[Federal Register Volume 69, Number 55 (Monday, March 22, 2004)]
[Proposed Rules]
[Pages 13426-13437]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-6187]



[[Page 13425]]

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Part III





Securities and Exchange Commission





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17 CFR Parts 232, 239, 249, et al.



Mandated Electronic Filing for Form ID; Proposed Rule

  Federal Register / Vol. 69, No. 55 / Monday, March 22, 2004 / 
Proposed Rules  

[[Page 13426]]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 232, 239, 249, 259, 269 and 274

[Release Nos. 33-8399, 34-49416, 35-27815, 39-2416, IC-26385; File No. 
S7-14-04]
RIN 3235-AJ09


Mandated Electronic Filing for Form ID

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 of Form ID. Form ID is the application for access 
codes to file on EDGAR. The intended effect of the proposals is to 
facilitate the more efficient transmission and processing of the 
information Form ID requires in a manner that will benefit investors, 
filers and the Commission.

DATES: Comments should be submitted on or before April 5, 2004.

ADDRESSES: Comments may be submitted electronically or by paper. 
Electronic comments may be submitted by: (1) Electronic form on the SEC 
Web site (http://www.sec.gov) or (2) e-mail to [email protected]. 
Mail paper comments in triplicate to Jonathan G. Katz, Secretary, 
Securities and Exchange Commission, 450 Fifth Street, NW., Washington, 
DC 20549-0609. All submissions should refer to file number S7-14-04; 
this file number should be included on the subject line if e-mail is 
used. To help us process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov). Comments are 
also available for public inspection and copying in the Commission's 
Public Reference Room, 450 Fifth Street, NW., Washington, DC 20549. We 
do not edit personal identifying information from submissions. You 
should submit only information that you wish to make available 
publicly.

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

SUPPLEMENTARY INFORMATION: We propose to amend Rules 10 \1\, 101 \2\, 
104 \3\, 201 \4\ and 202 \5\ under Regulation S-T \6\ and Form ID \7\.
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    \1\ 17 CFR 232.10.
    \2\ 17 CFR 232.101.
    \3\ 17 CFR 232.104.
    \4\ 17 CFR 232.201.
    \5\ 17 CFR 232.202.
    \6\ 17 CFR 232.10 et seq.
    \7\ 17 CFR 239.63, 249.446, 259.602, 269.7 and 274.402.
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I. Background and New Filing System

