which the Commission staff must then act under delegated authority. 
It is unlikely that a continuing hardship exemption would be granted 
with respect to Forms 3, 4 or 5, given the nature of the information 
that appears in these forms and the expected ease of electronic 
filing.
    \50\ In addition to pursuing a hardship exemption, a filer that 
has in good faith attempted to submit a filing in a timely manner 
but has experienced a delay due to technical conditions beyond its 
control may request a filing date adjustment under Regulation S-T 
Rule 13(b). See n. 47 above.
    \51\ See the note to Rule 10 of Regulation S-T [17 CFR 232.10] 
(``The Commission strongly urges any person or entity about to 
become subject to the disclosure and filing requirements of the 
federal securities laws to submit a Form ID [(through which an 
identification number and access codes are obtained)] well in 
advance of the first required [(electronic)] filing, * * *, in order 
to facilitate electronic filing on a timely basis'').
    \52\ Rule 14 of Regulation S-T [17 CFR 232.14].
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D. Forms 3, 4 and 5

    We propose some minor changes to Forms 3, 4 and 5 to facilitate the 
electronic filing provisions, as follows:
    1. Amend the introductory section before the General Instructions 
of Forms

[[Page 79469]]

3, 4 and 5 to delete the reference to IRS identification numbers. 
Consistent with that deletion, we propose to delete from each of the 
forms Item 3 (before Table I), which provides a space for a filer that 
is an entity, at its option, to include an IRS identification 
number.\53\ We believe this information is unnecessary in this context. 
An IRS identification number is not useful for tracking because only 
some filers provide it. Only non-natural person filers may provide it 
and even they may choose whether to do so.
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    \53\ The following items will be renumbered.
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    2. Amend the General Instructions to Forms 3, 4 and 5 to
    [sbull] Delete the statement that electronic filing is optional; 
\54\
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    \54\ See current General Instruction 3(a) to Form 3, and current 
General Instruction 2(a) to Forms 4 and 5.
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    [sbull] Add a statement making it clear that electronic filing is 
mandatory absent a hardship exemption, referencing Regulation S-T, and 
describing how to obtain staff assistance in electronic filing; \55\ 
and
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    \55\ See proposed General Instruction 3(a) to Form 3 and 
proposed General Instruction 2(a) to Forms 4 and 5.
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    [sbull] Add a note providing instructions for filing in paper 
pursuant to a hardship exemption.\56\
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    \56\ See proposed note to General Instruction 3 and General 
Instruction 2, respectively.
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    3. Amend Instruction 6 to Forms 3, 4, and 5 to indicate that if a 
filer runs out of space on the electronic form, the filer should put 
the additional information in a footnote, and if there is not enough 
room in the space provided for a footnote, the footnote should refer to 
an exhibit to the form that contains the additional information.\57\
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    \57\ Ownership and transaction information must be disclosed to 
the greatest extent possible in the forms' Tables I and II rather 
than in footnotes and attachments in order to maximize the value of 
EDGAR's tagging the data in the tables, and thus facilitate 
analysis.
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    4. Amend Items 4 and 5 of the items before Table I of Form 5 to 
require that, when addressing the date as to which the form is filed, a 
day be specified in addition to, as currently required, a month and 
year. Adding a day requirement will result in a full date that will 
ease processing and searches.
    5. Amend the heading of column 9 of Table II of Form 5 to clarify 
that the reference to ``year'' is a reference to the issuer's fiscal 
year, which will make the heading consistent with the heading of column 
5 of Table I of Form 5.

E. Form ET

    Currently, electronic filers may make electronic submissions either 
as direct transmissions, via dial-up modem or Internet, or on magnetic 
cartridge.\58\ However, the number of filers using magnetic cartridges 
is minimal. In the current calendar year, one filer has filed one 
magnetic cartridge containing a single form. The filer apparently used 
the magnetic cartridge approach solely to avoid a temporary problem 
with direct transmission. Therefore, we propose to eliminate magnetic 
cartridges as a transmission medium and to eliminate Form ET,\59\ the 
transmittal form that must accompany all magnetic cartridge 
submissions.\60\
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    \58\ See Rules 12(b) and 12(c) of Regulation S-T [17 CFR 
232.12(b) and 232.12(c)].
    \59\ 17 CFR 239.62, 249.445, 259.601, 269.6 and 274.401.
    \60\ See proposed related amendments to Securities Act Rule 110 
[17 CFR 230.110], Rule 12 of Regulation S-T [17 CFR 232.12 and 
232.103], Exchange Act Rule 0-2 [17b CFR 240.0-2], Public Utility 
Act Rule 21 [17 CFR 250.21], and Trust Indenture Act Rule 0-5 [17 
CFR 260.0-5].
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F. Comment Solicited

    We request comment on the rule and form changes we propose in this 
release.
    Question regarding facilitating statutory requirements in general:
    [sbull] Would any other technical amendments help to implement 
Exchange Act Section 16(a)(4)?
    Questions regarding electronic filing of Section 16 forms:
    [sbull] Are there ways we can help introduce new electronic filers 
to the system?
    [sbull] Are there any barriers to issuers' helping insiders to file 
or filing on insiders' behalf Section 16 forms and, if so, how can 
these barriers be eliminated or reduced?
    Questions regarding website posting:
    [sbull] In addition to proposed Rule 16a-3(k), are any rules needed 
to facilitate the statutory requirement that an issuer maintaining a 
corporate website post all filings of Forms 4 and 5 reporting 
transactions in its equity securities on that website by the end of the 
business day after the filing?
    [sbull] Should we permit issuers that maintain corporate websites 
not to post Forms 3 or to post them later than the end of the business 
day after filing? If delayed posting of Forms 3 is appropriate, how 
great a delay should be permitted? Is posting Forms 3 necessary to 
provide a complete picture?
    [sbull] Should issuers whose equity securities are subject to 
Section 16 but do not have a corporate website be required to disclose 
in their Forms 10-K or 10-KSB \61\ why they are not subject to the 
posting requirement?
---------------------------------------------------------------------------

    \61\ 17 CFR 249.310 and 249.310b.
---------------------------------------------------------------------------

    [sbull] Are there more conditions we should require if an issuer 
hyperlinks to a third-party site to satisfy its posting requirement? 
Are any of the conditions we would require not necessary? Are there any 
forms of hyperlinking that would not foster widespread dissemination 
and access?
    [sbull] Should we condition satisfaction of the posting requirement 
on keeping the forms accessible for a period other than 12 months? The 
12-month period would provide time to assess a group of transactions, 
including a purchase and sale or sale and purchase within six months of 
each other (``short-swing transactions'') that may raise issues under 
Section 16(b).\62\ A shorter period, however, also could help to 
identify short-swing transactions. Should the period be longer to 
better fulfill the informational purposes of Section 16(a) or to 
accommodate the statute of limitations? Should the period be shorter 
because the information is available on the EDGAR database?
---------------------------------------------------------------------------

    \62\ 15 U.S.C. 78p(b). In Release No. 33-8128 (Sept. 16, 2002) 
[67 FR 58480], in the context of discussing Form 10-K disclosure of 
issuer website posting of periodic reports, we suggested that 
issuers provide website access to their reports for at least a 12-
month period.
---------------------------------------------------------------------------

    [sbull] We invite commenters considering the website posting issue 
to address the relative costs and benefits of each approach.

