[Federal Register Volume 69, Number 169 (Wednesday, September 1, 2004)]
[Proposed Rules]
[Pages 53550-53555]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-19785]



[[Page 53549]]

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

Part III





Securities and Exchange Commission





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



17 CFR Parts 210, 240, and 249



Temporary Postponement of the Final Phase-In Period for Acceleration of 
Periodic Report Filing Dates; Proposed Rule

  Federal Register / Vol. 69, No. 169 / Wednesday, September 1, 2004 / 
Proposed Rules  

[[Page 53550]]


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

SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 210, 240 and 249

[Release Nos. 33-8477; 34-50254; File No. S7-32-04]
RIN 3235-AJ30


Temporary Postponement of the Final Phase-in Period for 
Acceleration of Periodic Report Filing Dates

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

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

SUMMARY: We propose to postpone for one year the final phase-in period 
for acceleration of the due dates of quarterly and annual reports 
required to be filed under the Securities Exchange Act of 1934 by 
certain reporting companies known as ``accelerated filers'' that have a 
public float of at least $75 million, that have been subject to the 
Exchange Act's reporting requirements for at least 12 calendar months, 
that previously have filed at least one annual report, and that are not 
eligible to file their quarterly and annual reports on Forms 10-QSB and 
10-KSB.

DATES: Comments should be received on or before October 1, 2004.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/proposed.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number S7-32-04 on the subject line; or
     Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.

Paper Comments

     Send 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 S7-32-04. 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/rules/proposed.shtml). Comments are also available for public inspection and 
copying in the Commission's Public Reference Room, 450 Fifth Street, 
NW., Washington, DC 20549. All comments received will be posted without 
change; 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: Jennifer G. Williams, Attorney-
Advisor, Office of Rulemaking, Division of Corporation Finance, at 
(202) 942-2910, U.S. Securities and Exchange Commission, 450 Fifth 
Street, NW., Washington, DC 20549.

SUPPLEMENTARY INFORMATION: We are proposing amendments to Rules 3-
01,\1\ 3-09 \2\ and 3-12 \3\ of Regulation S-X,\4\ Forms 10-Q \5\ and 
10-K,\6\ as well as Rules 13a-10 \7\ and 15d-10,\8\ under the 
Securities Exchange Act of 1934.\9\
---------------------------------------------------------------------------

    \1\ 17 CFR 210.3-01.
    \2\ 17 CFR 210.3-09.
    \3\ 17 CFR 210.3-12.
    \4\ 17 CFR 210.1-01et seq.
    \5\ 17 CFR 249.308a.
    \6\ 17 CFR 249.310.
    \7\ 17 CFR 240.13a-10.
    \8\ 17 CFR 240.15d-10.
    \9\ 15 U.S.C. 78a et seq.
---------------------------------------------------------------------------

I. Introduction

I. Introduction

    On September 5, 2002, we adopted amendments to certain rules and 
forms to accelerate the filing of quarterly, annual, and transition 
reports under the Securities Exchange Act of 1934 \10\ by reporting 
companies that are ``accelerated filers.'' \11\ Exchange Act Rule 12b-2 
\12\ defines an ``accelerated filer'' to mean an issuer after it first 
meets the following conditions as of the end of its fiscal year:
---------------------------------------------------------------------------

    \10\ Id.
    \11\ Release No. 33-8128 (Sept. 5, 2002) [67 FR 58480]. On April 
8, 2003, we published technical amendments to these final rules in 
Release No. 33-8128A [67 FR 17880].
    \12\ 17 CFR 240.12b-2.
---------------------------------------------------------------------------

     The issuer has a public float of $75 million or more;
     The issuer has been subject to Exchange Act reporting 
requirements for at least 12 calendar months;
     The issuer has filed at least one annual report; and
     The issuer is not eligible to use Forms 10-KSB and 10-QSB 
for its annual and quarterly reports. We also adopted changes to 
related rules governing the timeliness of financial information in 
Commission filings, such as Securities Act registration statements and 
proxy statements and information statements under Section 14 of the 
Exchange Act.
    We originally determined to phase-in the accelerated filing 
deadlines over a three-year period in an effort to balance the market's 
need for information with the time companies need to prepare that 
information without undue burden. In our September 2002 adopting 
release, we stated that a phase-in period would allow a greater 
transition period for companies to adjust their reporting schedules and 
to develop efficiencies to ensure that the quality and accuracy of 
reported information would not be compromised.
    Year one of the phase-in period began for accelerated filers with 
fiscal years ending on or after December 15, 2002. During year one, the 
annual report deadline remained at 90 days after fiscal year end, and 
the quarterly report deadline remained at 45 days after the end of a 
quarter, but accelerated filers became subject to new disclosure 
requirements concerning website access to their Exchange Act 
reports.\13\ In year two, the deadline for annual reports filed for 
fiscal years ending on or after December 15, 2003 was accelerated to 75 
days and the deadline for the three subsequently filed quarterly 
reports was accelerated to 40 days. We currently are in year two of the 
phase-in period.
---------------------------------------------------------------------------