    Currently, applicants applying for access codes to file on the 
Commission's Electronic Data Gathering, Analysis and Retrieval System 
(``EDGAR'') must file a Form ID in paper \8\ by fax.\9\ When we 
initially launched the EDGAR system, we required applicants \10\ to 
file Form ID in paper by mail. In November 2001, however, we began to 
require that applicants file Form ID solely by fax.\11\ The electronic 
filing of Form ID will facilitate the more efficient transmission and 
processing of the information Form ID requires in a manner that will 
benefit investors, filers and the Commission. The information will be 
transmitted in a speedy, secure and reliable manner and will directly 
enter the Commission's records rather than having to be keyed in by 
Commission personnel.
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    \8\ Regulation S-T Rule 10(b) [17 CFR 232.10(b)].
    \9\ Section 1.3.1 of EDGAR Release 8.6 EDGARLink Filer Manual 
(Volume I) and Onlineforms Filer Manual (Volume III). In some 
instances, applicants can acquire replacement codes through our 
EDGAR website without use of a Form ID. Applicants will be able to 
continue this practice under specified circumstances.
    \10\ The three categories of individuals or entities that apply 
for access codes are ``filers'', ``filing agents'' and ``training 
agents'' (collectively, ``applicants''). A filer is an individual or 
entity on whose behalf an electronic filing is made. A filing agent 
is an individual or entity that uses access codes to send all or 
part of a filing on behalf of a filer. A training agent is an 
individual or entity that will be sending only test filings in 
connection with training others.
    \11\ The former requirement to file by mail still is reflected 
in Part V of the General Instructions to Form ID. This requirement, 
however, has been superseded by the fax requirement in the Filer 
Manual.
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    We currently expect that the rules requiring electronic filing of 
Forms ID will be effective in late April, possibly after little further 
notice. By that time, a related new on-line filing system accessed 
through an EDGAR Filer Management website is scheduled to be 
completed.\12\
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    \12\ An on-line filing system currently is available for Forms 3 
[17 CFR 249.103 and 274.202], 4 [17 CFR 249.104 and 274.203] and 5 
[249.105] filed under Section 16(a) of the Securities Exchange Act 
of 1934 (``Exchange Act'') [15 U.S.C. 78p(a)].
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    Applicants who are new filers will be required to file Forms 
ID.\13\ Applicants will be required to access the EDGAR Filer 
Management website to fill out and submit the forms, as EDGARLink 
filing will not be available for submission of these forms. Other types 
of filers (i.e., those who are not new filers) that wish to obtain 
access codes will be able to do so through the EDGAR Filer Management 
website or, in generally the same manner as available today, the 
current EDGAR Filer or Online Forms websites, in all cases without 
filing a Form ID.\14\
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    \13\ A ``new filer'' is an applicant that has not previously 
filed with the Commission or has filed only paper Forms 3, 4 or 5 
(all required to be filed electronically since June 30, 2003) or 
paper Forms 144 [17 CFR 239.144], under the Securities Act of 1933 
(``Securities Act'') [15 U.S.C. 77a et seq.], and, as a result, has 
not been assigned by the Commission a Central Index Key (CIK) code. 
The CIK code is a unique publicly available identifier and EDGAR 
access code.
    \14\ Modifications to EDGAR in connection with establishing the 
EDGAR Filer Management Web site will require applicants who file 
Form ID and users who log onto EDGAR for filing to choose a 
passphrase. A passphrase will enable a user to change its access 
codes easily. The passphrase system will provide advantages over the 
current system for changing access codes. In the current system, 
users often forget the access code needed to change easily another 
access code and have greater difficulty changing a code that has 
expired. Under the new system, users should remember more easily 
their passphrase since they choose it and an access code's 
expiration will not affect the passphrase. A passphrase remains 
valid unless and until the user changes it. Further details about 
passphrases and access codes will be provided in revisions to the 
EDGAR Filer Manual.
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    To access and file Forms ID through our EDGAR Filer Management 
website, each applicant must have available all the information Form ID 
requires when the applicant accesses the website because the system 
will not provide a way to save an incomplete form on-line from session 
to session. A time-out that ends the session will occur one hour 
following the user's last activity on the system. We expect that there 
will be more than enough time to prepare, review and submit a Form ID 
given the nature and quantity of information required. Unlike the 
current system, only one applicant per Form ID will be permitted. The 
system will validate for data type and required fields as many fields 
as possible during the submission process. Applicants will have the 
chance to correct errors and verify the accuracy of the information 
prior to submission. An on-line help function will be available. The 
applicant will be able to add attachments before submission and print 
the information submitted after submission.

II. The Proposed Rule Amendments

A. Required Electronic Filing of Form ID

    We propose to amend Regulation S-T \15\ to require applicants who 
are new filers to file Forms ID with us

[[Page 13427]]