--For example, would establishing a hyperlink through a third-party 
service allow issuers to comply with the statutory requirement in a 
more timely and cost-efficient way than by maintaining the reports on 
their own website?
--Conversely, would maintaining the reports on the issuer's own website 
be more advantageous to users?
--In this regard, if a form were maintained through a hyperlink, would 
it remain equally portable, so that a user could download it and print 
it out in its original or other readily understood format?
--Should it be adequate to hyperlink to the Section 16 forms as a group 
or a list of them rather than to each form?

    Question regarding the deemed timely filed provision of Rule 16a-
3(h):
    [sbull] Are there any instances in which use of the Rule 16a-3(h) 
deemed timely filed provision would remain appropriate when electronic 
filing is required?
    Since the initial adoption of Regulation S-T in 1993,\63\ filers 
who file in paper under the temporary hardship exemption have been 
required to submit an electronic format copy of the filed paper 
document within six business

[[Page 79470]]

days of the filing of the paper format document.\64\
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    \63\ Release No. 33-6977.
    \64\ Rule 201(b) of Regulation S-T [17 CFR 232.201(b)].
---------------------------------------------------------------------------

    Questions regarding temporary hardship exemptions:
    [sbull] In light of technological developments, decreased costs and 
the benefits of electronic availability, should we require a shorter 
period of as few as two or three business days? If so, should this 
shorter time period apply generally to all required filings, or solely 
to Forms 3, 4 and 5?
    [sbull] Alternatively, given the expected ease of electronic filing 
and the limited utility to investors of paper filings, should we 
eliminate the ability to use the temporary hardship exemption for 
Section 16 filings? If so, should we provide a sunset provision that 
eliminates the ability after a specified time (e.g., six months or a 
year after the electronic filing requirement is effective)?
    Rule 13(a)(3) of Regulation S-T addresses electronic submission 
acceptance. Currently, persons can file by direct electronic 
transmission between the hours of 8 a.m. and 10 p.m., Washington, DC 
time on weekdays that are not federal holidays. An accepted filing that 
begins before 5:30 p.m. Washington, DC time is deemed filed on the same 
day. Generally, an accepted filing that begins after 5:30 p.m. is 
deemed filed on the next business day.\65\ However, a post-effective 
amendment or registration statement filed to increase the number of 
securities registered as permitted by Securities Act Rule 462(b)\66\ is 
deemed filed on the same business day (as long as it is received before 
10 p.m.).\67\ Questions regarding electronic submission acceptance:
---------------------------------------------------------------------------

    \65\ Rule 13(a)(2) of Regulation S-T [17 CFR 232.13(a)(2)].
    \66\ 17 CFR 230.462(b).
    \67\ Rule 13(a)(3) of Regulation S-T [17 CFR 232.13(a)(3)].
---------------------------------------------------------------------------

    [sbull] Should we amend Rule 13(a)(3) to treat an accepted Form 3, 
4 or 5 filing in the same manner as a Rule 462(b) filing for purposes 
of the deemed filing date?
    [sbull] Would this treatment be appropriate due to the rapid filing 
deadline applicable to Section 16 reports and the large proportion of 
insiders who are natural persons?
    [sbull] On the other hand, does the importance of the information 
justify the requirement that these forms be filed by 5:30 p.m. on the 
due date, the same as almost all other Commission filings?
    Question regarding elimination of electronic transmission 
alternative:
    [sbull] Finally, we request comment on whether there is any 
category of filers who would be unduly burdened if we eliminate filers' 
ability to file on magnetic cartridge.

III. The Electronic Filing Procedure

    By the time the provisions that require electronic filing of Forms 
3, 4 and 5 become effective, a new on-line filing system will be 
effective as well.\68\ In its initial version, insiders and those who 
act on their behalf will be able to access our web site to fill out and 
submit the forms. When the new system is implemented, EDGARLink filing 
no longer will be available for these forms.\69\
---------------------------------------------------------------------------

    \68\ Commenters on both accelerated Section 16 filing and the 
Form 8-K Proposing Release encouraged the Commission to develop an 
on-line filing procedure for Section 16(a) reports.
    \69\ Unofficial PDF copies of these forms will not be permitted.
---------------------------------------------------------------------------

    Some filers, either directly or through agents, may wish to create 
a customized form and file it as a reduced content filing. A reduced 
content filing is a filing that provides header information (e.g., form 
type) and the data for mandatory fields that we specify and otherwise 
complies with specified technical filing requirements. We plan to 
announce the mandatory fields and technical filing requirements 
sufficiently before the new system's implementation to provide adequate 
preparation time. Reduced content filings will enable issuers and 
insiders to use third-party service providers for filings, if they wish 
to do so, just as they do today.
    In order to file, persons will need the same codes that are 
required to file on EDGAR today.\70\ Persons only can acquire the codes 
by submitting a Form ID.\71\ Companies and other third party filing 
agents with the appropriate access codes will continue to be able to 
submit forms on behalf of insiders. We expect to introduce enhanced 
verification procedures in the future.
---------------------------------------------------------------------------

    \70\ If a filing is made on behalf of multiple insiders, each 
insider will be required to have a Central Index Key (CIK) and CIK 
Confirmation Code (CCC) for validation. Multiple insiders will be 
allowed on a single form if they all have an interest in the 
transaction(s) reported.
    \71\ 17 CFR 239.63, 249.446, 259.602, 269.7 and 274.402.
---------------------------------------------------------------------------

    To access and file the forms through our web site, filers must 
begin by having valid EDGAR access codes and logging on to the site. A 
button on the menu will give filers the option to create on-line Forms 
3, 4 or 5, or amendments to these forms. The filer should have all the 
necessary information available before going on-line to file. Due to 
cost and technical limitations, data entry must be performed quickly 
enough to avoid timeouts that end the session. The system will not be 
able to provide a way to save an incomplete form on-line from session 
to session. The system will validate for data type and required fields 
as many fields as possible while the filer fills in the form. Filers 
will have the chance to correct errors and verify the accuracy of the 
information. An on-line help function will be available.
    The filer will be able to download and print the filing and add 
attachments before submission.\72\ Once the filing is submitted, the 
system will display the accession number of the filing or a message 
that says the accession number will follow in a return 
notification.\73\ A filer will be able to obtain a return copy of the 
form shortly after filing, and also will be able to see the filing on 
our website.
---------------------------------------------------------------------------