    \13\ See Item 101(e) of Regulation S-K [17 CFR 229.101(e)].
---------------------------------------------------------------------------

    In year three, the annual report deadline was to become further 
accelerated to 60 days with respect to annual reports filed for fiscal 
years ending on or after December 15, 2004, and the deadline for the 
three subsequently filed quarterly reports was to change to 35 days. 
This would have completed the phase-in, with the 60-day and 35-day 
deadlines remaining in place for all subsequent periods.

II. Proposed Postponement of Phase-In Period for Accelerated Filing

    We propose to postpone for one year the completion of the final 
phase-in of the accelerated filing deadlines to allow additional time 
and opportunity for accelerated filers and their auditors to focus 
their efforts on complying with our new requirements regarding internal 
control over financial reporting.\14\ The proposed change would avoid 
subjecting accelerated filers at the same time to a further compression 
of filing deadlines. An accelerated filer must begin to include both a 
management report and auditor report on the effectiveness of its 
internal control over financial reporting in its annual report filed 
for its first fiscal year ending on or

[[Page 53551]]

after November 15, 2004.\15\ The rules as currently drafted will result 
in most accelerated filers having to comply for the first time with the 
internal control reporting requirements within the same timeframe that 
their annual report deadlines are scheduled to change from 75 to 60 
days for fiscal years ending on or after December 15, 2004.
---------------------------------------------------------------------------

    \14\ See Release No. 33-8238 (June 5, 2003) [68 FR 36636]. See 
also Release No. 33-8392 (Feb. 24, 2004) [69 FR 9722] in which we 
subsequently extended the compliance dates for inclusion of 
management reports in an accelerated filer's annual report from June 
15, 2004 to November 15, 2004. The compliance date for non-
accelerated filers also was extended from April 15, 2005 to July 15, 
2005.
    \15\ Item 308 of Regulations S-B and S-K [17 CFR 228.308 and 
229.308].
---------------------------------------------------------------------------

    We believe very strongly that it is critical that all Exchange Act 
reporting companies implement the internal control requirements 
mandated by Section 404 of the Sarbanes-Oxley Act of 2002 completely 
and carefully; these requirements are central to the Act's objectives 
of improving the accuracy and reliability of financial reporting. We 
and members of the staff therefore view the successful implementation 
of the internal control requirements as a Commission priority and have 
exhorted companies to conduct high-quality, thorough assessments of 
their internal control over financial reporting.\16\ The PCAOB has 
similarly adopted its Audit Standard No. 2 to provide for an audit of 
internal control and management's assessment.\17\ We believe that it is 
also critical that financial management, external auditors and audit 
committees are appropriately and carefully consulted regarding the 
audit.
---------------------------------------------------------------------------

    \16\ See e.g., William H. Donaldson, Testimony Concerning 
Implementation of the Sarbanes-Oxley Act of 2002 (September 9, 
2003); Scott A. Taub, The SEC's Internal Control Report Rules and 
Thoughts on the Sarbanes-Oxley Act (May 29, 2003).
    \17\ See Release No. 34-49884; File No. PCAOB 2004-03 (Jun. 17, 
2004) [69 FR 35083].
---------------------------------------------------------------------------

    In recent months, several companies and auditors have expressed 
concern over their ability to perform the work necessary to comply with 
the new internal control requirements at the same time that the 
periodic report deadlines are being further accelerated.\18\ We think 
that the proposed postponement for one year would address concerns that 
the final step in acceleration of the periodic report deadlines may 
impede some accelerated filers' initial efforts to implement the 
internal control requirements with the care and attention we believe is 
desirable.
---------------------------------------------------------------------------