electronically. As noted above, Rule 10 of Regulation S-T currently 
requires Forms ID to be filed in paper.\16\ The proposed amendment 
would revise subparagraph (b) of Rule 10 to replace the paper filing 
requirement with an electronic filing requirement.\17\ For clarity and 
ease of reference, the amendment also would revise subparagraph (a)(1) 
of Rule 101 of Regulation S-T \18\ to add a new subparagraph (ix) to 
add Form ID to the rule's list of documents required to be filed 
electronically.\19\
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    \15\ Regulation S-T is the general regulation governing 
electronic filing. In addition to complying with Regulation S-T, 
filers must submit electronic documents in accordance with the 
instructions in the EDGAR Filer Manual.
    \16\ As also noted above, currently, the EDGAR Filer Manual 
requires Form ID to be filed by fax and Form ID contains a 
superseded instruction to file Form ID by mail.
    \17\ We plan to amend the EDGAR Filer Manual accordingly. We 
also plan to amend Rule 104(a) of Regulation S-T to make it clear 
that unofficial PDF copy submissions are unavailable to Form ID.
    \18\ 17 CFR 232.101(a)(1).
    \19\ Rule 101(a)(1) also requires the electronic submission of 
any related correspondence and supplemental information pertaining 
to a document that is the subject of mandated electronic filing 
``except as otherwise provided.'' Proposed Rule 101(a)(1)(ix) would 
prohibit electronic submission of the notarized confirming 
authenticating document described in Section II.B of this release. 
Further, the proposed rule would prohibit electronic submission of 
related correspondence and supplemental information submitted after 
electronic filing of Form ID and before the Commission assigns 
access codes to the applicant to file on EDGAR.
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    We also propose to amend Regulation S-T to make hardship exemptions 
unavailable to Forms ID. The proposed amendments would revise 
subparagraph (a) of Rules 201 \20\ and 202 \21\ to exclude Form ID from 
the filings for which hardship exemptions are available. We believe 
hardship exemptions should not be available to Forms ID because a filer 
unable to file electronically a Form ID also, presumably, would be 
unable to file on EDGAR even with the access codes obtained in response 
to a Form ID filing. Consequently it appears that there would be no 
practical need for a hardship exemption, and granting the exemption 
could undermine the purposes of mandated electronic filing of Forms 
ID.\22\
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    \20\ 17 CFR 232.201(a).
    \21\ 17 CFR 232.202(a).
    \22\ 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 well in advance of the 
first required filing, including a registration statement relating 
to an initial public offering, in order to facilitate electronic 
filing on a timely basis.'').
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B. Required Faxing of Confirming Document Authenticating Form ID

    Because only new filers will file the electronic Form ID, we 
believe the form should be supplemented with additional verification to 
help ensure the security of the system. Accordingly, we also propose to 
amend Regulation S-T to require these applicants to file in paper by 
fax within two business days before or after electronically filing Form 
ID a notarized document, manually signed by the applicant over its 
typed signature, that includes the information contained in the Form ID 
filed or to be filed and confirms the authenticity of the Form ID.\23\ 
The purpose of this requirement is to help assure that the Form ID is 
authentic. We expect that eventually we will replace this procedure 
with a requirement that applicants use a certificate from a 
certification authority to authenticate their Form ID filings.\24\
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    \23\ The proposed amendment also would revise subparagraph (b) 
of Rule 10 of Regulation S-T to add this requirement. One way to 
satisfy the authenticating document requirement, though only after 
electronic submission, would be to use a print-out of the Form ID 
application acknowledgement generated by the EDGAR Filer Management 
website. To use the print-out to satisfy the requirement, the 
applicant must notarize the print-out and add an authenticity 
confirming statement. Before faxing the print-out, the applicant 
also should make illegible the passphrase that appears on it. The 
passphrase should be made illegible because, as a code that enables 
the acquisition of new EDGAR access codes, it should be kept highly 
confidential.
    \24\ A certification authority issues a certificate that works 
like an electronic ``pass card'' that verifies the holder's identity 
when filing. The certification authority's digital signature would 
allow us to verify that the certificate is authentic. Certificates 
currently are optional for filing on EDGAR. They may be purchased 
from Verisign, the current certification authority for EDGAR.
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C. Form ID