    \72\ Filers should reference attachments in the form as exhibits 
and number them for clarity. In the rare event that a filer files an 
exhibit alone in paper under a hardship exemption, the filer should 
place a Form SE [17 CFR 239.64, 249.444, 259.603, 269.8 and 274.403] 
cover on the exhibit. Use of Form SE for this purpose will help 
assure the exhibit is linked to the form.
    \73\ An ``accession number'' is a unique number generated by 
EDGAR for each electronic submission. Assignment of an accession 
number does not mean that EDGAR has accepted a submission.
---------------------------------------------------------------------------

IV. General Request for Comments

    We request and encourage any interested person to submit comments 
regarding:
    [sbull] The proposed changes that are the subject of this release;
    [sbull] Additional or different changes; or
    [sbull] Other matters that may have an effect on the proposals 
contained in this release.
    We request comment from the point of view of investors, insiders, 
issuers and others who use or otherwise are involved with electronic 
filing and website posting. With regard to any comments, we note that 
comments are of greatest assistance to our rulemaking initiative if 
accompanied by supporting data and analysis of the issues addressed in 
those comments.

V. Paperwork Reduction Act

    The proposed rule amendments would affect seven forms that contain 
``collection of information'' requirements within the meaning of the 
Paperwork Reduction Act of 1995.\74\ The titles of the affected 
information collections are the EDGAR Forms ID, ET, SE \75\ and TH,\76\ 
and Exchange Act Forms 3, 4 and 5. Consistent with the

[[Page 79471]]

will of Congress, the amendments that affect all of these information 
collections, except for Form ET, generally conform the amended rules 
and forms to the mandated electronic filing requirements provided by 
the amendments to Section 16(a) enacted in Section 403 of the Sarbanes-
Oxley Act.
---------------------------------------------------------------------------

    \74\ 44 U.S.C. 3501 et seq.
    \75\ 17 CFR 239.64.
    \76\ 17 CFR 239.65.
---------------------------------------------------------------------------

    Compliance with the proposed amendments would be mandatory. The 
information required by the proposed amendments would not be kept 
confidential by the Commission except that the information required by 
Form ID would be kept confidential, subject to a request under the 
Freedom of Information Act.\77\
---------------------------------------------------------------------------

    \77\ 5 U.S.C. 552. The Commission's regulations that implement 
the act are at 17 CFR 200.80 et seq.
---------------------------------------------------------------------------

    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 control number. We have submitted the revisions to the 
collections of information to the Office of Management and Budget 
(``OMB'') for review under 44 U.S.C. 3507(d) and 5 CFR 1320.11.
    Form ID (OMB Control Number 3235-0328) is used by registrants, 
individuals, third party filers or their agents to request the 
assignment of access codes that permit the filing of securities 
documents on EDGAR. This form enables the Commission to assign an 
identification number (``CIK''), confirmation code (``CCC''), password 
(``PW'') and password modification authorization code (``PMAC'') to 
each EDGAR filer, each of which is essential to the security of the 
EDGAR system.
    Form ET (OMB Control Number 3235-0329) is used by an EDGAR filer 
when submitting filings on magnetic cartridge. The information provided 
on Form ET is technical information about the magnetic cartridge 
contents as well as information that identifies a contact person who 
can answer questions about the tape cartridge.
    Form SE (OMB Control Number 3235-0327) is used by an EDGAR filer 
when submitting paper format exhibits either under a hardship exemption 
under Regulation S-T Rules 201 and 202 or as otherwise allowed by 
Regulation S-T. The information provided on a Form SE primarily 
identifies each paper format exhibit submitted. A Form SE filer must 
also submit the required number of copies of each paper format exhibit.
    Form TH (OMB Control Number 3235-0425) is used by an EDGAR filer to 
give notice that it claims a temporary hardship exemption under 
Regulation S-T Rule 201. A filer must submit the Form TH along with the 
required number of copies of the paper format securities document. The 
information provided on Form TH enables the Commission to determine 
whether the filer's circumstances justify the grant of a temporary 
hardship exemption.
    Form 3 (OMB Control No. 3235-0104) is used by an insider to 
disclose securities ownership information under Exchange Act Section 
16(a).
    Forms 4 (OMB Control No. 3235-0287) and 5 (OMB Control No. 3235-
0362) are used by insiders to disclose securities transaction 
information under Exchange Act Section 16(a).
    We estimate that approximately 8,000 respondents file Form ID each 
year at an estimated .15 hours per response for a total annual burden 
of 1200 hours.\78\ We expect that, if adopted, the proposed rule 
amendments would cause an additional 216,000 respondents to file a Form 
ID as a result of initially being subject to the mandated filing rules 
and cause an additional 175,200 respondents to file a Form ID each year 
on a recurrent basis. We anticipate these additional entities would 
require 32,400 and 26,280 hours, respectively, in the aggregate to 
complete the Form ID, which would increase the total annual burden 
initially to 33,600 hours and, on a recurrent basis, to 27,480 hours.
---------------------------------------------------------------------------

    \78\ The fact that approximately 25% of the Forms 3, 4 and 5 
filed in November 2002 were filed electronically indicates that some 
insiders already have filed Forms ID.
---------------------------------------------------------------------------

    We estimate that one entity files a Form ET each year at an 
estimated .25 hours per response for a total annual burden of .25 
hours. We expect that the elimination of the Form ET cover sheet for 
magnetic cartridge filings in connection with the elimination of the 
magnetic cartridge transmission alternative will reduce the existing 
information collection requirements that are currently imposed on 
magnetic cartridge filers. We expect the annual burden would be reduced 
by the current annual burden imposed by Form ET. As noted above, we 
estimate this annual burden as .25 hours.
    We estimate that 770 respondents file Form SE each year at an 
estimated .10 hours per response for a total annual burden of 77 hours. 
We expect that, if adopted, the proposed rule amendments would cause an 
additional 12 respondents to file a Form SE. We anticipate these 
additional respondents would require 1.2 hours in the aggregate to 
complete the Form SE, which would increase the total annual burden to 
78.2 hours.
    We estimate that 70 respondents file Form TH each year at an 
estimated .33 hours per response for a total annual burden of 23.1 
hours. We expect that, if adopted, the proposed rule amendments would 
cause an additional 12 respondents to file a Form TH. We anticipate 
these additional respondents would require 4 hours in the aggregate to 
complete the Form TH, which would increase the total annual burden to 
27.1 hours.
    We expect that, if adopted, the proposed amendments would obligate 
reporting persons to disclose on Forms 3, 4 and 5 essentially the same 
information that they are required to disclose today.\79\ We therefore 
believe that the overall information collection burden of these forms 
would remain approximately the same.
---------------------------------------------------------------------------

    \79\ The addition to Form 5 of a requirement to provide the day 
of the month and year disclosed where the month and year already are 
required to be disclosed creates an additional burden that is so 
small it is not quantifiable. The other proposed changes to Forms 3, 
4 and 5 are minor and do not add any collection of information 
burden.
---------------------------------------------------------------------------