    \18\ See, e.g., Letter from James H. Quigley, Chief Executive 
Officer of Deloitte & Touche USA to Donald Nicolaisen, Chief 
Accountant for the Commission (Jul. 28, 2004); Letter from Deloitte 
& Touche LLP, Ernst & Young LLP, KPMG LLP, and 
PricewaterhouseCoopers LLP to Donald T. Nicolaisen, Chief Accountant 
for the Commission (Aug. 3, 2004). These letters are included in 
Comment Letter File No. S7-32-04.
---------------------------------------------------------------------------

    Moreover, we believe that a temporary postponement of the filing 
deadlines would benefit investors by affording accelerated filers 
additional time to resolve difficult analytical issues that may arise 
in determining whether a problem discovered in the course of 
management's internal control assessment constitutes a significant 
deficiency or material weakness.\19\ Similarly, the proposed 
postponement should provide greater opportunity for an accelerated 
filer's management, financial reporting staff and audit committee 
members to coordinate with the filer's independent auditor regarding 
its internal control audit.\20\
---------------------------------------------------------------------------

    \19\ See Letter from Deloitte & Touche LLP, Ernst & Young LLP, 
KPMG LLP, and PricewaterhouseCoopers LLP to Donald T. Nicolaisen, 
Chief Accountant for the Commission, supra note 18 (``The premise 
underlying our view that a delay is necessary and appropriate for 
one year only relates to the potential unintended consequences that 
two regulatory requirements could have on the quality of financial 
reporting: the timeline for filing the Form 10-K is accelerating 
while many registrants and auditors are finding that the processes 
surrounding readiness for reporting under Section 404 have been 
underestimated. Completion of that process by many registrants 
likely will be either hurried or postponed, a potential outcome that 
will not serve investors well.'')
    \20\ See Letter from Deloitte & Touche LLP, Ernst & Young LLP, 
KPMG LLP, and PricewaterhouseCoopers LLP to Donald T. Nicolaisen, 
Chief Accountant for the Commission, supra note 18 (``The impact on 
the capital markets and the marketplace implications of disclosure 
of material weaknesses under the Section 404 framework is unknown, 
and additional due care and prudence by registrants in making such 
judgments about the quality of internal control is critical. This 
will involve discussions with senior management, the audit 
committee, legal counsel and auditors on the potentially 
controversial and judgmental issues. We expect that the most 
difficult decisions, where there is legitimate room for judgment, 
will include discussions among a number of constituents to gather 
views. This process will be very time consuming, but will be time 
well spent to get to the right answer.'')
---------------------------------------------------------------------------

    We propose to postpone the accelerated filing phase-in period by 
one year so that the deadline for annual reports filed for fiscal years 
ending on or after December 15, 2004 would remain at 75 days after 
fiscal year end. Similarly, the quarterly report deadline for the three 
subsequently filed quarterly reports would remain at 40 days after 
quarter end. The current year two deadlines therefore would remain in 
place for one additional year. For a company that meets the definition 
of an accelerated filer under Exchange Act Rule 12b-2 \21\ as of the 
end of its fiscal year ending on or after December 15, 2004, the annual 
report deadline would be 75 days after fiscal year end. Under the 
proposed amendments, the phase-in period would resume in year four, 
during which an accelerated filer would have to file its annual report 
within 60 days after its fiscal year ending on or after December 15, 
2005. The company would then have to file its next three quarterly 
reports within 35 days after quarter end. At the end of year four, the 
accelerated filing phase-in period would be complete, with the 60-day 
and 35-day deadlines remaining in place for accelerated filers for all 
subsequent periods.
---------------------------------------------------------------------------

    \21\ See Rule 12b-2(1) of the Exchange Act [17 CFR 240.12b-
2(1)].
---------------------------------------------------------------------------

    We also propose to make conforming amendments to Regulation S-X to 
apply the postponed phase-in period to the financial information 
updating requirements in other Commission filings, such as Securities 
Act and Exchange Act registration statements and proxy statements and 
information statements under Section 14 of the Exchange Act, as these 
updating requirements also are tied to periodic report due dates under 
the Exchange Act.\22\ Updated interim financial information would 
continue to be required within 130 days after the end of the 
registrant's fiscal year for fiscal years ending on or after December 
15, 2004 and before December 15, 2005. The proposal would postpone the 
final phase-in period to year four during which updated interim 
financial information would be required within 125 days after the end 
of the registrant's fiscal year for fiscal years ending on or after 
December 15, 2005.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78n.
---------------------------------------------------------------------------

    We are not suggesting in any way that the proposed one year 
postponement should cause companies and auditors to slow their efforts 
to comply with the new internal control requirements or to relax their 
implementation efforts. Rather, we expect that accelerated filers 
already are committing substantial resources to comply with our 
internal control requirements. We believe that concerns have been 
raised by a sufficient number of companies and auditors to warrant the 
proposed one-year postponement. However, we remain committed to the 
concept of filing on a more timely basis by accelerated filers and 
therefore to the completion of the final phase-in period after the 
proposed one year postponement.