    We propose some minor changes to Form ID to facilitate the 
electronic filing provisions, as follows:
    1. Amend the section immediately above the heading for Part I to 
delete the phrase ``Applicant's CIK (if known)'', the checkboxes and 
the checkboxes' related labels ``Initial Application'' and 
``Amendment.'' A new filer would not have a CIK or have filed a Form ID 
to amend. Information previously reported on Form ID will continue to 
be able to be corrected or updated through the EDGAR Filer or EDGAR 
Online Forms website. As a result, applicants will not need to amend 
Forms ID.
    2. Amend Part I of Form ID to:
     Refer consistently to ``applicant'' rather than 
``registrant'';
     Clarify how to present an individual's name;
     Delete the subsection regarding former name as 
unnecessary;
     Clarify that a foreign address must include the 
name of the foreign country rather than the name of a state;
     Clarify that a foreign telephone number must 
include a country code in addition to an area code; \25\
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    \25\ The described amendments to clarify what foreign addresses 
and telephone numbers must include also are proposed as to Parts II, 
III and IV of Form ID.
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     Add applicant type checkboxes for individual and 
foreign private issuer \26\ applicants that are to be marked by 
applicants, as applicable, in addition to one of the three types 
(filer, filing agent and training agent) currently on the form; and
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    \26\ The term ``foreign private issuer'' is used in this release 
as defined in Securities Act Rule 405 [17 CFR 230.405] and Exchange 
Act Rule 3b-4(c) [17 CFR 240.3b-4(c)].
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     Delete the last three subsections of the part 
relating to the superseded concepts of initial and amended 
applications.
    3. Amend Part II of Form ID to:
     Revise the heading of the part to clarify that 
it applies only to filers that are not individuals;
     Delete the subsection asking whether the 
applicant currently files with the Commission and, if so, what at least 
one of the applicant's Commission file numbers is (this information no 
longer is necessary);
     Refer consistently to ``filer'' rather than 
``registrant'';
     Add subsections for the name under which the 
filer does business and, for foreign private issuer filers, the name of 
the filer in any language other than English; and
     Clarify that a Social Security number must not 
be entered as the filer's tax or federal identification number.
    4. Amend Part III of Form ID to delete the subsection regarding the 
EDGAR Private Mail system that no longer exists.
    5. Amend Part V of Form ID to add a warning regarding federal 
criminal liability for misstatements or omissions.
    6. Amend the statutory authority section immediately below Part V 
of Form ID to make two authority citations more precise and to correct 
a typographical error in another citation.
    7. Amend the introductory section of the General Instructions to 
Form ID to
     Delete the superseded reference to amendments;
     Delete the language cautioning that an 
incomplete form may delay codes because a complete form will be 
necessary to obtain codes;
     Add descriptions of the requirements to file 
Form ID electronically and fax to the Commission a notarized document, 
manually signed by the applicant over a typed signature, that confirms 
the authenticity of the Form ID; and

[[Page 13428]]

     Add contact information for questions.
    8. Amend Part I of the General Instructions to Form ID to
     Add and define the applicant type 
``Individual'';
     Place the applicant type definitions in bullet 
format;
     Add the requirement that the applicant's 
individual or foreign private issuer status be indicated, as 
applicable; and
     Delete all the text after the applicant type 
definitions because that text addresses the superseded notions of 
initial and amended Form ID filings.
    9. Amend Part II of the General Instructions to Form ID to
     Clarify in the parenthetical in the heading that 
Part II of Form ID only should be completed by filers that are not 
individuals;
     Refer consistently to ``filer'' rather than 
``registrant'';
     Clarify in the text that Part II of Form ID does 
not apply to individuals and that, accordingly, a Social Security 
number must not be entered as a tax or federal identification number;
     Clarify that if an investment company filer is 
organized as a series company, the investment company may use the tax 
or federal identification number of any one of its constituent series;
     Clarify that issuers that have applied for but 
not yet received their tax or federal identification number must 
include all zeroes;
     Provide that if the filer's fiscal year does not 
end on the same date each year (e.g., falls on the last Saturday in 
December), the filer must enter the date the current fiscal year will 
end; and
     Delete the sentence regarding individuals' 
providing state of incorporation or organization information since 
individuals no longer will be filling in Part II of Form ID.
    10. Amend Part III of the General Instructions to Form ID to 
replace all the text, after the first sentence, regarding EDGAR Private 
Mail system and Internet e-mail with text that omits reference to the 
now defunct EDGAR Private Mail system and instead provides guidance 
regarding default and additional per filing e-mail contact addresses.
    11. Amend Part IV of the General Instructions to Form ID to add a 
sentence directing applicants to advise us through the EDGAR filing 
website of changed address information to help assure that account 
statements reach the specified contact person.
    12. Amend Part V of the General Instructions to Form ID to add 
guidance on how to sign the form.

D. Comment Solicited

    We request comment on the rule and form changes we propose in this 
release. Questions regarding safeguards to help us authenticate Form ID 
filings:
     Is the proposed faxed notarized document to help 
authenticate Form ID filings an effective safeguard? Would it be overly 
burdensome to filers?
     Would its operation, effectiveness or burden 
differ for foreign applicants and, if so, how?
     If a faxed notarized document can be an 
effective safeguard:
     What document should we require to be notarized 
and faxed (e.g., Form ID itself, a document similar to Form ID or a 
letter)?
     Within how many business days before or after 
the electronic filing of Form ID should we require the notarized 
document to be faxed?
     If a faxed notarized document is not adequate to 
help authenticate Form ID filings or is overly burdensome to filers, 
what safeguard would be adequate as to domestic or foreign applicants 
before it is feasible to use a certification authority?
    Question regarding hardship exemptions:
     Is there a practical need for a hardship 
exemption to allow paper filing of Form ID and, if so, under what 
circumstances?