    We are soliciting comment on the expected Paperwork Reduction Act 
effects of the proposed rule amendments. In particular, we solicit 
comment on the accuracy of our additional burden hour estimates 
expected to result from the proposed amendments. We further request 
comment on whether the proposed changes to the collection of 
information are necessary for the proper performance of the 
Commission's functions, including whether the additional information 
garnered will have practical utility. In addition, we solicit comment 
on whether there are ways to enhance the quality, utility, and clarity 
of the information to be collected. We further solicit comment on 
whether there are ways to minimize the burden of information collection 
on those insiders who file the above forms, including through the use 
of automated collection techniques or other forms of information 
technology. Finally, we solicit comment on whether the proposed 
amendments will have any effects on any other collection of information 
not previously identified in this section.
    If you would like to submit comments on the collection of 
information requirements and expected effects, please direct them to 
the Office of Management and Budget, Attention: Desk Officer for the 
Securities and Exchange Commission, Office of Information and 
Regulatory Affairs, Washington, DC, 20503. You should also send a copy 
of the comments to Jonathan G. Katz, Secretary, Securities and Exchange 
Commission, 450 Fifth Street, NW., Washington, DC 20549,

[[Page 79472]]

with reference to File No. S7-52-02. Requests for materials submitted 
to OMB by the Commission with regard to these collections of 
information should be in writing, refer to File No. S7-52-02, and be 
submitted to the Securities and Exchange Commission, Records 
Management, Office of Filings and Information Services. OMB must make a 
decision concerning the affected collections of information between 30 
and 60 days after publication of the release. Consequently, in order to 
ensure that your comments achieve their fullest effect, you should 
submit comments to OMB within 30 days of this release's publication.

VI. Cost-Benefit Analysis

    The proposed amendments relating to mandated electronic filing and 
website posting largely represent the implementation of a Congressional 
mandate. We expect that these amendments will achieve the same benefits 
for investors and filers that we sought when we first adopted mandated 
EDGAR rules for most filings.\80\
---------------------------------------------------------------------------

    \80\ The expected benefits and costs to those outside the 
Commission from the proposed amendments relating to eliminating Form 
ET and magnetic cartridge transmission are expected to be de 
minimis. Magnetic cartridge transmission rarely is used.
---------------------------------------------------------------------------

A. Expected Benefits

    The proposed amendments regarding mandated electronic filing and 
website posting should benefit investors and filers.
    Mandated electronic filing should benefit members of the investing 
public and financial community by making information contained in 
Commission filings easily available to them minutes after receipt by 
the Commission and, thereby, make them more likely to access and act 
quickly on the information. The electronic format of the information 
should facilitate research and data analysis. The new accelerated 
Section 16(a) filing requirement described above should make quick 
electronic access even more valuable.
    Filers should benefit from changes to the electronic filing system 
specifically designed to make electronic filing easier while continuing 
to provide speedy, secure and reliable delivery.
    The use of EDGAR also will facilitate more efficient storage, 
retrieval and analysis of ownership and transaction information than 
filing in paper. Quicker access to ownership and transaction 
information should not only facilitate review of the information but 
also enhance the Commission's ability to study and address issues that 
relate to this information.
    Website posting by issuers with corporate websites will provide a 
convenient, rapidly disseminated electronic source in addition to EDGAR 
that is conducive to research and data analysis. In general, website 
posting will help to make ownership and transaction information more 
broadly accessible.

B. Expected Costs

    We expect that the proposed amendments regarding mandated 
electronic filing and website posting will result in some costs to 
insiders and issuers. However, we expect that many insiders and issuers 
will not bear the full range of costs resulting from the adoption of 
these amendments for the reasons described below.
    The expected costs of mandated electronic filing consist of both 
initial and ongoing costs. Initial costs are those associated with 
obtaining, completing and sending to the Commission a Form ID to obtain 
filing credentials, and the purchase of compatible computer equipment 
and software, including EDGAR software if obtained from a third-party 
vendor and not the Commission's website. Initial costs further include 
those associated with learning about the electronic filing system, 
placing the filing data in electronic format for the initial electronic 
filing and subscribing to an Internet service provider. Ongoing costs 
are those associated with maintaining the framework developed through 
the initial costs (for example, updating information required by Form 
ID) and any additional costs arising from each subsequent filing (for 
example, placing the new filing data in electronic format).\81\
---------------------------------------------------------------------------

    \81\ Other minor costs could include, for example, filling out 
and submitting a Form SE (a paper exhibit cover) or, in rare 
instances, a Form TH (a notice of claim of hardship exemption that 
serves as a cover for a paper filing).
---------------------------------------------------------------------------

    We expect that many insiders will need to incur few, if any, 
additional costs from electronic filing. We understand that many 
issuers help their insiders or make the insiders' filings for them. To 
the extent insiders do not receive this help, we believe many already 
will have the computer equipment and Internet access to enable them to 
file using the templates that will appear on the Commission's website. 
Finally, some insiders already have filed Forms ID and gained 
experience in arranging electronic filing.\82\
---------------------------------------------------------------------------

    \82\ As previously noted, approximately 25% of the Forms 3, 4 
and 5 filed in November 2002 were filed electronically.
---------------------------------------------------------------------------

    Even issuers that help their insiders, whether to a greater or 
lesser extent, to file electronically are not likely to incur 
additional costs.\83\ Issuers are required to file on EDGAR and 
generally have the needed computer equipment and Internet service 
provider access to enable them to facilitate filing using the templates 
that will appear on the Commission's website.
---------------------------------------------------------------------------

    \83\ Costs that issuers incur helping insiders are incurred 
voluntarily because the legal obligation to file rests solely on the 
insiders.
---------------------------------------------------------------------------

    Issuers should incur relatively few direct costs from the website 
posting requirement. Because the requirement applies only to issuers 
that already have a corporate website, issuers will not need to incur 
the costs associated with creating or maintaining a website. In 
addition, issuers could limit their additional costs associated with 
posting by hyperlinking to a third-party website such as EDGAR.

C. Comment Solicited

    We solicit comments on the costs and benefits of the proposed 
amendments for insiders. We request your views on the costs and 
benefits described above as well as on any other costs and benefits 
that could result from adoption of mandated electronic filing and 
website posting requirements. We also request data as to what 
percentage of filings are done by or with the help of the issuer.