Request for Comment

     Is it appropriate to postpone the final phase-in period of 
the accelerated filing deadlines? If so, is the length of the proposed 
postponement appropriate, or should it be shorter or longer?
     Would a postponed phase-in period benefit investors by 
helping to ensure the quality and accuracy of the information included 
by companies in their periodic reports? Would it

[[Page 53552]]

disadvantage investors in any significant respect?
     Should we postpone the final phase-in of the accelerated 
filing deadlines for both annual and quarterly reports or only for 
annual reports given that management's internal control report must 
appear only in the annual report? Does the required disclosure about 
material changes to a company's internal control over financial 
reporting that must appear in the quarterly report warrant a 
postponement of the accelerated filing deadlines for quarterly reports?
     Should we provide for an extension of the filing deadlines 
only for accelerated filers that request an extension, for example, by 
providing for an extension upon the filing of a Form 12b-25 under the 
Exchange Act? Should we only provide an extension of the filing 
deadlines only to certain companies such as those that demonstrate a 
need for the extension? If so, what would be the best method for 
companies to communicate their request for an extension?

III. General Request for Comment

    We request and encourage any interested person to submit comments 
on the proposal and any other matters that might have an impact on the 
proposal. We request comment from the point of view of companies, 
auditors and investors, as well as other users of Exchange Act 
information. With respect to any comments, we note that such 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 postponement affects existing ``collection of 
information'' requirements within the meaning of the Paperwork 
Reduction Act of 1995 (``PRA'').\23\ The titles for the affected 
collections of information are ``Form 10-K'' and ``Form 10-Q.'' Form 
10-K (OMB Control No. 3235-0063) prescribes information that a 
registrant must disclose annually to the market about its business. 
Form 10-Q (OMB Control No. 3235-0070) prescribes information that a 
registrant must disclose quarterly to the market about its business. 
Both forms were adopted pursuant to Sections 13 and 15(d) of the 
Exchange Act. An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a currently valid OMB control number.
---------------------------------------------------------------------------

    \23\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

    The proposal, if adopted, would postpone the final phase-in of 
compliance dates to accelerate the deadlines of quarterly reports on 
Form 10-Q and annual reports on Form 10-K filed by companies that are 
``accelerated filers,'' as defined in Exchange Act Rule 12b-2.\24\ We 
believe that the proposed one year postponement in further acceleration 
of the Form 10-K and 10-Q filing deadlines would allow companies and 
their auditors to focus their time and resources on preparing high-
quality, thorough evaluations of the effectiveness of internal control 
over financial reporting. Accelerated filers will be required for the 
first time to include a management report based on these internal 
control evaluations in their Form 10-K reports filed for fiscal years 
ending on or after November 15, 2004.\25\ This compliance date nearly 
coincides with the currently scheduled date for further acceleration of 
the Form 10-K filing deadline.\26\ Accelerated filers also would have 
to file their quarterly reports under further compressed deadlines.\27\
---------------------------------------------------------------------------

    \24\ 17 CFR 240.12b-2.
    \25\ 17 CFR 228.308 and 229.308.
    \26\ The Form 10-K deadline is scheduled to change from 75 to 60 
days for fiscal years ending on or after December 15, 2004.
    \27\ The Form 10-Q deadline is scheduled to move from 40 to 35 
days after the end of a quarter.
---------------------------------------------------------------------------

    Our proposal to postpone the final compliance dates would not 
change the information required to be included in accelerated filers' 
annual and quarterly reports; it only affects the forms' due dates. 
Companies would have a longer period to adjust their systems to prepare 
for a further acceleration of the reporting deadlines, which may 
slightly ease the overall burden for some companies. We do not believe 
that the Form 10-K and 10-Q information collection burdens would not be 
affected by this proposal in any quantifiable manner.