III. General Request for Comments

    We request and encourage any interested person to submit comments 
regarding:
     The proposed changes that are the subject of 
this release;
     Additional or different changes; or
     Other matters that may have an effect on the 
proposals contained in this release.
    We request comment from the point of view of investors, applicants, 
issuers and others who use or otherwise are involved with electronic 
filing. 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.

IV. Paperwork Reduction Act

    The proposed rule amendments would affect one form that contains 
``collection of information'' requirements within the meaning of the 
Paperwork Reduction Act of 1995.\27\ The title of the affected 
information collection is the EDGAR Form ID.
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    \27\ 44 U.S.C. 3501 et seq.
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    Form ID (OMB Control Number 3235-0328) is used by applicants 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.
    Compliance with the proposed amendments would be mandatory. The 
information required by the proposed amendments would be kept 
confidential by the Commission, subject to a request under the Freedom 
of Information Act.\28\
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    \28\ 5 U.S.C. 552. The Commission's regulations that implement 
the Act are at 17 CFR 200.80 et seq.
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    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 expect that, if adopted, the 
proposed amendments would obligate applicants to disclose on Forms ID 
essentially the same information that they are required to disclose 
today.\29\ We therefore believe that the overall information collection 
burden of Form ID would remain approximately the same. As a result, we 
have not submitted the revisions to the collections of information to 
the Office of Management and Budget for review under 44 U.S.C. 3507(d) 
and 5 CFR 1320.11.
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    \29\ The information required in any notarized confirming 
authenticating document would be no more extensive than would be 
needed for the Form ID itself.
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    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 estimate that no additional burden would 
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 applicants who 
file Form ID, 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

[[Page 13429]]

information not previously identified in this section.

V. Cost-Benefit Analysis

    We expect that the proposed amendments will benefit investors, 
applicants and the Commission.

A. Expected Benefits

    The proposed amendments should benefit investors, applicants and 
the Commission because the information contained in Form ID would be 
transmitted in a speedy, secure and reliable manner and would directly 
enter the Commission's records rather than be keyed in by Commission 
personnel, which currently must be done. This should improve the speed 
and accuracy of the process that leads to applicants' receipt of the 
codes needed to file on EDGAR. This improvement would enable applicants 
to disseminate information sooner to investors.

B. Expected Costs

    We expect that the proposed amendments would result in some costs 
to applicants. However, we expect that many applicants will not bear 
the full range of costs resulting from the adoption of these amendments 
for the reasons described below.
    As noted above, we expect that, if adopted, the proposed amendments 
would obligate applicants to disclose on Form ID essentially the same 
information that they are required to disclose today. We therefore 
believe that the overall information collection burden of Form ID would 
remain approximately the same. As a result, the cost of collecting the 
information would remain approximately the same.
    The expected costs of mandated electronic filing of Form ID consist 
of both initial and ongoing costs. Initial costs include those 
associated with learning about the electronic filing system, obtaining 
a computer, 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 by updating information 
required by Form ID.
    We expect that most applicants will need to incur few, if any, 
additional costs from electronic filing. Applicants who are new filers 
likely would be prepared to become electronic filers and, accordingly, 
would be prepared to access the EDGAR Filer Management Web site.
    To the extent applicants who file Forms ID are officers or 
directors, we understand that many issuers will help them or make their 
filings for them. To the extent officers and directors do not receive 
this help, we believe many already will have the computer equipment and 
Internet access to enable them to file using the EDGAR Filer Management 
Web site.
    Even issuers that file Form ID electronically on their own behalf 
or help their officers or directors, whether to a greater or lesser 
extent, to file electronically are not likely to incur additional 
costs. Issuers are required to file on EDGAR and generally have the 
needed computer equipment and Internet service provider access to 
enable them to file or facilitate filing using the EDGAR Filer 
Management Web site.
    Finally, we believe that faxing a notarized confirming 
authenticating document would result in negligible additional costs. An 
applicant currently must incur the cost of faxing a Form ID, and the 
information in the confirming authenticating document would be no more 
extensive than would be needed for the Form ID itself. Based on what 
appear to be common practices at Washington, DC area banks, we believe 
that banks generally will notarize customer documents for no additional 
fee and that those banks that notarize for non-customers generally will 
notarize a document for less than ten dollars.