VII. Effect on Efficiency, Competition and Capital Formation

    Section 23(a)(2) of the Exchange Act \84\ 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. Furthermore, Section 2(b) of the Securities Act 
\85\ and Section 3(f) of the Exchange Act \86\ require 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.
---------------------------------------------------------------------------

    \84\ 15 U.S.C. 78w(a)(2).
    \85\ 15 U.S.C. 77b(b).
    \86\ 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    The proposed amendments regarding mandated electronic filing and 
website posting are intended to facilitate the more efficient 
transmission, dissemination, analysis, storage and

[[Page 79473]]

retrieval of insider ownership and transaction information.\87\ This 
should improve investors' ability to make informed investment and 
voting decisions. Informed investor decisions generally promote market 
efficiency and capital formation. We believe the proposed amendments 
would not impose a burden on competition.
---------------------------------------------------------------------------

    \87\ We believe there would be a de minimis impact from adoption 
of the proposed amendments regarding the elimination of magnetic 
cartridge transmission and Form ET.
---------------------------------------------------------------------------

    We request comment on whether the proposed amendments, if adopted, 
would impose a burden on competition. We also request comment on 
whether the proposed amendments, if adopted, would promote efficiency, 
competition and capital formation. Finally, we request commenters to 
provide empirical data and other factual support for their views if 
possible.

VIII. Initial Regulatory Flexibility Analysis

    This Initial Regulatory Flexibility Analysis has been prepared in 
accordance with 5 U.S.C. 603. It relates to proposed amendments 
regarding mandated electronic filing and website posting of Forms 3, 4 
and 5.\88\
---------------------------------------------------------------------------

    \88\ As previously noted, we believe there would be a de minimis 
impact from adoption of the proposed amendments regarding the 
elimination of magnetic cartridge transmission and Form ET.
---------------------------------------------------------------------------

A. Reasons for the Proposed Action

    An issuer's insiders use Forms 3, 4 and 5 to report beneficial 
ownership of and trading in equity securities of the issuer. Consistent 
with the will of Congress, the proposed mandated electronic filing and 
website posting amendments generally conform the amended rules and 
forms to the mandated electronic filing and website posting 
requirements provided by the amendments to Section 16(a) enacted in 
Section 403 of the Sarbanes-Oxley Act. In addition, we believe the 
proposed amendments will benefit investors, filers and the Commission.

B. Objectives

    Our objectives in proposing the mandated electronic filing and 
website posting amendments are to facilitate compliance with the will 
of Congress as reflected in amended Section 16(a) and to facilitate the 
more efficient transmission, dissemination, analysis, storage and 
retrieval of insider ownership and transaction information in a manner 
that will benefit investors, filers and the Commission.

C. Legal Basis

    We are proposing the mandated electronic filing and website posting 
amendments under the authority set forth in Section 19(a) of the 
Securities Act,\89\ Sections 3(b),\90\ 16, 23(a) \91\ and 35A \92\ of 
the Exchange Act, Section 17(a) \93\ of the Public Utility Act, Section 
319 \94\ of the Trust Indenture Act, Section 30(h) of the Investment 
Company Act of 1940, and Section 3(a) of the Sarbanes-Oxley Act.
---------------------------------------------------------------------------

    \89\ 15 U.S.C. 77s(a).
    \90\ 15 U.S.C. 78c(b).
    \91\ 15 U.S.C. 78w(a).
    \92\ 15 U.S.C. 78ll.
    \93\ 15 U.S.C. 78q(a).
    \94\ 15 U.S.C. 77sss.
---------------------------------------------------------------------------

D. Small Entities Subject to the Proposed Revisions

    The proposed mandated electronic filing and website posting 
amendments would affect small entities that either are insiders that 
are not natural persons or are issuers with a corporate website that 
have a class of equity securities registered under Exchange Act Section 
12. Exchange Act Rule 0-10(a) \95\ defines an entity, other than an 
investment company, to be a ``small business'' or ``small 
organization'' if it had total assets of $5 million or less on the last 
day of its most recent fiscal year. As of September 30, 2002, we 
estimated that there were approximately 8,640 insiders \96\ and fewer 
than 2,500 issuers that have a class of equity securities registered 
under Exchange Act Section 12, other than investment companies, that 
may be considered small entities. The proposed mandated electronic 
filing amendments would apply to all of these insiders. The proposed 
mandated website posting amendments would apply to all of these issuers 
with corporate websites.
---------------------------------------------------------------------------

    \95\ 17 CFR 240.0-10(a).
    \96\ We estimated the number of small entity insiders based on 
our estimates of the total number of insiders; the percentage of 
these insiders that are greater than ten percent holders; the 
percentage of these greater than ten percent holders that are non-
natural persons; and the percentage of these non-natural persons 
that are small entities.
---------------------------------------------------------------------------

E. Reporting, Recordkeeping and Other Compliance Requirements

    Currently, insiders may file Forms 3, 4 and 5 in paper or 
electronically and issuers with corporate websites need not post Forms 
3, 4 and 5 as to their equity securities on their websites. The 
amendments would require insiders to file these forms electronically 
and issuers with corporate websites to post these forms. Because 
insiders already file these forms in paper, the only additional 
professional skills insiders would need would be those required to file 
electronically. Because issuers with corporate websites already have 
websites, we believe these issuers would need no additional 
professional skills to post these forms on their websites. We expect 
that filing electronically and website posting would increase costs 
incurred by some small entities. However, we expect that many small 
entity insiders and small entity issuers will not bear the full range 
of costs resulting from the adoption of these amendments for the 
reasons described below.
    The expected costs of mandated electronic filing consist of both 
initial and ongoing costs. Initial costs are those associated with 
obtaining, completing and sending to the Commission a Form ID to obtain 
filing credentials, and the purchase of compatible computer equipment 
and software, including EDGAR software if obtained from a third-party 
vendor and not the Commission's website. Initial costs further include 
those associated with learning about the electronic filing system, 
placing the filing data in electronic format for the initial electronic 
filing and subscribing to an Internet service provider. Ongoing costs 
are those associated with maintaining the framework developed through 
the initial costs (for example, updating information required by Form 
ID) and any additional costs arising from each subsequent filing (for 
example, placing the new filing data in electronic format).\97\
---------------------------------------------------------------------------

    \97\ Other minor costs could include, for example, filling out 
and submitting a Form SE (a paper exhibit cover) or, in rare 
instances, a Form TH (a notice of claim of hardship exemption that 
serves as a cover for a paper filing).
---------------------------------------------------------------------------

    We expect that many small entity insiders will need to incur few, 
if any, additional costs from electronic filing. Some issuers may help 
their small entity insiders or make the small entity insiders' filings 
for them. To the extent small entity insiders do not receive this help, 
we believe many already will have the computer equipment and Internet 
access to enable them to file using the templates that will appear on 
the Commission's website. Finally, some small entity insiders already 
may have filed Forms ID and gained experience in arranging electronic 
filing.\98\
---------------------------------------------------------------------------

    \98\ Approximately 25% of the Forms 3, 4 and 5 filed in November 
2002 were filed electronically.
---------------------------------------------------------------------------

    Even those small entity issuers that assist their insiders, whether 
to a greater or lesser extent, to file electronically are not likely to 
incur additional costs.\99\ Small entity issuers are required to file 
on EDGAR and generally have the needed computer equipment and Internet 
service provider access to

[[Page 79474]]

enable them to facilitate filing using the templates that will appear 
on the Commission's website.
---------------------------------------------------------------------------

    \99\ Costs that small entity issuers incur helping insiders are 
incurred voluntarily because the legal obligation to file rests 
solely on the insiders.
---------------------------------------------------------------------------

    Small entity issuers should incur relatively few direct costs from 
the website posting requirement. Because the requirement applies only 
to those small entity issuers that already have a corporate website, 
small entity issuers will not need to incur the costs associated with 
creating or maintaining a website. In addition, small entity issuers 
could limit their additional costs associated with posting by 
hyperlinking to a third-party website such as EDGAR.