V. Cost-Benefit Analysis

    The proposal, if adopted, would postpone the phase-in period for 
acceleration of the filing deadlines of quarterly and annual reports 
filed by ``accelerated filers,'' as defined in Exchange Act Rule 12b-2. 
Specifically, the annual report deadline would remain at 75 days and 
the quarterly report deadline would remain at 40 days for annual 
reports filed for fiscal years ending on or after December 15, 2004, 
and the three subsequently filed quarterly reports. Under the proposal, 
the accelerated filing phase-in period would resume for reports filed 
for fiscal years ending on or after December 15, 2005, during which an 
accelerated filer would have to file its annual report within 60 days 
after year end and file its next three quarterly reports within 35 
days. These filing deadlines would then remain in place for all annual 
and quarterly reports filed thereafter. In this section, we examine the 
benefits and costs of our proposal. We request that commenters provide 
views along with supporting data as to the benefits and costs 
associated with the proposal.

A. Benefits

    The proposal would afford an accelerated filer's management 
additional time after the end of the fiscal period ending on or after 
December 15, 2004 to carefully analyze management's evaluation of the 
effectiveness of the company's internal control over financial 
reporting and to prepare a report assessing such effectiveness. The 
proposal also would allow the accelerated filer's independent auditor 
additional time to prepare its report on the effectiveness of the 
filer's internal control over financial reporting in sufficient time 
for inclusion in the company's annual report. We expect that investors 
also would benefit if we allow accelerated filers and their auditors 
additional time to prepare meaningful disclosure about their internal 
control reviews.
    In addition, the proposal may reduce the costs incurred by 
accelerated filers to comply with the new internal control 
requirements. As an accelerated filer must include both a management 
report and auditor report on the effectiveness of its internal control 
over financial reporting for the first time in its annual report for 
the fiscal year ending on or after November 15, 2004, it likely will 
face the highest compliance burden in that year. The proposed 
postponement of the accelerated filing phase-in period may help to 
ameliorate some of the burden associated with implementing the internal 
control requirements by allowing companies 15 additional days to file 
their annual reports. These benefits are difficult to quantify.

B. Costs

    If we adopt the proposed one-year postponement of the phase-in 
period for accelerated deadlines, investors will not have access to the 
information included in accelerated filers' quarterly and annual 
reports as quickly as they would have if we adhered to the original 
phase-in schedule. However, the potential delay of information would be 
temporary and limited to 15 days with

[[Page 53553]]

respect to annual reports and five days with respect to quarterly 
reports.

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

    For purposes of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (``SBREFA''),\28\ a rule is considered ``major'' where, if 
adopted, it results or is likely to result in:
---------------------------------------------------------------------------

    \28\ 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 comment on the potential impact of the proposal on the 
economy on an annual basis. Commenters are requested to provide 
empirical data and other factual support for their views if possible.
    Section 23(a)(2) of the Exchange Act \29\ 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 
\30\ and Section 3(f) of the Exchange Act \31\ 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.
---------------------------------------------------------------------------

    \29\ 15 U.S.C. 78w(a)(2).
    \30\ 15 U.S.C. 77b(b).
    \31\ 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    The proposal would minimize the cost and disruption of implementing 
the accelerated final phase-in period at the same time companies and 
their external auditors must comply with our new internal control over 
financial reporting requirements. The proposed postponement would 
provide additional time for affected companies and their auditors to 
conduct high-quality and thorough assessments and audits of the 
effectiveness of the companies' internal control over financial 
reporting. This, in turn, would increase the reliability and integrity 
of the company's financial reporting to investors. Enhanced investor 
confidence leads to increased efficiency and competitiveness of the 
U.S. capital markets. Increased market efficiency and investor 
confidence also may encourage more efficient capital formation.
    The proposal could have certain negative effects. The proposed 
postponement of compliance dates would delay the timeliness and 
accessibility of Exchange Act reports to investors and the financial 
markets. The delay of information to investors may hinder an investor's 
ability to make informed decisions, and as a result, may impede market 
efficiency and delay capital formation. However, the delay would be 
limited to 15 days with respect to annual reports and five days with 
respect to quarterly reports; these negative effects would be temporary 
and would be eliminated once the final phase-in period is completed 
next year. Furthermore, we believe that the proposal would not have any 
additional competitive effect between accelerated and non-accelerated 
filers other than the incremental costs imposed by accelerated 
deadlines.
    We request comment on whether the proposal, if adopted, would 
promote efficiency, competition, and capital formation or have an 
impact or burden on competition. Commenters are requested to provide 
empirical data and other factual support for their views if possible.