C. Comment Solicited

    We solicit comments on the costs and benefits of the proposed 
amendments for applicants. 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 the mandated electronic filing 
requirements. We also request data as to what percentage of Form ID 
filings by non-issuers are done by or with the help of an issuer.

VI. Effect on Efficiency, Competition and Capital Formation

    Section 23(a)(2) of the Exchange Act \30\ 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 
\31\ and Section 3(f) of the Exchange Act \32\ 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.
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    \30\ 15 U.S.C. 78w(a)(2).
    \31\ 15 U.S.C. 77b(b).
    \32\ 15 U.S.C. 78c(f).
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    The proposed amendments regarding mandated electronic filing of 
Form ID are intended to facilitate the more efficient transmission and 
processing of the information that Form ID requires. This should 
improve the speed and accuracy of the process that leads to applicants' 
receipt of the codes needed to file on EDGAR. This improvement would 
enable applicants to disseminate information sooner to investors. As a 
result, the amendments 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.
    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.

VII. 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 of Form ID.

A. Reasons for the Proposed Action

    An applicant uses Form ID to apply for the access codes required to 
file electronically on EDGAR. We believe the proposed amendments will 
benefit investors, applicants and the Commission.

B. Objectives

    Our objective in proposing the mandated electronic filing 
amendments is to facilitate the more efficient transmission and 
processing of the information Form ID requires in a manner that will 
benefit investors, applicants and the Commission.

C. Legal Basis

    We are proposing the amendments under the authority set forth in 
Section 19(a) \33\ of the Securities Act, Sections

[[Page 13430]]

3(b),\34\ 13(a),\35\ 23(a) \36\ and 35A \37\ of the Exchange Act, 
Section 20 \38\ of the Public Utility Holding Company Act (``Public 
Utility Act''), Section 319 \39\ of the Trust Indenture Act of 1939 
(``Trust Indenture Act'') and Sections 30 \40\ and 38 \41\ of the 
Investment Company Act of 1940 (``Investment Company Act'').
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    \33\ 15 U.S.C. 77s(a).
    \34\ 15 U.S.C. 78c(b).
    \35\ 15 U.S.C. 78m(a).
    \36\ 15 U.S.C. 78w(a).
    \37\ 15 U.S.C. 78ll.
    \38\ 15 U.S.C. 79t.
    \39\ 15 U.S.C. 77sss.
    \40\ 15 U.S.C. 80-29.
    \41\ 15 U.S.C. 80-37.
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D. Small Entities Subject to the Proposed Revisions

    The proposed amendments would affect small entities that are 
applicants that are not natural persons. Exchange Act Rule 0-10(a) \42\ 
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. For 
purposes of the Regulatory Flexibility Act, an investment company is a 
small entity if it, together with other investment companies in the 
same group of related investment companies, has net assets of $50 
million or less as of the end of its most recent fiscal year. The 
proposed amendments would apply to all small entities that are 
applicants.
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    \42\ 17 CFR 240.0-10(a).
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E. Reporting, Recordkeeping and Other Compliance Requirements

    Currently, applicants must file Forms ID in paper by fax. The 
amendments would require applicants to file these forms electronically 
and fax to the Commission a notarized confirming authenticating 
document containing at least the information the Form ID contains. 
Because applicants already file Forms ID in paper by fax, the only 
additional professional skills applicants would need would be those 
required to file electronically. We expect that filing electronically 
would increase costs incurred by some small entities. However, we 
expect that many small entities would 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 include those associated with 
learning about the electronic filing system, obtaining a computer, 
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 by updating information required by Form ID.
    We expect that many small entity applicants will need to incur few, 
if any, additional costs from electronic filing. Some issuers may help 
related small entity applicants (such as subsidiaries) or make the 
related small entity applicants' filings for them. To the extent small 
entity applicants do not receive this help, we believe many already 
will have the computer equipment and Internet access to enable them to 
file using the EDGAR Filer Management Web site.
    Even small entity issuers that file Form ID electronically on their 
own behalf or help their related small entity applicants, whether to a 
greater or lesser extent, to file electronically are not likely to 
incur additional costs. Small entity issuers are required to file on 
EDGAR and generally have the needed computer equipment and Internet 
service provider access to enable them to file or facilitate filing 
using the EDGAR Filer Management Web site.
    Finally, we believe that faxing a notarized confirming 
authenticating document would result in negligible additional costs. A 
small entity applicant currently must incur the cost of faxing a Form 
ID and the information in the authenticating document would be no more 
extensive than would be needed for the Form ID itself. Based on what 
appear to be common practices at Washington, DC area banks, we believe 
that banks generally will notarize customer documents for no additional 
fee and that those banks that notarize for non-customers generally will 
notarize a document for less than ten dollars.