F. Duplicative, Overlapping, or Conflicting Federal Rules

    The proposed mandated electronic filing and website posting 
amendments would not duplicate, overlap, or conflict with other federal 
rules.

G. Significant Alternatives

    The Regulatory Flexibility Act directs the Commission to consider 
significant alternatives that would accomplish the stated objective, 
while minimizing any significant adverse impact on small entities. In 
connection with the proposed mandated electronic filing and website 
posting amendments we considered the following alternatives:
    [sbull] The establishment of differing compliance or reporting 
requirements or timetables that take into account the resources 
available to small entities;
    [sbull] The clarification, consolidation, or simplification of 
filing or posting requirements;
    [sbull] The use of performance rather than design standards; and
    [sbull] An exemption from the electronic filing and website posting 
requirements, or any part of them, for small entities.
    We believe that differing compliance or reporting requirements or 
timetables for small entities or a partial or complete exemption would 
be inconsistent with the will of Congress as reflected in amended 
Section 16(a) and the more efficient transmission, dissemination, 
analysis, storage and retrieval of insider ownership and transaction 
information in a manner that will benefit investors, filers and the 
Commission. We solicit comment, however, on whether differing 
compliance or reporting requirements or timetables for small entities 
would be consistent with the statutory mandate and described goals. We 
believe that the proposed electronic filing and website posting 
requirements are clear and straightforward. We are attempting to design 
an electronic filing system for these forms that will be simple for all 
filers to use. Therefore, it does not seem necessary to develop 
separate requirements for small entities. We have used design rather 
than performance standards in connection with the proposed electronic 
filing and website posting revisions because we want investors to know 
where to find the information and we want investors and the Commission 
to be able to analyze, store and retrieve the information involved. We 
also want the information disseminated to be in a form that is 
comparable between large and small issuers. We do not believe that 
performance standards for small entities would be consistent with the 
purpose of the proposed revisions.

H. Solicitation of Comments

    We encourage commenters to submit comments with respect to any 
aspect of this Initial Regulatory Flexibility Analysis. In particular, 
we request comments regarding
    [sbull] The number of small entity insiders and issuers that may be 
affected by the proposed revisions;
    [sbull] The existence or nature of the potential impact of the 
proposed revisions on small entity insiders and issuers as discussed in 
the analysis; and
    [sbull] How to quantify the impact of the proposed revisions.
    We ask commenters to describe the nature of any impact and provide 
empirical data supporting the extent of the impact. These comments will 
be considered in the preparation of the Final Regulatory Flexibility 
Analysis, if the proposed revisions are adopted, and will be placed in 
the same public file as comments on the proposed amendments themselves.

IX. Small Business Regulatory Enforcement Fairness Act

    For purposes of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (``SBREFA''),\100\ a rule is ``major'' if it has resulted, 
or is likely to result in:
---------------------------------------------------------------------------

    \100\ Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996).
---------------------------------------------------------------------------

    [sbull] An annual effect on the economy of $100 million or more;
    [sbull] A major increase in costs or prices for consumers or 
individual industries; or
    [sbull] Significant adverse effects on competition, investment or 
innovation.
    We request that commenters provide empirical data on (a) the annual 
effect on the economy; (b) any increase in costs or prices for 
consumers or individual industries; and (c) any effect on competition, 
investment or innovation. We also request comment on the reasonableness 
of this estimate.

X. Statutory Basis

    We are proposing the amendments to Regulation S-T, Rule 16a-3, and 
Forms 3, 4 and 5, and the removal of Form ET under the authority in 
Section 19(a) of the Securities Act, Sections 3(b), 16, 23(a) and 35A 
of the Exchange Act, Section 17(a) of the Public Utility Act, Section 
319 of the Trust Indenture Act, Section 30(h) of the Investment Company 
Act of 1940, and Section 3(a) of the Sarbanes-Oxley Act.

Text of Proposed Rule Amendments

List of Subjects in 17 CFR Parts 230, 232, 239, 240, 249, 250, 259, 
260, 269 and 274

    Reporting and Recordkeeping requirements, Securities.
    For the reasons set forth above, we propose to amend title 17, 
chapter II of the Code of Federal Regulations as follows.

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

    1. The authority citation for Part 230 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77b, 77c, 77d, 77f, 77g, 77h, 77j, 77r, 
77s, 77sss, 77z-3, 78c, 78d, 78l, 78m, 78n, 78o, 78t, 78w, 78ll(d), 
78mm, 79t, 80a-8, 80a-24, 80a-28, 80a-29, 80a-30, and 80a-37, unless 
otherwise noted.

* * * * *
    2. Amend Sec.  230.110 by revising paragraph (b) to read as 
follows:


Sec.  230.110  Business hours of the Commission.

* * * * *
    (b) Submissions made in paper. Paper documents filed with or 
otherwise furnished to the Commission may be submitted each day, except 
Saturdays, Sundays and federal holidays, from 8 a.m. to 5:30 p.m., 
Eastern Standard Time or Eastern Daylight Saving Time, whichever is 
currently in effect.
* * * * *

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

    3. The authority citation for Part 232 continues to read, in part 
as follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 77sss(a), 
78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll(d), 79t(a), 80a-8, 80a-
29, 80a-30 and 80a-37.
* * * * *
    4. Amend Sec.  232.12 by revising paragraph (b) to read as follows:


Sec.  232.12  Business hours of the Commission.

* * * * *

[[Page 79475]]

    (b) Submissions made in paper. Filers may submit paper documents 
filed with or otherwise furnished to the Commission each day, except 
Saturdays, Sundays and federal holidays, from 8 a.m. to 5:30 p.m., 
Eastern Standard Time or Eastern Daylight Saving Time, whichever is 
currently in effect.
* * * * *
    5. Amend Sec.  232.101 by:
    a. Revising paragraph (a)(1)(iii);
    b. Removing paragraph (b)(4); and
    c. Redesignating paragraphs (b)(5) through (b)(10) as paragraphs 
(b)(4) through (b)(9).
    The revision reads as follows:


Sec.  232.101  Mandated electronic submissions and exceptions.