VII. Regulatory Flexibility Analysis Certification

    The Commission hereby certifies pursuant to 5 U.S.C. 605(b) that 
the proposal contained in this release, if adopted, would not have a 
significant economic impact on a substantial number of small entities. 
The proposal would postpone the compliance deadlines for certain 
amendments to our rules and forms that accelerate the filing of 
quarterly and annual reports required under the Exchange Act by 
reporting companies that meet the definition of an ``accelerated 
filer'' as defined in Exchange Act Rule 12b-2. Exchange Act Rule 0-
10(a) \32\ defines an issuer, 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. 
Because the impact would be to simply delay for one year the obligation 
of a small percentage of small businesses to comply with further 
accelerated filing deadlines for their periodic reports, we do not 
believe that the proposal, if adopted, would have a significant 
economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \32\ 17 CFR 240.0-10(a).
---------------------------------------------------------------------------

    We solicit written comments regarding this certification. We 
specifically request comment on whether the proposal could have an 
effect that we have not considered. We request that commenters describe 
the nature of any impact on small entities and provide empirical data 
to support the extent of the impact.

VIII. Statutory Authority and Text of Rule Amendments

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

Text of Rule Amendments

List of Subjects in 17 CFR Parts 210, 240 and 249

    Reporting and recordkeeping requirements, Securities.

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

PART 210--FORM AND CONTENT OF AND REQUIREMENTS FOR FINANCIAL 
STATEMENTS, SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 
1934, PUBLIC UTILITY HOLDING COMPANY ACT OF 1935, INVESTMENT 
COMPANY ACT OF 1940, INVESTMENT ADVISERS ACT OF 1940, AND ENERGY 
POLICY AND CONSERVATION ACT OF 1975

    1. The authority citation for Part 210 continues to read as 
follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 
77aa(25), 77aa(26), 78c, 78j-1, 78l, 78m, 78n, 78o(d), 78q, 78u-5, 
78w(a), 78ll, 78mm, 79e(b), 79j(a), 79n, 79t(a), 80a-8, 80a-20, 80a-
29, 80a-30, 80a-31, 80a-37(a), 80b-3, 80b-11, 7207 and 7262, unless 
otherwise noted.

    2. Section 210.3-01 is amended by revising paragraphs (e)(1)(ii) 
and (iii), (i)(1)(i)(B) and (C), (i)(2)(i)(B) and (C) and (i)(2)(ii) to 
read as follows:


Sec.  210.3-01  Consolidated balance sheets.

* * * * *
    (e) * * *
    (1) * * *
    (ii) 130 days for fiscal years ending on or after December 15, 2003 
and before December 15, 2005; and
    (iii) 125 days for fiscal years ending on or after December 15, 
2005; and
* * * * *
    (i)(1) * * *
    (i) * * *

[[Page 53554]]

    (B) 75 days for fiscal years ending on or after December 15, 2003 
and before December 15, 2005; and
    (C) 60 days for fiscal years ending on or after December 15, 2005; 
and
    (2) * * *
    (i) * * *
    (B) 129 days subsequent to the end of the registrant's most recent 
fiscal year for fiscal years ending on or after December 15, 2003 and 
before December 15, 2005; and
    (C) 124 days subsequent to the end of the registrant's most recent 
fiscal year for fiscal years ending on or after December 15, 2005; and
* * * * *
    3. Section 210.3-09 is amended by revising paragraph (b)(3)(i)(B) 
and (C) and (b)(4)(i)(B) and (C) to read as follows:


Sec.  210.3-09  Separate financial statements of subsidiaries not 
consolidated and 50 percent or less owned persons.

* * * * *
    (b) * * *
    (3) * * *
    (i) * * *
    (B) 75 days for fiscal years ending on or after December 15, 2003 
and before December 15, 2005; and
    (C) 60 days for fiscal years ending on or after December 15, 2005; 
and
    (4) * * *
    (i) * * *
    (B) 75 days for fiscal years ending on or after December 15, 2003 
and before December 15, 2005; and
    (C) 60 days for fiscal years ending on or after December 15, 2005; 
and
* * * * *
    4. Section 210.3-12 is amended by revising paragraph (g)(1)(i)(B) 
and (C) and (g)(2)(i)(B) and (C) to read as follows:


Sec.  210.3-12  Age of financial statements at effective date of 
registration statement or at mailing date of proxy statement.