F. Duplicative, Overlapping, or Conflicting Federal Rules

    The proposed mandated electronic filing 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 amendments, we 
considered the following alternatives:
     The establishment of differing compliance or 
reporting requirements or timetables that take into account the 
resources available to small entities;
     The clarification, consolidation, or 
simplification of filing requirements;
     The use of performance rather than design 
standards; and
     An exemption from the electronic filing 
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 more efficient transmission and processing of 
the information Form ID requires in a manner that will benefit 
investors, applicants and the Commission. We solicit comment, however, 
on whether differing compliance or reporting requirements or timetables 
for small entities would be consistent with the described goals. We 
believe that the proposed electronic filing requirements are clear and 
straightforward. We are attempting to design an electronic filing 
system for Forms ID 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 revisions 
because we want the Commission to be able to process readily the 
information involved. 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:
     The number of small entities that may be 
affected by the proposed revisions;
     The existence or nature of the potential impact 
of the proposed revisions on small entities as discussed in the 
analysis; and
     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 or certification, if the proposed revisions are adopted, and 
will be placed in the same public file as comments on the proposed 
amendments themselves.

VIII. Small Business Regulatory Enforcement Fairness Act

    For purposes of the Small Business Regulatory Enforcement Fairness 
Act of

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1996 (``SBREFA''),\43\ a rule is ``major'' if it has resulted, or is 
likely to result in:
---------------------------------------------------------------------------

    \43\
    Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996).
---------------------------------------------------------------------------

     An annual effect on the economy of $100 million 
or more;
     A major increase in costs or prices for 
consumers or individual industries; or
     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.

IX. Statutory Basis

    We are proposing the amendments to Regulation S-T and Form ID under 
the authority in Section 19(a) of the Securities Act, Sections 3(b), 
13(a), 23(a) and 35A of the Exchange Act, Section 20 of the Public 
Utility Act, Section 319 of the Trust Indenture Act and Sections 30 and 
38 of the Investment Company Act.

Text of Proposed Rule Amendments

List of Subjects in 17 CFR Parts 232, 239, 249, 259, 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 232--REGULATION S-T--GENERAL RULES AND REGULATIONS FOR 
ELECTRONIC FILINGS

    1. 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.
* * * * *
    2. Amend Sec.  232.10 by revising paragraph (b) to read as follows:


Sec.  232.10  Application of part 232.

* * * * *
    (b) Each registrant, third party filer, or agent to whom the 
Commission previously has not assigned a Central Index Key (CIK) code, 
must, before filing on EDGAR:
    (1) File electronically a Form ID (Sec. Sec.  239.63, 249.446, 
259.602, 269.7 and 274.402 of this chapter), the uniform application 
for access codes to file on EDGAR, and
    (2) File in paper by fax, within two business days before or after 
electronically filing the Form ID, a notarized document, manually 
signed by the applicant over the applicant's typed signature, that 
includes the information contained in the Form ID and confirms the 
authenticity of the Form ID.
* * * * *
    3. Amend Sec.  232.101 by adding paragraph (a)(1)(ix) to read as 
follows:


Sec.  232.101  Mandated electronic submissions and exceptions.