    (a) * * *
    (1) * * *
    (iii) Statements, reports and schedules filed with the Commission 
pursuant to sections 13, 14, 15(d) or 16(a) of the Exchange Act (15 
U.S.C. 78m, 78n, 78o(d) and 78p(a)), and proxy materials required to be 
furnished for the information of the Commission in connection with 
annual reports on Form 10-K (Sec.  249.310 of this chapter), or Form 
10-KSB (Sec.  249.310b of this chapter) filed pursuant to Section 15(d) 
of the Exchange Act.
* * * * *

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

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

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77sss, 78c, 
78l, 78m, 78n, 78o(d), 78u-5, 78w(a), 78ll(d), 79(e), 79f, 79g, 79j, 
79l, 79m, 79n, 79q, 79t, 80a-8, 80a-24, 80a-29, 80a-30 and 80a-37, 
unless otherwise noted.
* * * * *
    7. Remove and reserve Sec.  239.62 and remove Form ET.

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

    8. 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, 78f, 78g, 78i, 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.

    9. Amend Sec.  240.0-2 by revising paragraph (b) to read as 
follows:


Sec.  240.0-2  Business hours of the Commission.

* * * * *
    (b) Submissions made in paper. Paper documents filed with or 
otherwise furnished to the Commission may be submitted to the 
Commission each day, except Saturdays, Sundays and federal holidays, 
from 8 a.m. to 5:30 p.m., Eastern Standard Time or Eastern Daylight 
Saving Time, whichever is currently in effect.
* * * * *
    10. Amend Sec.  240.16a-3 by revising paragraph (h) and adding 
paragraph (k) to read as follows:


Sec.  240.16a-3  Reporting transactions and holdings.

* * * * *
    (h) The date of filing with the Commission shall be the date of 
receipt by the Commission.
* * * * *
    (k) Any issuer that maintains a corporate website shall post on 
that website by the end of the business day after filing any Form 3, 4 
or 5 filed under Section 16(a) of the Act as to the equity securities 
of that issuer.

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

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

    Authority: 15 U.S.C. 78a et seq., unless otherwise noted.

* * * * *


Sec.  249.445  [Removed and Reserved]

    12. Remove and reserve Sec.  249.445 and Form ET.

PART 250--GENERAL RULES AND REGULATIONS, PUBLIC UTILITY HOLDING 
COMPANY ACT OF 1935

    13. The authority citation for Part 250 continues to read as 
follows:

    Authority: 15 U.S.C. 79c, 79f(b), 79i(c)(3), 79t, unless 
otherwise noted.

* * * * *
    14. Amend Sec.  250.21 by revising paragraph (b)(1) to read as 
follows:


Sec.  250.21  Filing of documents.

    (a) * * *
    (b) Electronic filings. (1) All documents required to be filed with 
the Commission under the Act or the rules and regulations thereunder 
must be filed at the principal office in Washington, DC via EDGAR by 
delivery to the Commission by direct transmission, via dial-up modem or 
Internet.
* * * * *

PART 259--FORMS PRESCRIBED UNDER THE PUBLIC UTILITY HOLDING COMPANY 
ACT OF 1935

    15. The authority citation for Part 259 continues to read as 
follows:

    Authority: 15 U.S.C. 79e, 79f, 79g, 79j, 79l, 79m, 79n, 79q, 
79t.

* * * * *


Sec.  259.601  [Removed and Reserved]

    16. Remove and reserve Sec.  259.601 and Form ET.

PART 260--GENERAL RULES AND REGULATIONS, TRUST INDENTURE ACT OF 
1939

    17. The authority citation for Part 260 continues to read as 
follows:

    Authority: 15 U.S.C. 77eee, 77ggg, 77nnn, 77sss, 78ll(d), 80b-3, 
80b-4, and 80b-11.

* * * * *
    18. Amend Sec.  260.0-5 by revising paragraph (b) to read as 
follows:


Sec.  260.0-5  Business hours of the Commission.

* * * * *
    (b) Submissions made in paper. Paper documents filed with or 
otherwise furnished to the Commission may be submitted to the 
Commission each day, except Saturdays, Sundays and federal holidays, 
from 8 a.m. to 5:30 p.m., Eastern Standard Time or Eastern Daylight 
Saving Time, whichever is currently in effect.
* * * * *

PART 269--FORMS PRESCRIBED UNDER THE TRUST INDENTURE ACT OF 1939

    19. The authority citation for Part 269 continues to read as 
follows:

    Authority: 15 U.S.C. 77ddd(c), 77eee, 77ggg, 77hhh, 77iii, 
77jjj, 77sss, 78ll(d), unless otherwise noted.
* * * * *


Sec.  269.6  [Removed and Reserved]

    20. Remove and reserve Sec.  269.6 and Form ET.

PART 274--FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 1940

    21. The authority citation for Part 274 continues to read in part 
as follows:


    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l, 78m, 
78n, 78o(d), 80a-8, 80a-24, 80a-26, and 80a-29, unless otherwise 
noted.
* * * * *
    22. Amend Form 3 (referenced in Sec.  249.103 and Sec.  274.202) 
by:
    a. Revising General Instruction 3(a);

[[Page 79476]]

    b. Adding a note following General Instruction 3;
    c. Revising General Instruction 6; and
    d. Removing Item 3 and redesignating Items 4, 5, 6 and 7 to the 
information preceding Table I as Items 3, 4, 5 and 6 to the information 
preceding Table I.
    The revisions and addition read as follows:

    Note: The text of Form 3 does not and this amendment will not 
appear in the Code of Federal Regulations.

Form 3 Initial Statement of Beneficial Ownership of Securities
* * * * *

General Instructions

* * * * *

3. Where Form Must be Filed

    (a) A reporting person must file this Form in electronic format via 
the Commission's Electronic Data Gathering Analysis and Retrieval 
System (EDGAR) in accordance with EDGAR rules set forth in Regulation 
S-T (17 CFR Part 232), except that a filing person that has obtained a 
hardship exception under Regulation S-T Rule 201 or 202 (17 CFR 232.201 
or 232.202) may file the Form in paper. For assistance with technical 
questions about EDGAR or to request an access code, call the EDGAR 
Filer Support Office at (202) 942-8900. For assistance with questions 
about the EDGAR rules, call the Office of EDGAR and Information 
Analysis at (202) 942-2940.
* * * * *

    Note: If filing pursuant to a hardship exception under 
Regulation S-T Rule 201 or 202 (17 CFR 232.201 or 232.202), file 
three copies of this Form or any amendment with the Securities and 
Exchange Commission, 450 5th Street, NW., Washington, DC 20549. 
(Note: Acknowledgement of receipt by the Commission may be obtained 
by enclosing a self-addressed stamped postcard identifying the Form 
or amendment filed.)