* * * * *
    (g)(1) * * *
    (i) * * *
    (B) 130 days for fiscal years ending on or after December 15, 2003 
and before December 15, 2005; and
    (C) 125 days for fiscal years ending on or after December 15, 2005; 
and
    (2) * * *
    (i) * * *
    (B) 75 days for fiscal years ending on or after December 15, 2003 
and before December 15, 2005; and
    (C) 60 days for fiscal years ending on or after December 15, 2005; 
and
* * * * *

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

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

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 
78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 
78w, 78x, 78ll, 78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-
3, 80b-4 and 80b-11 and 7201 et. seq.; and 18 U.S.C. 1350, unless 
otherwise noted.
* * * * *
    6. Section 240.13a-10 is amended by revising paragraph (j)(1)(i)(B) 
and (C) and (j)(2)(i)(B) and (C) to read as follows:


Sec.  240.13a-10  Transition reports.

* * * * *
    (j)(1) * * *
    (i) * * *
    (B) 75 days for fiscal years ending on or after December 15, 2003 
and before December 15, 2005;
    (C) 60 days for fiscal years ending on or after December 15, 2005; 
and
    (2) * * *
    (i) * * *
    (B) 40 days for fiscal years ending on or after December 15, 2004 
and before December 15, 2006; and
    (C) 35 days for fiscal years ending on or after December 15, 2006; 
and
* * * * *
    7. Section 240.15d-10 is amended by revising paragraph (j)(1)(i)(B) 
and (C) and (j)(2)(i)(B) and (C) to read as follows:


Sec.  240.15d-10  Transition reports.

* * * * *
    (j)(1) * * *
    (i) * * *
    (B) 75 days for fiscal years ending on or after December 15, 2003 
and before December 15, 2005;
    (C) 60 days for fiscal years ending on or after December 15, 2005; 
and
    (2) * * *
    (i) * * *
    (B) 40 days for fiscal years ending on or after December 15, 2004 
and before December 15, 2006; and
    (C) 35 days for fiscal years ending on or after December 15, 2006; 
and
* * * * *

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. and 7201 et seq.; and 18 
U.S.C. 1350, unless otherwise noted.
* * * * *
    9. Section 249.308a is amended by revising paragraph (a)(1)(ii) and 
(iii) to read as follows:


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

    (a) * * *
    (1) * * *
    (ii) 40 days after the end of the fiscal quarter for fiscal years 
ending on or after December 15, 2004 and before December 15, 2006; and
    (iii) 35 days after the end of the fiscal quarter for fiscal years 
ending on or after December 15, 2006; and
* * * * *
    10. Form 10-Q (referenced in Sec.  249.308a) is amended by revising 
paragraph a.(ii) and (iii) of General Instruction A.1. to read as 
follows:

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

Form 10-Q

General Instructions

A. Rule as to Use of Form 10-Q

    1. * * *
    a. * * *
    (ii) 40 days after the end of the fiscal quarter for fiscal years 
ending on or after December 15, 2004 and before December 15, 2006; and
    (iii) 35 days after the end of the fiscal quarter for fiscal years 
ending on or after December 15, 2006; and
* * * * *
    11. Section 249.310 is amended by revising paragraph (b)(1)(ii) and 
(iii) to read as follows:


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

* * * * *
    (b) * * *
    (1) * * *
    (ii) 75 days after the end of the fiscal year covered by the report 
for fiscal years ending on or after December 15, 2003 and before 
December 15, 2005;
    (iii) 60 days after the end of the fiscal year covered by the 
report for fiscal years ending on or after December 15, 2005; and
* * * * *
    12. Form 10-K (referenced in Sec.  249.310) is amended by revising 
paragraph (2)(a)(ii) and (iii) of General Instruction A, to read as 
follows:

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

Form 10-K

* * * * *

[[Page 53555]]

General Instructions

A. Rule as To Use of Form 10-K
    (2) * * *
    (a) * * *
    (ii) 75 days after the end of the fiscal year covered by the report 
for fiscal years ending on or after December 15, 2003 and before 
December 15, 2005; and
    (iii) 60 days after the end of the fiscal year covered by the 
report for fiscal years ending on or after December 15, 2005; and
* * * * *

    Dated: August 25, 2004.
    By the Commission.

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 04-19785 Filed 8-31-04; 8:45 am]
BILLING CODE 8010-01-P