    (a) * * *
    (1) * * *
    (ix) Form ID (Sec. Sec.  239.63, 249.446, 259.602, 269.7 and 
274.402 of this chapter), except that the authenticating document 
required by Rule 10(b) of Regulation S-T (Sec.  232.10(b)) shall not be 
filed in electronic format, and related correspondence and supplemental 
information submitted after filing Form ID and before the Commission 
assigns access codes to file on EDGAR, shall not be submitted in 
electronic format.
* * * * *
    4. Amend Sec.  232.104 by revising paragraph (a) to read as 
follows:


Sec.  232.104  Unofficial PDF copies included in an electronic 
submission.

    (a) An electronic submission, other than a Form 3 (Sec.  249.103 of 
this chapter), a Form 4 (Sec.  249.104 of this chapter), a Form 5 
(Sec.  249.105 of this chapter) or a Form ID (Sec. Sec.  239.63, 
249.446, 259.602, 269.7 and 274.402 of this chapter), may include one 
unofficial PDF copy of each electronic document contained within that 
submission, tagged in the format required by the EDGAR filer manual.
* * * * *
    5. Amend Sec.  232.201 by revising paragraph (a) introductory text 
to read as follows:


Sec.  232.201  Temporary hardship exemption.

    (a) If an electronic filer experiences unanticipated technical 
difficulties preventing the timely preparation and submission of an 
electronic filing, other than a Form 3 (Sec.  249.103 of this chapter), 
a Form 4 (Sec.  249.104 of this chapter), a Form 5 (Sec.  249.105 of 
this chapter) or a Form ID (Sec. Sec.  239.63, 249.446, 259.602, 269.7 
and 274.402 of this chapter), the electronic filer may file the subject 
filing, under cover of Form TH (Sec. Sec.  239.65, 249.447, 259.604, 
269.10 and 274.404 of this chapter), in paper format no later than one 
business day after the date on which the filing was to be made.
* * * * *
    6. Amend Sec.  232.202 by revising paragraph (a) introductory text 
to read as follows:


Sec.  232.202  Continuing hardship exemption.

    (a) An electronic filer may apply in writing for a continuing 
hardship exemption if all or part of a filing or group of filings, 
other than a Form ID (Sec. Sec.  239.63, 249.446, 259.602, 269.7 and 
274.402 of this chapter), otherwise to be filed in electronic format 
cannot be so filed without undue burden or expense. Such written 
application shall be made at least ten business days prior to the 
required due date of the filing(s) or the proposed filing date, as 
appropriate, or within such shorter period as may be permitted. The 
written application shall contain the information set forth in 
paragraph (b) of this section.
* * * * *

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

    7. 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-26, 80a-29, 80a-30 and 
80a-37, unless otherwise noted.
* * * * *

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

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

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

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

    9. 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.

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

    10. 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.

[[Page 13432]]

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

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

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

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

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

    11. 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.
* * * * *
    12. Revise Sec. Sec.  239.63, 249.446, 259.602, 269.7, and 274.402 
to read as follows:


Sec.  239.63  Form ID, uniform application for access codes to file on 
EDGAR.


Sec.  249.446  Form ID, uniform application for access codes to file on 
EDGAR.


Sec.  259.602  Form ID, uniform application for access codes to file on 
EDGAR.


Sec.  269.7  Form ID, uniform application for access codes to file on 
EDGAR.


Sec.  274.402  Form ID, uniform application for access codes to file on 
EDGAR.

    Form ID must be filed by registrants, third party filers, or their 
agents, to whom the Commission previously has not assigned a Central 
Index Key (CIK) code, to request the following access codes to permit 
filing on EDGAR:
    (a) Central Index Key (CIK)--uniquely identifies each filer, filing 
agent, and training agent.
    (b) CIK Confirmation Code (CCC)--used in the header of a filing in 
conjunction with the CIK of the filer to ensure that the filing has 
been authorized by the filer.
    (c) Password (PW)--allows a filer, filing agent or training agent 
to log on to the EDGAR system, submit filings, and change its CCC.
    (d) Password Modification Authorization Code (PMAC)--allows a 
filer, filing agent or training agent to change its Password.
    13. Revise Form ID (referenced in Sec.  239.63, Sec.  249.446, 
Sec.  259.602, Sec.  269.7 and Sec.  274.402) to read as follows:

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

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BILLING CODE 8010-01-C

    By the Commission.

    Dated: March 15, 2004.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 04-6187 Filed 3-19-04; 8:45 am]
BILLING CODE 8010-01-P