* * * * *

6. Additional Information

    (a) If the space provided in the line items on the electronic Form 
is insufficient, use the space provided for footnotes. If the space 
provided for footnotes is insufficient, create a footnote that refers 
to an exhibit to the form that contains the additional information.
    (b) If the space provided in the line items on the paper Form or 
space provided for additional comments is insufficient, attach another 
Form 3, copy of Form 3 or separate 8 \1/2\ by 11 inch white paper to 
Form 3, completed as appropriate to include the additional comments. 
Each attached page must include information required in Items 1, 2 and 
4 of the Form. The number of pages comprising the report (Form plus 
attachments) shall be indicated at the bottom of each report page 
(e.g., 1 of 3, 2 of 3, 3 of 3).
    (c) If additional information is not reported as provided in 
paragraph (a) or (b) of this instruction, whichever applies, it will be 
assumed that no additional information was provided.
* * * * *
    23. Amend Form 4 (referenced in Sec.  249.104 and Sec.  274.203) 
by:
    a. Revising General Instruction 2(a);
    b. Adding a note following General Instruction 2;
    c. Revising General Instruction 6;
    d. Revising the form heading; and
    e. Removing Item 3 and redesignating Items 4, 5, 6 and 7 to the 
information preceding Table I as Items 3, 4, 5 and 6 to the information 
preceding Table I.
    The revisions and addition read as follows:

    Note: The text of Form 4 does not and this amendment will not 
appear in the Code of Federal Regulations.

Form 4 Statement of Changes in Beneficial Ownership of Securities
* * * * *

General Instructions

* * * * *

2. Where Form Must Be Filed

    (a) A reporting person must file this Form in electronic format via 
the Commission's Electronic Data Gathering Analysis and Retrieval 
System (EDGAR) in accordance with EDGAR rules set forth in Regulation 
S-T (17 CFR Part 232), except that a filing person that has obtained a 
hardship exception under Regulation S-T Rule 201 or 202 (17 CFR 232.201 
or 232.202) may file the Form in paper. For assistance with technical 
questions about EDGAR or to request an access code, call the EDGAR 
Filer Support Office at (202) 942-8900. For assistance with questions 
about the EDGAR rules, call the Office of EDGAR and Information 
Analysis at (202) 942-2940.
* * * * *

    Note: If filing pursuant to a hardship exception under 
Regulation S-T Rule 201 or 202 (17 CFR 232.201 or 232.202), file 
three copies of this Form or any amendment with the Securities and 
Exchange Commission, 450 5th Street, NW., Washington, DC 20549. 
(Note: Acknowledgement of receipt by the Commission may be obtained 
by enclosing a self-addressed stamped postcard identifying the Form 
or amendment filed.)

* * * * *

6. Additional Information

    (a) If the space provided in the line items on the electronic Form 
is insufficient, use the space provided for footnotes. If the space 
provided for footnotes is insufficient, create a footnote that refers 
to an exhibit to the form that contains the additional information.
    (b) If the space provided in the line items on the paper Form or 
space provided for additional comments is insufficient, attach another 
Form 4, copy of Form 4 or separate 8\1/2\ by 11 inch white paper to 
Form 4, completed as appropriate to include the additional comments. 
Each attached page must include information required in Items 1, 2 and 
4 of the Form. The number of pages comprising the report (Form plus 
attachments) shall be indicated at the bottom of each report page 
(e.g., 1 of 3, 2 of 3, 3 of 3).
    (c) If additional information is not reported as provided in 
paragraph (a) or (b) of this instruction, whichever applies, it will be 
assumed that no additional information was provided.
* * * * *
Form 4 Statement of Changes in Beneficial Ownership of Securities
* * * * *
    24. Amend Form 5 (referenced in Sec.  249.105) by:
    a. Revising General Instruction 2(a);
    b. Adding a note following General Instruction 2;
    c. Revising General Instruction 6;
    d. Removing Item 3 and redesignating Items 4, 5, 6 and 7 to the 
information preceding Table I as Items 3, 4, 5 and 6;
    e. Revising newly redesignated Items 3 and 4 to the information 
preceding Table I; and
    f. Revising the heading for Table II and column 9 in Table II.
    The revisions and addition read as follows:

    Note: The text of Form 5 does not and this amendment will not 
appear in the Code of Federal Regulations.


Form 5 Annual Statement of Beneficial Ownership of Securities
* * * * *

General Instructions

* * * * *

2. Where Form Must Be Filed

    (a) A reporting person must file this Form in electronic format via 
the Commission's Electronic Data Gathering Analysis and Retrieval 
System (EDGAR) in accordance with EDGAR rules set forth in Regulation 
S-T (17 CFR Part

[[Page 79477]]

232), except that a filing person that has obtained a hardship 
exception under Regulation S-T Rule 201 or 202 (17 CFR 232.201 or 
232.202) may file the Form in paper. For assistance with technical 
questions about EDGAR or to request an access code, call the EDGAR 
Filer Support Office at (202) 942-8900. For assistance with questions 
about the EDGAR rules, call the Office of EDGAR and Information 
Analysis at (202) 942-2940.
* * * * *

    Note: If filing pursuant to a hardship exception under 
Regulation S-T Rule 201 or 202 (17 CFR 232.201 or 232.202), file 
three copies of this Form or any amendment with the Securities and 
Exchange Commission, 450 5th Street, NW, Washington, DC 20549. 
(Note: Acknowledgement of receipt by the Commission may be obtained 
by enclosing a self-addressed stamped postcard identifying the Form 
or amendment filed.)

* * * * *

6. Additional Information

    (a) If the space provided in the line items on the electronic Form 
is insufficient, use the space provided for footnotes. If the space 
provided for footnotes is insufficient, create a footnote that refers 
to an exhibit to the form that contains the additional information.
    (b) If the space provided in the line items on the paper Form or 
space provided for additional comments is insufficient, attach another 
Form 5, copy of Form 5 or separate 8\1/2\ by 11 inch white paper to 
Form 5, completed as appropriate to include the additional comments. 
Each attached page must include information required in Items 1, 2 and 
4 of the Form. The number of pages comprising the report (Form plus 
attachments) shall be indicated at the bottom of each report page 
(e.g., 1 of 3, 2 of 3, 3 of 3).
    (c) If additional information is not reported as provided in 
paragraph (a) or (b) of this instruction, whichever applies, it will be 
assumed that no additional information was provided.
* * * * *
Form 5
* * * * *
    3. Statement for Month/Day/Year
    4. If Amendment, Date of Original Month/Day/Year
* * * * *
    Table II--Derivative Securities Acquired, Disposed of, or 
Beneficially Owned (e.g., puts, calls, warrants, options, convertible 
securities)
* * * * *
    9. Number of Derivative Securities Beneficially Owned at End of 
Issuer's Fiscal Year (Instr. 4)
* * * * *


Sec.  274.401  [Removed and Reserved]

    24. Remove and reserve Sec.  274.401 and Form ET.

    By the Commission.

    Dated: December 20, 2002.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 02-32731 Filed 12-26-02; 8:45 am]
BILLING CODE 8010-01-P